Key considerations in converting an L-1 to a Green Card through EB-1c
Purchasing a franchise is rightly considered an effective means of making not only a promising investment, but also a way to acquire temporary or even permanent residency in the United States. There are various visas that are suitable to the franchise scenario. An E-2 visa is the most common and accessible visa when acquiring a franchise. However, only a limited number of countries have the requisite E-2 treaty with the U.S. The other most common option is an L-1 visa.
L-1 Visa vs. E-2 Visa
An L-1 can be an effective vehicle for acquiring temporary residency while purchasing a franchise. However, there are quite a few more requirements that need to be satisfied in the L-1 scenario. Some of these include the fact that there might be an affiliated company outside the U.S. where the investor worked as an executive for at least a year prior to the application; that the investor can only work as an executive or manager at the U.S. company; and that more employees need to be employed at the U.S. business than in an E-2 scenario.
Advantages of the L-1 Visa vs. E-2 Visa
One clear advantage, however, of using an L-1 is the ability to convert from an L-1 to a Green Card through an EB-1c petition. With the E-2, there really is no direct means of converting to a Green Card. The only possible route of converting an E-2 to a Green Card is through an EB-5. However, this can be challenging route since it requires hiring at least 10 employees, investing at least $500,000 depending on the location of the business (which amount is quite likely to increase this year to approximately $800,000), and proving the source of funds of the investor’s money.
Challenges with the L-1 Visa
However, the L-1 route with later conversion to an EB-1c is not without challenges too. First of all, given the visa’s requirements, the business being acquired or opened for an L-1 generally needs to be larger than that of an E-2 both in terms of investment amount as well as employees being hired. Given recent adjudication trends, our view is that at the bare minimum 5-6 employees need to be hired by the end of the first year of the L-1 visa (assuming the firm was just opened). By comparison, an E-2 business does not necessarily need that many employees. In addition, USCIS wants to see a more complicated management structure in an L-1 business. This means that there generally needs to be at least 2 managers (included in that number of 5-6 employees mentioned above) under the management of the L-1 applicant by the end of the first year of operations. Again, with an E-2 there is no need such as this for mid-level managers.
Transition your L-1 to the Green Card (EB-1c)
Where things get a bit trickier is when making the transition from the L-1 visa to the Green Card through an EB-1c petition. First of all, the requirements to extend an L-1 are not equivalent to those to successfully file for an EB-1c. There are similarities, but generally the requirements are nonetheless higher to receive the Green Card. In short, the general requirements to receive an EB-1c are the following:
- Although no minimum number is stipulated in the law, from our experience there needs to be at least (and preferably more) 8 subordinates under the applicant’s oversight;
- There are two different layers of employees under the applicant (mid-managers and then workers under them) and
- The company needs to prove its ability to pay the applicant’s salary. If the applicant is already employed (which is true if he or she has an L-1), then this requirement generally is quite easy (unless the applicant was employed only part-time as an L-1 holder or was receiving a very low salary). Proof of ability to pay is usually by submitted recent tax returns showing the company has adequate funds. But, again, if the applicant as an L-1 holder is already on the payroll and receiving a market salary as an executive, then that counts towards this requirement.
- It should be kept in mind during all times of the process, the foreign company needs to continue to actively operate and function. If the overseas firm significantly changes operations, reduces personnel, or closes, this would almost certainly prevent the client from getting an EB-1c (or renewing the L-1).
Improving your Chances of Approval
Other features that improve chances of approval of a Green Card are:
- Having multiple locations within your company. If you own several stores or locations as part of your franchise, this will significantly improve the chances of receiving the Green Card; and
- Buying a business that involves any type of manufacturing, industrial work, or construction. This is due to the likely fact that these types of businesses require various types of skilled personnel with various functions. At the opposite extreme, restaurants or cafes with just one location tend to have greater challenges with getting approval for an EB-1c, since USCIS is skeptical about the applicant working only as an executive (and not assisting with the day-to-day tasks of running a restaurant such as working in the kitchen or out on the floor with customers);
In any event, the likelihood of success truly depends on the circumstances of each individual case, since there are often mitigating factors that could affect the outcome. It is best to consult with an experienced immigration attorney to determine what approach would be best for you and most likely lead to success.
About the Author
Charles Raether is the Managing Partner and founder of AmLaw Group (www.amlawglobal.com), a boutique immigration law firm in the Miami metro area, dedicated to assisting foreign businesses and entrepreneurs with their business, investment, and immigration matters in the U.S. AmLaw advises on EB-5, L-1, E-2, EB-1 and other investor and business-related visas for clients seeking to acquire temporary or permanent residency in the United States.
AmLaw Group PLLC
+1 (305) 509-6400