L-1 for your new US office: the first year decides

The L-1 gets you to the US even when all that exists there is a freshly formed company and a lease. The regulations call this a "new office": an operation that has been doing business in the US for less than a year. Starting early comes at a price. The first approval is valid for one year at most, and after that USCIS wants to see that the plan has become a real business.

This guide shows what counts as a new office for the L-1, what evidence the petition needs, what matters in the first twelve months and which documents must be on the table at extension. The general conditions, meaning the relationship between the companies and the year of employment abroad, are covered in the guide to L-1 requirements. For an overview of the whole visa, see the L-1 guide.

1New means: less than a year in business

The definition is in the federal regulations, 8 CFR 214.2(l)(1)(ii)(F). A new office is an organization that has been doing business in the US through a parent, branch, affiliate or subsidiary for less than one year. So what counts is not the date of incorporation but the start of business activity. A corporation incorporated two years ago that has never sold anything is not yet doing business under the rule. A subsidiary that has been supplying customers for fourteen months, on the other hand, is no longer a new office.

For USCIS, doing business means the regular, systematic and continuous provision of goods or services. An agent, a mailing address or a registered office alone does not qualify. The definition applies to all four types of relationship, and the organization can be a US or a foreign company. Under the USCIS Policy Manual, even a company already operating in the US that opens another office at a new location can use the new office rules if it meets the definition.

One formality is often overlooked. The petition must expressly request review as a new office and explain how the office meets the conditions. Without that request, USCIS applies the standards of an ordinary petition. A company with no staff and no revenue would then have to support a managerial position on the day of filing, which it can hardly show. Among the factors USCIS weighs for a new office, the Policy Manual lists the size of the investment, the planned staffing structure, the product or service, the premises and the financial viability of the company abroad.

2Subsidiary or branch: the relationship counts, not the label

For the L-1, what matters is the relationship between your company at home and the entity in the US. Two basic forms can support a new office.

2.1The subsidiary

A subsidiary is a separate company owned by your company at home. The regulation requires that the parent, directly or indirectly, owns more than half and controls the subsidiary, or owns exactly half and controls it, or in a joint venture owns 50 percent with equal control and veto power, or owns less than half but in fact controls the subsidiary. If you form the subsidiary as a Corporation (Inc), ownership is proven by the articles of incorporation, the bylaws, the stock ledger, minutes and resolutions, and the transfer of capital. A stock certificate alone is usually not enough for USCIS.

2.2The branch

A branch is an operating division of the same company in another location. As evidence, the Policy Manual mentions, for example, a state business license for the foreign company, a foreign corporation's tax return on Form 1120-F, payroll tax filings on Form 941, W-2 wage statements showing the branch as employer, or a lease for office space in the US. What the two forms mean for liability and tax is compared in the guide Branch or subsidiary. For the bigger picture, from sales to staffing, see US market entry.

3Three proofs before the first phone rings

For a manager or executive coming to open or work in a new office, 8 CFR 214.2(l)(3)(v) requires three things. First: sufficient premises for the office have been secured. Second: in the three years before filing, you were employed for one continuous year as a manager or executive, and your future position gives you managerial authority over the new operation. Third: within one year of approval, the US operation will support a managerial or executive position.

You prove the third point with information on the nature and scope of the office, its organizational structure and financial goals, the size of the US investment, the ability of the company abroad to pay your salary and start operations, and the organizational structure of the company abroad. The Policy Manual expressly notes one special rule: for an L-1A in a new office, your year abroad must have been in a managerial or executive role. A year as a specialist is not enough here, even though it can suffice for other L-1 petitions. What manager and executive mean under the law is explained in the guide to L-1 requirements.

For specialists, 8 CFR 214.2(l)(3)(vi) applies. Here too, premises must be secured; in addition, the US entity must be or become a qualifying organization, and the company must be able to pay your salary and start operations. The specialist needs specialized knowledge as with any L-1B, meaning special knowledge of the company's products or processes. A plan for managing staff within a year is not required.

4Premises USCIS can believe in

The regulation speaks of "sufficient physical premises" that have been secured. Because USCIS assesses eligibility as of the filing date, the premises must be secured on that day. A letter of intent from the landlord does not count; a signed lease does. A mere mailing address fits poorly with a rule under which the mere presence of an office is not yet doing business.

Sufficient depends on the plan. If your business plan describes a sales operation with three employees, a warehouse and customer visits, you need premises to match. If you provide engineering services to two major clients, you can manage with less. Make the premises tangible: a lease with term, floor area and permitted use, plus photos and a floor plan. The rent belongs in the financial projections you submit anyway.

5The twelve-month plan: from doer to manager

At the start, you do a lot yourself. The State Department expects that too: under the Foreign Affairs Manual, a manager in a new office is more involved in day-to-day work in the early phase, but must have the authority and intent to hire staff and wide latitude over the company's goals and direction. The plan shows how, within a year, that early phase becomes a structure in which others handle the operational work and you lead.

The law sets no minimum number of employees. If USCIS looks at staffing levels, INA 101(a)(44)(C) requires it to consider the reasonable needs of the organization in light of its purpose and stage of development. Under the Foreign Affairs Manual, even a company's sole employee can qualify as a manager if their main job is to plan, organize and direct the company's essential functions through others. Those others need not be employees: the Policy Manual recognizes that small companies outsource bookkeeping, sales, warehousing or HR to service providers. USCIS then asks who actually performs the non-managerial tasks.

A solid plan for the first year therefore includes:

• an org chart for the start and one for the end of the first year, showing the positions reporting to you,
• hires or service providers with timing, role and budget,
• revenue and cost projections for the first years that match the investment and the staffing plan,
• your duties with shares of working time, today and after twelve months,
• proof that the parent company has the money: annual financial statements, bank statements, a resolution on capitalizing the subsidiary.

Support from the team at home counts, as long as it is documented. Under the Policy Manual, a simple statement that staff abroad will help carry the US position is usually not enough. Org charts, staff lists, payroll records and intercompany invoices make it verifiable.

6The company at home has to keep running

The L-1 is a visa for businesses with a foot in two countries. A qualifying company abroad must keep providing goods or services on a regular basis throughout your entire stay. Under the Policy Manual, a dormant company, a mere agent or a pure holding company abroad does not qualify. The Foreign Affairs Manual is even clearer: the L-1 is not designed for self-employed people to continue their self-employment in the USA, nor for moving a foreign business to the USA entirely. If you want to relocate your whole business, you need a different route, and the Visa Roadmap shows which one fits.

As an owner, you have one more obligation. If the beneficiary is the owner or a major shareholder of the company, the petition must show under 8 CFR 214.2(l)(3)(vii) that the US assignment is temporary and that you will then move on to a role abroad. This applies to the owner-managing director of a private limited company at home just as much as to the majority shareholder of a Swiss AG. It does not conflict with a green card: under 8 CFR 214.2(l)(16), as an L-1 holder you may pursue permanent residence at the same time, as long as you are willing to leave voluntarily when your authorized stay ends.

In practice, this means someone at home keeps running the business, and the petition shows who that is. The contracts between parent and subsidiary, transfer pricing and the question of where you pay tax belong in the tax plan. Employment and social security questions around the posting are covered in the guide Sending employees to the USA.

7After twelve months, USCIS takes another look

A regular L petition can be approved for up to three years, a new office petition for one year at most. After that, under 8 CFR 214.2(l)(7)(i)(A)(3), the company must show that it is doing business. Under 8 CFR 214.2(l)(14)(ii), the extension requires evidence that both companies are still qualifying organizations, that the US company has been doing business over the past year, a description of your duties over the past year and during the extension period, a staffing overview with the number of employees, the types of positions and, for L-1A, proof of wages paid, as well as evidence of the US company's financial condition.

This list is the real test of the new office. The initial approval rests on a plan; the extension rests on numbers. If you post your first job opening in month eleven, you will have little to show at extension time. So plan backwards: by month nine, hires, payroll through a payroll provider and the first quarterly filings should be in place, so your documents are complete when the application goes out.

Three rules on timing. As a rule, the petition extension can only be requested while the original petition is still valid. The petition extension and the extension of your stay are requested together on Form I-129, and you must be in the USA when it is filed. And under the Foreign Affairs Manual, the visa in your passport may be valid longer than the petition; even so, you may only enter for the validity of the petition, plus up to ten days before and after.

After the first year, USCIS extends the new office petition by up to two years. From then on, every further extension counts as a regular L extension, again in steps of up to two years, up to the maximum of seven years on L-1A and five years on L-1B. The guide L-1 validity, extension and maximum stay explains the deadlines in detail. Where extensions typically get stuck is covered in L-1 denied or RFE.

8What the petition costs in fees

The petition fees are paid by the company that files it. For a new office, one line of the fee schedule is especially interesting: under 8 CFR 106.1(f)(1), a small employer is one with no more than 25 full-time equivalent employees in the USA, including affiliates and subsidiaries. Only employees in the USA are counted. A new subsidiary that has not yet hired anyone in America, and whose group has no larger workforce there either, therefore pays the reduced base fee and half the Asylum Program Fee.

The fee under Pub. L. 114-113 only applies to employers with at least 50 employees in the USA, more than half of whom work in H-1B or L status. For a new office, it plays practically no role. Premium Processing is optional and costs extra; in return, USCIS commits to a decision or a request for evidence within 15 business days. At the consulate, the State Department's application fee for the visa itself is added. All petition and visa fees, including for your family, are in the guide L-1 costs and fees.

9From year one: the path to a green card

The L-1 allows dual intent: intending to stay permanently does not stand in the way of the visa. For managers and executives, the path to a green card often runs through the EB-1C category for multinational managers and executives. For a new office, one condition is decisive: under 8 CFR 204.5(j)(3)(i)(D), the prospective US employer must have been doing business for at least one year. So the first year of the new office is not just the trial period for the visa, it is also the waiting period for the green card.

That makes planning simple. What you need for the L-1 extension, meaning staff, wages, revenue and a management role you can document, is also the foundation of the EB-1C petition. How small and young subsidiaries clear this hurdle is explained in the guide EB-1C for small and new US subsidiaries. For an overview of all routes, see From L-1 to green card.

10The order that works

A new office is a project with two tracks: the company and the visa. They interlock, and the order of steps decides whether everything is in place on the day you file.

1. Sort out things at home. Who keeps running the business, who goes to the USA, and does that person meet the one-year requirement as a manager or executive? The shareholders resolve to form the subsidiary and decide on its capitalization.
2. Form the US company. Choose the legal form and state, apply for the EIN and open a US bank account to receive the capital.
3. Secure premises. Sign the lease before the petition is filed.
4. Write the plan. Org charts, hiring plan, financial projections and your duties, backed by the parent company's financial statements.
5. File the petition. Form I-129 with an explicit request for review as a new office, with Premium Processing if you wish.
6. Apply for the visa. With the approval on Form I-797, you apply for the visa at the responsible US consulate; the process and interview are described in the guide Applying for the L-1.
7. Document the first year. File hires, wages, contracts, invoices and financial statements as you go, so the extension is built from documents that are already in place.
8. File the extension on time. While the first petition is still valid and while you are in the USA.

Whether the L-1 is the right route for you and your family, or whether the E-2 investor visa fits better, depends above all on whether there is a company at home that can send you. If there is, the L-1 is the faster and simpler route, and the new office is its natural starting point.

In short

• A new office for L-1 purposes is an organization that has been doing business in the USA for less than one year; the petition must explicitly request review as a new office.
• For L-1A, you need secured premises, one year as a manager or executive abroad, and a plan showing the business will support a genuine management position within one year.
• The first approval is valid for one year at most. For the extension, you show business activity, staff, wages paid and the US company's finances.
• The company at home must keep doing business throughout your stay. As an owner, you also show that your US assignment is temporary.
• Once the US company has been doing business for a year, the path to an EB-1C green card opens up too.

How we help you

• Visa Roadmap for Company FormationFormation and visa in one plan, so the company carries the visa.
• Form a CorporationThe US corporation (Inc) for growth, investors and your visa.
• Visa RoadmapIn writing: which visa fits you and your family, prepared with the immigration attorney on the firm's team.
• Tax structureA clean structure between parent company and US subsidiary, or between you and your US company, coordinated with your accountant.
• PayrollPayroll, payroll taxes and filings for your employees in the USA.
• Visa and Green Card ConsultationWhich route to the USA fits you, settled in one conversation.