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  • Article: Five Mistakes One Should Never Make On An Initial "New" Company L-1A Petition By Rabindra K. Singh, Esq.

    Five Mistakes One Should Never Make On An Initial "New" Company L-1A Petition

    by


    New Company L-1A Petition could provide a viable and valuable alternative to Foreign Companies, actively engaged in doing business abroad, to set up operations in the United States and transfer key Managerial and/or Executive level employees to manage and run the newly established Entity. In order to pass the credibility threshold of the adjudicating officer at the United States Citizenship and immigration Services (USCIS), and to ensure a favorable adjudication, the New Company L-1A Petition should be meticulously prepared and vetted before submission. This Article endeavors to summarize top five (5) mistakes one should never make when preparing and submitting a New Company L-1A Petition.

    1. Choice of Business Venture

    The choice of business venture for the newly formed business Entity in the United States should be judiciously made. Although there is no regulatory restriction on the type of business to be pursued by the Foreign Company, not all business ventures tend to be favorable for the New Company L-1A Petition purpose. Unless supported by a strong market analysis and the other supporting documentation explaining the need and purpose to venture into a new business in the United States, it is always a safe choice for the new U.S. Entity to engage or expand into what the Foreign Company is doing abroad provided the business would require hiring of other Managerial, Supervisory or Professional level employees.

    Further, when deciding the business venture, both the short-term goal of obtaining an approval on the initial L-1A Petition[1], and the long-term vision of successfully securing Lawful Permanent Resident (LPR) status[2] for the Foreign National[3] should be taken into consideration. In order to achieve both goals, it is a must that the business, to be pursued by the U.S. Entity, should project hiring of staff to support the sponsored Managerial and/or Executive level position. Specifically, the new business should project hiring of other Managerial, Supervisory or Professional level employee during the first year of its operation. As such, when conceptualizing the business idea, rather than focusing on the number of employees, emphasis should be given to the “type” of employees to be hired by the new Company in the United States.

    2. Business Plan

    Business Plan forms the backbone, or one could say the Central Nervous System, of the New Company L-1A Petition. As such, defects and/or inconsistencies in the Business Plan could irreparably harm the L-1A Petition adjudication. To avert that, one should consider hiring a seasoned Business Plan preparer who is aware of the specific L-1A Petition requirements. Since immigration law is so dynamic, the Business Plan prepared by a professional should be reviewed item-by-item and line-by-line by the Attorney preparing the L-1A Petition. Blindly submitting the Business Plan prepared by the Business Plan preparer could hurt more than help the L-1A Petition as the details contained in the Business Plan should be supported by rest of documents and information contained in the Petition.

    More than anything, the Business Plan should appear realistic. Also, make sure it is detailed, logical and consistent. Further, the projections, whether it relates to company’s initial investment, hiring or revenue should appear real and achievable based on industry standards, and company’s size, type and services/products offered. Last but not the least, the Business Plan should contain strong market analysis supporting “why” the Foreign Company decided to venture into a specific business; compare and analyze competitor’s landscape; and provide a time-line of the proposed activities to be undertaken by the new company during the first year of its operation.

    3. Organizational Chart

    Besides Business Plan, much thought and acumen should be utilized when preparing an Organizational Chart for a New Company L-1A Petitions. Like Business Plan, first and foremost the Organizational Chart should appear real and credible. Some of the common mistakes on Organizational Chart include, but are not limited to, projecting too many managers and supervisors in a small organization, or projecting managers and/or supervisors without any direct reports to manage or supervise.

    Sometimes, Employers and Practitioners make the mistake of putting all of the supporting personnel under the direct supervision of Beneficiary without creating any hierarchy. Unless all of the personnel under Beneficiary’s direct supervision are Professionals[4], projecting two-tier Organizational Chart could be disastrous for the L-1A Petition. Further, the Organizational Chart should include all prospective hiring of employees, as indicated on the Business Plan, during the first three (3) years of company’s operation. In doing so, the preparer should include the future hiring month and year for each position. To add, it is always a better idea to support the Organization Chart by including a separate chart stating the summary of proposed job duties for each position title, and including education and experience required for each position.

    4. Leased Office Space

    Though it may appear logical that any new business setting up its operations in the United States would obtain at least an office space, in practice, new companies, especially small and medium-sized companies, setting their foot in the United States, do not want to make a financial commitment by leasing an office space and paying monthly rents. Note that it is an absolute must that New Company L-1A Petitions should be supported by documentation showing that the newly formed business Entity in the United States has secured “adequate” office space. What is adequate depends on the type and nature of business. If the business needs to have a storage or manufacturing space, show that through additional lease agreements.

    Further, the leased office space should be proportionate to the hiring projections contained in the Business Plan. At least, the leased office space should be enough to accommodate all personnel to be hired during the first year of Company’s operation. If the leased office space may fall short to accommodate all first year hiring, sincere effort should be made to document and explain on the Petition that the Company has already sought permission from the leasing company regarding extra space allotment in the future.

    5. Ability to Invest in the New Company & Ability to Pay the Beneficiary

    The success of L-1A Petition adjudication demands that the Foreign Company should show and prove its ability to invest in the United States Entity and to pay salary to the Foreign National Beneficiary. Because the new company will be setting up its foot in the United States, it is logical to assume that it will primarily rely on the funds of the Parent company to support its formation and existence, at least during the first year of its operation. As such, the investment to be made by the Foreign Company in setting up the U.S. Entity, and the staffing and operational costs to run the United States office should be projected keeping in mind the financial health of the Foreign Company. Exaggerating initial investments, and staffing and operational cost and not supporting those with the availability of funds in the Foreign Company’s bank account(s) or through future revenue generation could be lethal for L-1A Petition adjudication.

    Conclusion

    To conclude, the success of a New Company L-1A Petition depends on a number of factors. Besides complying with the regulatory requirements, first and foremost, the choice of Business venture and its Business Plan should appear realistic. Additionally, for the Petition to pas USCIS Adjudicator’s credibility test, the projections on the Petition and Business Plan, be it pertains to financial, prospective hiring, investment, etc. should appear reasonable and achievable. Most importantly, whether or not the new business will hire other Managerial, Supervisory or Professional level employee to support the sponsored Managerial or Executive position within first year of its operation should be considerably thought-out.

    The specifics are important too. So, much care should be exercised in making and projecting the Organizational Chart, and in providing a time-line of the activities to be carried out by the New Company during its first year of operation. Further, the New Company should not only lease an office space but it should lease enough office space to accommodate all personnel as per the hiring projections. Last but not the least; before embarking on the L-1A Petition path, Foreign Company’s financial health checkup is required to ensure that it can make the projected investment in the United States, and also pay salary to the Foreign National Beneficiary, at least during Company’s first year of operation in the United States.



    [1] and subsequently Extension Petition after one year of initial Petition approval.

    [2] Or an Immigrant Visa at the U.S. Consular Post abroad.

    [3] utilizing the EB-1(C) Preference Classification for Multinational National Executives and Managers.

    [4] Holds at least a Bachelor’s degree and are members of the profession.


    About The Author

    Rabindra K. Singh (Rabi) is an Attorney with Immigration Attorneys, LLP, in Chicago, Illinois. From individuals to startups to multinational corporations, he has advised clients in a variety of industries, with a primary focus on the information technology, pharmaceutical, and financial services industries. Rabi's work focuses on complex employment- and family-based immigration matters. He frequently assists clients in obtaining investor-based visas, and is an expert in preparing various types of waiver applications. Additionally, he has gained an in-depth expertise in the worksite enforcement area by successfully representing clients of all sizes. Further, he is adept in submitting Motion to Reopen and/or Reconsider to USCIS for reviewing adverse decisions; and filing Appeals to the Administrative Appeals Office (AAO) and Board of Immigration Appeals (BIA). An avid writer, he writes for both print and electronic media. In 2016, Rabi was selected as a "Rising Star" by Super Lawyers. He also received the AVVO's "Client Choice Award" for the year 2014 and 2015 because of his excellent client service. Rabi can be contacted at: rsingh@immattyllp.com


    The opinions expressed in this article do not necessarily reflect the opinion of ILW.COM.

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