Qualifying Relationship Fundamentals

Every L-1 qualifying relationship petition must prove a valid corporate connection between the foreign employer and US petitioner. Four relationship types qualify: parent, subsidiary, branch, or affiliate. Understanding which relationship applies to your situation determines what documentation USCIS requires.

Ownership and control are the two critical concepts. Ownership means legal right of possession with full power and authority over the entity. Control means right and authority to direct management and operations. Both elements must exist for qualifying relationships, though specific ownership percentages vary by relationship type.

L-1 qualifying relationship requirements prohibit certain arrangements. Contractual relationships don't qualify. Licensing agreements don't qualify. Franchise arrangements don't create qualifying relationships. Joint ventures below 50 percent ownership typically don't qualify unless demonstrating actual control.

The qualifying relationship must exist throughout the beneficiary's L-1 stay. Any ownership or control changes after petition approval require amended petitions. USCIS treats relationship changes as material modifications affecting eligibility.

Both entities must be actively doing business. Dormant corporations don't qualify. Holding companies without operations don't qualify. Shell companies established solely for immigration purposes raise fraud concerns. Real business activity in both countries is mandatory.

Beyond Border helps multinational companies structure and document L-1 qualifying relationship compliance for successful petition outcomes.

Parent-Subsidiary Relationships

L-1 parent subsidiary evidence requires proving one entity directly or indirectly owns more than 50 percent of another entity. Direct ownership is straightforward. Parent Company A owns 75 percent of US Company B. Simple documentation shows stock ownership and control.

Indirect ownership involves ownership chains. Foreign Company A owns 80 percent of Holding Company B, which owns 70 percent of US Company C. The relationship between A and C qualifies despite indirect ownership. Document each ownership level in the chain completely.

Joint ventures can create parent-subsidiary relationships under specific conditions. If two companies each own 50 percent of a venture and share equal control, both parent companies have qualifying relationships with the venture. Evidence must prove equal financial contributions and control rights.

Less than majority ownership sometimes qualifies if proving actual control despite minority stake. For example, owning 45 percent with remaining 55 percent distributed among ten small shareholders might establish control if demonstrating management authority and decision-making power.

Stock certificates alone don't suffice for L-1 ownership documentation. Include shareholder ledgers showing all issued shares, bylaws defining voting rights, and board meeting minutes demonstrating control over major decisions. USCIS wants complete ownership pictures, not isolated documents.

Beyond Border guides petitioners through assembling comprehensive L-1 parent subsidiary evidence packages including all required ownership chain documentation.

Affiliate Relationships

L-1 affiliate relationship proof requires showing same individuals or entities own and control both companies. Two scenarios commonly qualify. First, same group of people owns both entities in approximately similar proportions. Second, one entity owns and controls both companies through majority ownership.

Approximately similar proportions requires close percentage alignment. If four individuals own Foreign Company with 25 percent, 25 percent, 25 percent, 25 percent distribution, and own US Company with 24 percent, 26 percent, 25 percent, 25 percent distribution, affiliate relationship exists. Percentages needn't match exactly but should be reasonably close.

Significant proportion differences break affiliate relationships. If ownership distribution is 25 percent, 25 percent, 25 percent, 25 percent abroad but 60 percent, 20 percent, 10 percent, 10 percent in US entity, affiliate relationship likely fails. USCIS interprets "approximately similar" narrowly.

Common parent ownership creates affiliates. Company X owns 51 percent of both Company Y and Company Z. Y and Z are affiliates of each other through common parent control. Document the parent's ownership of both entities clearly.

L-1 cap table requirements become critical for affiliate relationships. Detailed capitalization tables showing every shareholder, exact ownership percentages, share classes, and voting rights for both entities help USCIS verify proportion similarity.

Beyond Border helps clients document complex L-1 affiliate relationship proof arrangements including multi-shareholder ownership structures.

Essential Documentation Checklist

Complete L-1 ownership documentation packages include multiple document types proving qualifying relationships conclusively. Start with corporate formation documents. Articles of incorporation, certificates of formation, or equivalent documents for both entities showing legal existence and structure.

Stock certificates and shareholder ledgers must show complete ownership. Every shareholder's name, number of shares owned, and percentage ownership. Include certificates for all major shareholders and ledgers tracking all share issuances and transfers over time.

Corporate bylaws define governance structures and ownership rights. Include sections addressing share classes, voting rights, board composition, and management authority. Bylaws prove who controls the company beyond just ownership percentages.

Board meeting minutes demonstrate control exercise. Include minutes from meetings where major decisions occurred: budget approvals, officer appointments, policy adoptions, significant contracts. These show ownership translates to actual control.

Tax returns for both entities prove business operations and often list ownership information. Include relevant pages showing shareholders or partners and their ownership interests. Financial statements provide additional ownership verification.

Organizational charts visually depict relationships. Include charts showing ownership structures, management hierarchies, and business unit relationships. Visual representations help USCIS officers quickly understand complex corporate structures.

L-1 cap table requirements include detailed spreadsheets showing fully diluted ownership after accounting for options, warrants, or convertible securities. Startup companies must show cap tables reflecting all potential ownership scenarios.

Beyond Border provides comprehensive L-1 corporate structure documents checklists ensuring petitioners submit complete evidence packages.

Special Situations and Challenges

Complex ownership structures require additional documentation. When ownership involves holding companies, investment funds, or multi-tier corporate hierarchies, trace complete ownership chains. Missing any link in the chain undermines qualifying relationship proof.

Publicly traded companies use different evidence standards. Annual reports, SEC Form 10-K filings, and Securities and Exchange Commission documents replace standard ownership documentation. These reports list subsidiaries and affiliates with ownership percentages, providing USCIS accepted proof.

Recent acquisitions or mergers complicate qualifying relationships. Include transaction documents showing how ownership changed, when relationships were established, and proof current structure satisfies qualifying relationship requirements. USCIS scrutinizes new relationships carefully.

Partnership structures need partnership agreements showing partner identities, capital contributions, profit sharing arrangements, and management authority. Partnerships can meet qualifying relationship definitions if same partners own both entities in similar proportions.

Limited liability companies present unique documentation challenges. Operating agreements replace corporate bylaws. Membership certificates replace stock certificates. Include complete LLC governance documents showing member ownership and control rights.

Trust ownership requires trust documents showing trustees, beneficiaries, and control provisions. When trusts own companies involved in L-1 relationships, document both trust terms and how trust ownership translates to control.

Beyond Border navigates complex L-1 qualifying relationship requirements scenarios ensuring proper documentation regardless of corporate structure complexity.‍

Frequently Asked Questions

What is a qualifying relationship for L-1 visa? A qualifying relationship exists when foreign and US entities are connected as parent, subsidiary, branch, or affiliate through common ownership and control, allowing intracompany transfer of managers, executives, or specialized knowledge workers.

How much ownership is needed for L-1 qualifying relationship? Parent-subsidiary relationships require over 50 percent ownership, while affiliate relationships require approximately similar ownership proportions among same shareholders or common parent controlling both entities with majority stakes.

What documents prove L-1 qualifying relationship? Stock certificates, shareholder ledgers, corporate bylaws, board meeting minutes, tax returns, organizational charts, formation documents, and cap tables showing complete ownership structures and control rights for both entities.

Can affiliate companies have different ownership percentages? Affiliate companies must have approximately similar ownership proportions among same shareholders, meaning percentages should be reasonably close though not identical, with significant variations potentially disqualifying affiliate relationships.

How do you document complex ownership chains for L-1? Document each ownership level completely including intermediate holding companies, showing ownership percentages and control rights at every tier from ultimate parent through subsidiaries to establish complete qualifying relationship chain.