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Thread: Article: Fundamentals for Establishing “New Offices” in the Intracompany Transferee Context by Joseph Whalen

  1. #1

    Article: Fundamentals for Establishing “New Offices” in the Intracompany Transferee C

    Fundamentals for Establishing “New Offices” in the Intracompany Transferee Context


    Joseph Whalen


    The “L” non-immigrant classification is for intracompany transferees who are either employed in a managerial or executive capacity (L1-A) or who
    possess certain specialized knowledge of the employer’s products, processes, or procedures (L1-B); and such knowledge can normally be considered
    as proprietary information and thus confined to employees of that company.


    This bifurcated non-immigrant worker category is statutorily defined at INA §101(a)(15)(L); 8 USC
    §1101(a)(15)(L) as follows:

    §1101 [INA 101]. Definitions

    (a) As used in this chapter—

    * * * * *

    (15) The term “immigrant” means every alien except an alien who is within one of the following classes of nonimmigrant aliens—

    * * * * *

    (L) subject to section 1184(c)(2) of this title [INA section 214(c)(2)], an alien who, within 3 years preceding the time of his application for admission
    into the United States, has been employed continuously for one year by a firm or corporation or other legal entity or an affiliate or subsidiary thereof and who seeks to enter the United States
    temporarily in order to continue to render his services to the same employer or a subsidiary or affiliate thereof in a capacity that is managerial, executive, or involves specialized knowledge, and the alien spouse and minor children
    of any such alien if accompanying him or following to join him;

    Additional definitions come into play when adjudicating requests for classification as an intracompany transferee, a manager, an executive or in possession of specialized knowledge. Let’s explore some of the key legal definitions involved from the statute and


    For purposes of qualifying the petitioner, a business relationship must be established between the foreign employer and
    the U.S. employer (petitioner) and meet the applicable legal definitions. See INA § 101(a)(28) [8 USC § 1101(a)(28)].

    (28) The term “organization” means, but is not limited to, an organization, corporation, company, partnership, association, trust, foundation or fund; and
    includes a group of persons, whether or not incorporated, permanently or temporarily associated together with joint action on any subject or subjects.

    As noted in the L classification definition, the non-immigrant worker must be coming to the U.S. to work for “ the same employer or a subsidiary or affiliate thereof”.

    Turning momentarily to a sister section of the statute which is also in play, we will find more information than desired but also, another key definition.
    However, in addition to that definition of “specialized knowledge” we find three important terms, in subparagraphs (F), that are not
    statutorily defined. They are: affiliate, subsidiary, or parent. These three terms among others will be discussed further below the
    following excerpt from the statute.

    §1184. Admission of nonimmigrants.

    * * * * *

    (c) Petition of importing employer

    * * * * *

    (2)(A) The [Secretary of Homeland Security]shall provide for a procedure under which an importing employer which meets requirements established by the
    [Secretary of Homeland Security]may file a blanket petition to import aliens as nonimmigrants described in section 1101(a)(15)(L) of this title instead of
    filing individual petitions under paragraph (1) to import such aliens. Such procedure shall permit the expedited processing of visas for admission of
    aliens covered under such a petition.

    (B) For purposes of section 1101(a)(15)(L) of this title, an alien is considered to be serving in a capacity involving specialized knowledge with respect to a company if the alien has a special knowledge of the company product and its
    application in international markets or has an advanced level of knowledge of processes and procedures of the company.

    (C) The [Secretary of Homeland Security]shall provide a process for reviewing and acting upon petitions under this subsection with respect to nonimmigrants
    described in section 1101(a)(15)(L) of this title within 30 days after the date a completed petition has been filed.

    (D) The period of authorized admission for—

    (i) a nonimmigrant admitted to render services in a managerial or executive capacity under section 1101(a)(15)(L) of this title shall not exceed 7 years,

    (ii) a nonimmigrant admitted to render services in a capacity that involves specialized knowledge under section 1101(a)(15)(L) of this title shall not
    exceed 5 years.

    (E) In the case of an alien spouse admitted under section 1101(a)(15)(L) of this title, who is accompanying or following to join a principal alien admitted
    under such section, the [Secretary of Homeland Security]shall authorize the alien spouse to engage in employment in the United States and provide the
    spouse with an “employment authorized” endorsement or other appropriate work permit.

    (F) An alien who will serve in a capacity involving specialized knowledge with respect to an employer for purposes of
    section 1101(a)(15)(L) of this title and will be

    stationed primarily at the worksite of an employer other than the petitioning employer or its affiliate, subsidiary, or parent shall not be eligible
    for classification

    under section 1101(a)(15)(L) of this title if—

    (i) the alien will be controlled and supervised principally by such unaffiliated employer; or

    (ii) the placement of the alien at the worksite of the unaffiliated employer is essentially an arrangement to provide labor for hire for the unaffiliated
    employer, rather than a placement in connection with the provision of a product or service for which specialized knowledge specific to the petitioning
    employer is necessary.


    As noted above, for purposes of qualifying the petitioner, a business relationship must be established between the foreign
    employer and the U.S. employer (petitioner). There will be more on that subject later. In that the business relationship may take various forms, we need to
    examine widely accepted definitions of words used in the statute itself for which that statute provides no definition. The commonly used terms “affiliate”, “subsidiary”, and “parent company” among others must also meet the applicable business definitions.

    The implementing regulations pertinent and specific to the L classification include some additional terms and do actually define them.

    (l) Intracompany transferees

    * * * * *

    (1) Admission of intracompany transferees

    (ii) Definitions

    * * * * *

    (G) Qualifying organization means a United States or foreign firm, corporation, or other legal entity which:

    (1) Meets exactly one of the qualifying relationships specified in the definitions of a parent, branch, affiliate or subsidiary specified in
    paragraph (l)(1)(ii) of this section;

    (2) Is or will be doing business (engaging in international trade is not required) as an employer in the United States and in at least one other
    country directly or through a parent, branch, affiliate, or subsidiary for the duration of the alien's stay in the United States as an intracompany
    transferee; and

    (3) Otherwise meets the requirements of section 101(a)(15)(L) of the Act.

    (H) Doing business[2]
    means the regular, systematic, and continuous provision of goods and/or services by a qualifying organization and does not include the mere presence of an agent or office of the qualifying organization in the United States and abroad.

    (I) Parent means a firm, corporation, or other legal entity which has subsidiaries.

    (J) Branch means an operating division or office of the same organization housed in a different location.

    (K) Subsidiary means a firm, corporation, or other legal entity of which a parent owns, directly or indirectly, more than half of the entity and
    controls the entity; or owns, directly or indirectly, half of the entity and controls the entity; or owns, directly or indirectly, 50 percent of a 50-50
    joint venture and has equal control and veto power over the entity; or owns, directly or indirectly, less than half of the entity, but in fact controls the

    (L) Affiliate means

    (1) One of two subsidiaries both of which are owned and controlled by the same parent or individual, or

    (2) One of two legal entities owned and controlled by the same group of individuals, each individual owning and controlling approximately the same
    share or proportion of each entity, or

    (3) In the case of a partnership that is organized in the United States to provide accounting services along with managerial and/or consulting
    services and that markets its accounting services under an internationally recognized name under an agreement with a worldwide coordinating organization
    that is owned and controlled by the member accounting firms, a partnership (or similar organization) that is organized outside the United States to provide
    accounting services shall be considered to be an affiliate of the United States partnership if it markets its accounting services under the same
    internationally recognized name under the agreement with the worldwide coordinating organization of which the United States partnership is also a member.

    To provide some additional clarity on these common varieties of businesses and the terms used to describe them, I looked to the internet and found several
    reliable sources. After considering a few, I settled on Here are some “cut-and-pasted”
    blurbs from the Investopedia website. I especially like them for their explanation sections.

    Definition of 'Branch Office'

    A location, other than the main office, where business is conducted. Most branch offices are comprised of smaller divisions of different aspects of the
    company such as human resources, marketing, accounting, etc. A branch office will typically have a branch manager who will report directly to, and take
    orders from, a management member of the main office.

    Investopedia explains 'Branch Office'

    Branch offices are useful in that it allows the administrative aspect of the business to be conducted in locations around the globe. For example, Starbucks
    has branch offices so as to be able to meet closely with the stores district managers in a more cost effective manner, as well as cater to, and be more
    informed in, the needs of specific locations.

    Above at:

    Definition of 'Affiliate'

    A type of inter-company relationship in which one of the companies owns less than a majority of the other company's stock, or a type of inter-company
    relationship in which at least two different companies are subsidiaries of a larger company.

    Investopedia explains 'Affiliate'

    For example, let's say BIG Corp. owns 40% of MID Corp.'s common stock and 75% of TINY Corp. In this case, MID Corp. and BIG Corp. have an affiliate
    relationship, and TINY Corp. is BIG Corp.'s subsidiary.

    However, note that for the purposes of filing consolidated tax returns, IRS regulations state that a parent company must possess at least 80% of a
    company's voting stock in order to be considered affiliated.

    Above at:

    Definition of 'Affiliated Companies'

    Companies that are less than 50% owned by a parent company; the parents are minority shareholders. More loosely, the term "affiliated companies" is
    sometimes used to refer to companies that are related to each other in some way. For example, Bank of America has numerous affiliated companies, including
    Banc of America, US Trust, Landsafe, Balboa and Merrill Lynch.

    Investopedia explains 'Affiliated Companies'

    By way of contrast, a subsidiary is more than 50% owned by its parent; the parent is a majority shareholder. Affiliates and subsidiaries are common ways
    for banks to enter foreign markets and be allowed to underwrite securities. Affiliates and subsidiaries are also used in foreign markets to give the
    impression that the company is not foreign-owned and thereby avoid any negative consequences that might be associated with consumers' perceptions of
    foreign ownership. For example, consumer goods company Unilever is a Dutch and British company; it calls its Indian subsidiary Hindustan Unilever.

    Above at:

    Definition of 'Subsidiary'

    A company whose voting stock is more than 50% controlled by another company, usually referred to as the parent company or holding company. A subsidiary is
    a company that is partly or completely owned by another company that holds a controlling interest in the subsidiary company. If a parent company owns a
    foreign subsidiary, the company under which the subsidiary is incorporated must follow the laws of the country where the subsidiary operates, and the
    parent company still carries the foreign subsidiary's financials on its books (consolidated financial statements). For the purposes of liability, taxation
    and regulation, subsidiaries are distinct legal entities.

    Investopedia explains 'Subsidiary'

    The purchase of a controlling interest differs from a merger and the parent corporation can acquire the controlling interest with a smaller investment.
    Additionally, stockholder approval is not required in the formation of a subsidiary as it would be in the event of a merger. Famous investor Warren
    Buffett's Berkshire Hathaway, Inc. has a long and diverse list of subsidiaries, including Clayton Homes, the Pampered Chef, GEICO Auto Insurance and
    Helzberg Diamonds.

    Above at:

    Definition of 'Parent Company'

    A company that controls other companies by owning an influential amount of voting stock or control. Parent companies will typically be larger firms that
    exhibit control over one or more small subsidiaries in either the same industry or other industries. Parent companies can be either hands-on or hands-off
    with subsidiaries, depending on the amount of managerial control given to subsidiary managers.

    Investopedia explains 'Parent Company'

    Companies can become parent companies by many different means. The two most common ways are through the acquisitions of smaller companies and the spinoff
    or creation of subsidiaries. For the purposes of accounting, parent companies report results of subsidiaries on audited statements when subsidiaries fall
    under the same corporate identity.

    Above at:

    Definition of 'Holding Company'

    A parent corporation that owns enough voting stock in another corporation to control its board of directors (and, therefore, controls its policies and

    Investopedia explains 'Holding Company'

    A holding company must own at least 80% of voting stock to get tax consolidation benefits, such as tax-free dividends.

    Above at:

    Definition of 'Firm'

    A business organization, such as a corporation, limited liability company or partnership. Firms are typically associated with business organizations that
    practice law, but the term can be used for a wide variety or business operation units.

    Investopedia explains 'Firm'

    While business activities are typically conducted under the firm's name, the legal protection to employees or owners depends on the type of organization it
    was created under. Some organizational types, such as corporations, provide more protection than others.

    Above at:

    Definition of 'Organizational Structure'

    Explicit and implicit institutional rules and policies designed to provide a structure where various work roles and responsibilities are delegated,
    controlled and coordinated. Organizational structure also determines how information flows from level to level within the company. In a centralized
    structure, decisions flow from the top down. In a decentralized structure, the decisions are made at various different levels.

    Investopedia explains 'Organizational Structure'

    A good organizational structure can often spell the difference between a smooth operating organization and one in chaos. By establishing a hierarchical
    structure with a clear chain of command, companies are better able to streamline their operations.

    Above at:


    In the context of the intracompany transferee, where the employer is itself composed of multiple components, including but not limited to
    parents, subsidiaries, and/or affiliates etc… within its overall or umbrella “organization”, the concept of employer is loosely defined but not
    never-ending. There will be situations where the connection is too tenuous and the nexus between the foreign and U.S.
    employers ceases to be possible, plausible, probable, and most of all credible. For example, where services of company
    A will be paid for by company B to apply its proprietary knowledge on behalf of company B, which is actually a “ seller or service-provider-to-customer” relationship. As such company B who is merely the “customer” cannot petition on behalf of any employee of
    company A because no proper and qualifying business relationship exists to justify filing any intracompany transferee I-129 petition. These aspects involve specific-fact-dependent judgments on the merits and will be a “findings-of-fact” by an adjudicator based upon the evidence
    presented and any arguments submitted on brief as well as any and all narrative statement(s) offering explanation(s).


    Characterizing the Position

    For purposes of qualifying the positions (note the use of the plural form), the actual job duties performed for
    the foreign employer as well as the U.S. employer; and the level of performance of those duties by the beneficiary must all meet the
    applicable legal definitions. See INA § 101(a)(44) [8 USC § 1101(a)(44)]. Lastly, a properemployer-employee relationship must have existed abroad for one solid year within the prior three years and an employer-employee relationship must commence for the U.S. employer after entry as an L non-immigrant worker (intracompany transferee).

    In the “new office” context, special consideration is given, via implementing regulations, to a manager or executive whose task is to actually
    establish that new office. The new office context is explored further below. As noted above, “specialized knowledge” is defined for the
    L1-B classification. The key concepts involved in the L1-A classification are also statutorily defined. I feel that it is important to recite those actual
    statutory definitions also in play, here goes.

    (44)(A) The term “managerial capacity” means an assignment within an organization in which the employee primarily—

    (i) manages the organization, or a department, subdivision, function, or component of the organization;

    (ii) supervises and controls the work of other supervisory, professional, or managerial employees, or manages an essential function within the
    organization, or a department or subdivision of the organization;

    (iii) if another employee or other employees are directly supervised, has the authority to hire and fire or recommend those as well as other personnel
    actions (such as promotion and leave authorization) or, if no other employee is directly supervised, functions at a senior level within the organizational
    hierarchy or with respect to the function managed; and

    (iv) exercises discretion over the day-to-day operations of the activity or function for which the employee has authority.

    A first-line supervisor is not considered to be acting in a managerial capacity merely by virtue of the supervisor's supervisory duties unless the
    employees supervised are professional.

    (B) The term “executive capacity” means an assignment within an organization in which the employee primarily—

    (i) directs the management of the organization or a major component or function[3]
    of the organization;

    (ii) establishes the goals and policies of the organization, component, or function;

    (iii) exercises wide latitude in discretionary decision-making; and

    (iv) receives only general supervision or direction from higher level executives, the board of directors, or stockholders of the organization.

    (C) If staffing levels are used as a factor in determining whether an individual is acting in a managerial or executive capacity, [ then] the [Secretary of Homeland Security] shall take into account the reasonable needs of the organization, component, or function in
    light of the overall purpose and stage of development of the organization, component, or function. An individual shall not be considered to be acting in a
    managerial or executive capacity (as previously defined) merely on the basis of the number of employees that the individual supervises or has supervised or
    directs or has directed.

    To reiterate and emphasize the definition of specialized knowledge INA § 214(c)(2)(B) states in pertinent part:

    “….. an alien is considered to be serving in a capacity involving specialized knowledge ….. if the alien has aspecial knowledge of the company product and its application in international markets or has an advanced level of knowledge of processes and procedures of the company.”

    The first use of the word “the” to demarcate the word “company” has a specific meaning in the English language. It is
    indicative of denoting a singular noun with specificity. This specialized or advanced level of knowledge is knowledge confined to that
    single “employer” as indicated by the second use of the article “the” to identify the same “company” as thereby the “same employer” in possession of said
    specialized or advanced knowledge. As previously mentioned, in the vast majority of cases, the specialized or advanced knowledge is, in fact, protected,
    proprietary information that may include: patented processes, secret recipes or formulas, or “trade secrets” that could easily be the object of industrial


    On August 9, 2013, the United States Court for the District of Columbia, rendered a decision consistent with numerous prior decisions in a case captioned

    Fogo De Chao Churrascaria, LLC v. Department of Homeland Security

    Civil Action No. 10-1024 (RBW).[4]
    In that decision, the Court extracted the following summary of AAO’s position and the questions it sought to answer:

    (1) what is the appropriate standard that should be applied to determine “specialized knowledge”;

    (2) whether [petitioner’s] churrasqueiro[5]
    chef position requires specialized knowledge according to that standard; and

    (3) whether [the beneficiary] . . . possesses specialized knowledge, and has been and will be employed in a specialized knowledge capacity.

    . At pp. 5-6.

    This is not the first Brazilian barbecue case![6]


    The following excerpts[7]
    are from a rather recent AAO non-precedent decision[8]
    and as such is itself not binding, however, the statutory language and regulatory language is binding. The AAO’s minor commentary included herein is not
    new but instead is a reiteration of what has come before in various federal court cases and a few Administrative Precedent Decisions. This recent sample
    serves the purpose of providing a source of reference, quotes, and citations.

    The above regulation is applicable to the extension of an L visa following the first year wherein the new office was established. How does one get that
    first year approved in the first place? To answer that question me must examine 8 CFR 214.2(l)(3)(v) and (vi).

    (l) Intracompany transferees

    * * * * *

    (3) Evidence for individual petitions. An individual petition filed on Form I-129 shall be accompanied by:

    * * * * *

    (v) If the petition indicates that the beneficiary is coming to the United States as a manager or executive to open or to be employed in a new office in the United States, the petitioner shall submit evidence that:

    (A) Sufficient physical premises to house the new office have been secured;


    Documentary evidence such as a lease or rental agreement, or a deed to “sufficient” space to house the functions and staff of the “new office” as
    described in other documentary evidence such as the “Business Plan”.

    (B) The beneficiary has been employed for one continuous year in the three year period preceding the filing of the petition in an executive or managerial
    capacity and that the proposed employment involved executive or managerial authority over the new operation; and


    Job Description listing the managerial or executive Duties to be performed; USCIS likes to see a break down that includes the percentage of time
    devoted to the various tasks. In the aggregate, the managerial or executive tasks must be in the majority. Under the preponderance of the evidence
    standard, this means over 50% or “more than half”.]

    (C) The intended United States operation, within one year of the approval of the petition, will support an executive or managerial position as
    defined in paragraphs (l)(1)(ii) (B) or (C) of this section, supported by information regarding:

    (1) The proposed nature of the office describing the scope of the entity, its organizational structure, and its financial goals;

    (2) The size of the United States investment and the financial ability of the foreign entity to remunerate the beneficiary and to
    commence doing business in the United States; and

    (3) The organizational structure of the foreign entity.

    [REQUIRED EVIDENCE: Documentary evidence explaining the functions and staff of the “new office” such as a detailed, comprehensive, and credible “Business Plan”.[10]

    Such a Business Plan for a new office often includes pro forma data for the 1 year, 3 year and 5 year marks or “anniversaries” since opening the
    “new office”. Naturally, the staffing levels need to be included along with job description of any direct or indirect subordinates whether at they are
    located at the “new office”, the parent company, or doing outside work.]

    (vi) If the petition indicates that the beneficiary is coming to the United States in a specialized knowledge capacity to open or to be
    employed in a new office, the petitioner shall submit evidence that:

    (A) Sufficient physical premises to house the new office have been secured;

    (B) The business entity in the United States is or will be a qualifying organization as defined in
    paragraph (l)(1)(ii)(G) of this section; and

    (C) The petitioner has the financial ability to remunerate the beneficiary and to commence doing business in the United States.


    Assigning L-1 staff to “other employers” is specifically prohibited if that “other employer” actually exercises control over the L-1 worker and his or
    her work, i.e., using the L visa to open up “job shops” is not allowed.]

    (vii) If the beneficiary is an owner or major stockholder of the company, the petition must be accompanied
    by evidence that the beneficiary's services are to be used for a temporary period and evidence that the beneficiary will be transferred to an assignment
    abroad upon the completion of the temporary services in the United States.

    (viii) Such other evidence as the director, in his or her discretion, may deem necessary.


    To summarize the critical points that must be fully supported upon filing the individual petition for an L-1 intracompany transferee in a
    new office scenario one must at least minimally satisfy certain prerequisites. Those prerequisites are spelled out in the regulations at 8 CFR
    214.2(l)(3)(v)(A-C) and (vi)(A-C), as well as (vii), if applicable. The key documentary evidence that is NOT spelled out for you is the need for a
    solid Business Plan for that new office; some type of written confirmation of securing sufficient physical premises; sufficiently detailed job descriptions for the old
    and new positions for the qualified beneficiary.


    That last item above is a free-pass for USCIS to be “inquisitive” but may have been misused by some overzealous “Culture of No” type adjudicators to
    restart the Spanish Inquisition, you know, from back in the “dark ages”! To fight that type of attack, we must remind USCIS that they are also
    bound by the Kazarian Decision from the Ninth Circuit Court of Appeals which the agency has accepted and is applying nationwide. To paraphrase a
    point from Kazarian,

    the court determined that USCIS and AAO had unilaterally imposed novel substantive or evidentiary requirements beyond those set forth in the

    . Unless NOT fully explained and justified such that a reasonable adjudicator could truly fault a discretionary request
    for additional evidence that USCIS “may deem necessary”, it won’t be amendable to attack as being a novel substantive or evidentiary requirement. Defending against such “novel ….. requirements”, the request must be
    obviously arbitrary, capricious, discriminatory, or clearly contrary to law or else, the argument is not worth making.

    That’s my two-cents, for now.

    The author reserves and holds for his own use, all rights provided by the copyright law, including but not limited to distribution, producing copies or
    reproducing, sales of this document. Any other use is only by consent of the author. This article is a general summary of complex immigration law issues.
    No legal advice is provided in this article. Please consult your own attorney for advice applicable to your particular circumstances.

    All rights reserved by Joseph P. Whalen ©

    These dependents are lumped together as L-2 non-immigrants. The spouse is allowed to apply for work authorization from USCIS (an
    EAD), the children are not allowed to seek work authorization as an L-2.

    Making this determination is the underlying consideration as to whether or not it is a “New Office”.

    There will be greater discussion about the “functional manager” further below.

    You’ll have to look elsewhere to get a better citation when and if it is reported.

    Brazilian cowboy (gaucho) barbeque.

    See many cases of note at:

    The excerpt should be easy to spot as they are cut-and-pasted images that look different from the rest of the text.

    See the non-precedent at:

    Although it is NOT required, I recommend striving for a Business Plan that could meet the expectations expressed by AAO in Matter of Ho,
    22 I&N Dec.206 (AAO 1998).

    Although it is NOT required, I recommend striving for a Business Plan that could meet the expectations expressed by AAO in Matter of Ho,
    22 I&N Dec.206 (AAO 1998).

    About The Author

    Joseph P. Whalen is not an attorney. He is a former government employee who is familiar with the INA. His education is in Anthroplogy with a concentration in Archaeology and has both a BA (from SUNY Buffalo) and an MA (from San Francisco State University) in Anthroplogogy. He previously worked as an Archaeologist for the U.S. Forest Service before becoming an Adjudicator with INS which became USCIS.

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

  2. #2
    An updated version with an additional section on the "Function Manager" may be accessed at:

  3. #3
    More than one of several immigration bills now pending in Congress address this specific topic. The first one I encountered after writing this article may be found here:

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