Another, higher level of business visa to the U.S.

In the time of the Covid-19 pandemic, the laws of nature still apply. This virus has accelerated the process of natural selection. Big businesses are eating up the small ones that cannot survive the shutdowns and quarantines. Previously, we discussed how Filipino entrepreneurs can take advantage of a treaty of commerce between the Philippines and US to come to the US as E-2 treaty traders or treaty investors and operate small businesses. But if your business is larger, established, and you are financially able to make a bigger investment, there is another level up — the L-1 visa.

There are two main categories of L-1: the L-1A for intracompany transferees at the management or executive level, and the L-1B for intracompany transfers of employees with specialized knowledge. For either visa, you must have worked as an executive or specialized knowledge employee for a Philippine-based company for at least 12 of the last 36 months, ideally continuously. This Philippine company must have a qualifying relationship with a US-based business, and you must be coming to the US to continue your job as an executive or specialized knowledge employee.

Why L-1?

Compared with other types of working visas, L-1s have unique advantages. L-1 visas are issued for three years, with possible two-year extensions up to five years for L-1B or seven for L-1A. L-1s can be granted for Philippine companies starting branches or subsidiaries in the US, although L-1s based on new businesses typically get one year initially, extendable to five or seven as long as you can keep proving all the requirements.

Crucially, L-1 is a dual-intent visa. For most non-immigrant visas (tourist, student, temporary worker), you are not supposed to have the intent to permanently immigrate and stay in the US. However, L-1s can have dual intent, and they can also bring spouses and children (under 21) to the US as dependents. Unlike most other dependent visas, L-2 spouse dependents can apply for and receive authorization to work. Since the requirements for L-1A are similar to the ones for EB-1C green cards, the same business can serve as the basis for an employment-based green card. If approved, that means you can stay and manage the business as a legal permanent resident of America.

Who qualifies for L-1 status?

A quick primer in immigration law basics: While visa and status are related, they are separate concepts. Visas are usually stamps in your passport that you present upon inspection at the border. Once the officer approves your entry, you then have status in the US for the duration you were approved for. One can have a visa without status. For example, anytime you hold a valid visa but are outside the US, you don’t have status. You can also have status without a visa, if for example, you entered the US as one status, then either changed to a different non-immigrant status, or adjusted status to legal permanent residency (commonly known as a “green card”).

For L-1A, your job needs to be in a managerial or executive capacity. While the laws do not specify numbers, you should generally be controlling the work of other employees who rank below you on the operational chart. In the context of investors, this includes being the CEO of the US-based entity, and the business must be operational even if you are not running it – meaning you have an infrastructure and employees working regardless of your day-to-day involvement.

For L-1B, you must be an employee with specialized knowledge. This typically implies that you have a degree (ideally an advanced degree) in a specialized field, with the qualifications people would expect of a professional in that field (licenses, certifications, experience, awards, publications depending on the field). For example, L-1A could be the owner/CEO of a company that produces something, and L-1B could be the engineer in charge of the process or formula of production. A Philippine business could open an American subsidiary and sponsor both.

What kind of business can it be?

Unlike the passive investment of an EB-5 or the small entrepreneurial E-2, a qualifying L-1 business should already be operational and functioning. While there are no explicit requirements, a good rule of thumb is that the business should have at least $1 million in turnover every year – the more, the better. While the US business entity can be new, newer businesses with less history will face stricter scrutiny than businesses that have years of operations on the books. You’ll need to operate a physical office or other applicable locations, and be legally registered as a business by all applicable laws and regulations.

Some examples of businesses that could qualify – you are a Philippine manufacturer of a food or household product, and you open a US distribution company in the US to sell your goods to US retailers or wholesalers. Or, it could be the other way around – you open a US business to supply your Philippine business, maybe by purchasing raw materials or tech solutions that you then import to the Philippines for your Philippine company to use in the course of business.

The businesses do not actually have to be related in terms of the flow of production – they just have to be legally related. The L-1 transferee should have at least a continuous year of working with the Philippine side and be transferred to continue a similar job in the US. If you are the owner of the business, you can come as CEO and also petition for your specialized knowledge employees to come work for you. Hiring Americans is not explicitly required, but would help bolster your case.

Current events and considerations

In June 2020, President Trump issued an executive order banning the entry of L-1s, along with other non-immigrant visa holders in the H and J categories. In August, the State Department updated its guidance, allowing people with existing L-1 visas to enter despite the ban. In October, after litigation sponsored by US companies such as Google, Apple, Amazon, and Walmart, a district judge in Northern California partially lifted the ban, but only for organizations that are part of relevant trade groups that include the National Association of Manufacturers, the US Chamber of Commerce, Technet, Intrax, and the National Retail Federation. The entry of new L-1 visa holders is still banned until December 31, 2020.

President-elect Biden has already promised to lift most of Trump’s travel bans; so once the administration changes, L-1 holders should once again be able to enter the US. Realistically, it will probably take until then anyway to consult with an immigration lawyer, prepare a solid L-1 application, and get an appointment at the US Embassy in Manila. While L-1 can also be done as a change of status within the US, it would be difficult for a student or tourist in another status that does not allow for work authorization to fulfill the requirements above.

The Covid-19 pandemic has impacted businesses and stock markets around the world, but unlike small businesses, many larger businesses are thriving in the new normal. If your company is doing well enough to consider starting a new venture in the US or purchasing one of your suppliers or vendors, perhaps you can consider taking your shot and leveling up. While neither country is perfect, the American economy is much bigger than that of the Philippines, and there is potential to grow your business as America builds back better.

Jath Shao is a lawyer who helps people achieve the American Dream. He is a leader in Filipino-American and Asian-American civic groups that focus on the law, business, and advocating for the immigrant community. Contact [email protected] for any questions or inquiries