remanded EB-1C Case: Machine Tool Supplies

rdentifying data deleted to 
preve~m t clearly unwarranted 
invasion of personal privacy 
U.S. Department of Homeland Security 
20 Mass. Ave.. NW, Rm. A3042 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
Services 
Petition: 
 Immigrant Petition for Alien Worker as a Multinational Executive or Manager Pursuant to 
Section 203(b)(l)(C) of the Immigration and Nationality Act, 8 U.S.C. 9 1 153(b)(l)(C) 
IN BEHALF OF PETITIONER: 
INSTRUCTIONS: 
This is the decision of the Administrative Appeals Office in your case. All documents have been returned to 
the office that originally decided your case. Any further inquiry must be made to that office. 
dministrative Appeals Office 
WAC 02 045 56164 
Page 2 
DISCUSSION: The preference visa petition was denied by the Director, California Service Center. The 
matter is now before the Administrative Appeals Office (AAO) on appeal. The case will be remanded for 
further consideration and a new decision. 
The petitioner was incorporated in 1998 in the State of California and is claimed to be a subsidiary o 
located in China. The petitioner is engaged in the business of importing 
chucks and other machine tool supplies to the United States. It seeks to employ the beneficiary as its deputy 
manager. 
 Accordingly, the petitioner endeavors to classify the beneficiary as an employment-based 
immigrant pursuant to section 203(b)(l)(C) of the Immigration and Nationality Act (the Act), 8 U.S.C. $ 
1 153(b)(l)(C), as a multinational executive or manager. 
The first issue the director addressed was that of qualifying employment. Namely, the director denied the 
petition concluding, in part, that "[ilt is contrary to common business practice and defies standard business 
logic for such a company to have another executive, as such a business does not possess the organizational 
complexity to warrant having another employee as such." 
The above comment suggests that director based his decision, in part, on an improper standard. The director's 
above comments are inappropriate. The director should not hold a petitioner to his undefined and 
unsupported view of "common business practice" or "standard business logic." The director should, instead, 
focus on applying the statute and regulations to the facts presented by the record of proceeding. Although 
CIS must consider the reasonable needs of the petitioning business if staffing levels are considered as a factor, 
the director must articulate some reasonable basis for finding a petitioner's staff or structure to be 
unreasonable. See section 10 1 (a)(44)(C) of the Act, 8 U.S.C. 5 1 10 1 (a)(44)(C). The fact that a petitioner is a 
small business or engaged in sales or services will not preclude the petitioner from qualifying for an 
immigrant visa classification under section 203(b)(l)(C) of the Act. 
The director also concluded that the petitioner's description of the beneficiary's duties is not sufficient to 
establish that such duties will be primarily of a managerial or executive nature. However, as properly pointed 
out by counsel, the director did not include a discussion of the beneficiary's duties even though he previously 
listed them in his decision. Nor did he specify which of the duties he found to be non-qualifying. The 
director merely concluded that because the petitioning organization has "only" six employees the beneficiary 
would have to be involved in performing non-qualifying duties. 
Although the director may and should consider the size of the petitioner's work force, such consideration 
should be made only for the sake of determining whether the petitioner employs enough people to relieve the 
beneficiary from having to perform non-qualifying duties. In the instant case, there is little evidence to 
suggest that the director actually analyzed the beneficiary's list of duties. Therefore, it is impossible to 
determine whether the director's conclusion was based only on the number of the petitioner's personnel, or 
whether it was based on the determination that the beneficiary's duties indicate that the size of the work force 
prevents him from focusing primarily on managerial or executive duties. The director must include a full 
analysis of the beneficiary's duties rather than generally stating that the duties performed are not qualifying. 
WAC 02 045 56 164 
Page 3 
The director further concluded that the beneficiary would not qualify as a personnel manager because the 
petitioner the employees supervised are neither professional nor managerial. Although the director provided 
the petitioner with the definition of "professional," he failed to indicate how he arrived at the conclusion that 
the beneficiary's subordinates did not fit that definition. That determination could have been made with 
relative ease as the petitioner provided both an organizational chart illustrating its organization's hierarchy, as 
well as detailed job descriptions of the beneficiary's immediate subordinates. However, the denial does not 
indicate that the director gave due consideration to either of the submitted documents, both of which are 
crucial to a determination regarding the employees' status as professionals. 
Similarly, the director's determination that the beneficiary's subordinates are not managers is based on an 
improper interpretation of the law. Contrary to the director's interpretation, the definition of managerial 
capacity contained in section 101(a)(44)(A) of the Act applies to the beneficiary of the present petition and 
not to his subordinate employees. Based on the director's reasoning, no beneficiary would qualify as a 
manager if the organization's ultimate, lower tier subordinate was not a managerial employee, regardless of 
how many layers of management lay between the beneficiary and the non-managerial employee. According 
to the director, each tier of management would be disqualified as the first-line supervisor of non-managerial 
staff. The director must base his conclusion only on the second tier of employees who work directly under 
the beneficiary. Consequently, the beneficiary may not be disqualified based on the conclusion that he does 
not manage professional employees where the sole basis for such reasoning is that the second tier of managers 
supervises the petitioner's non-professional employees. 
Finally, in determining whether the beneficiary is a functional manager, the director shall first look to see 
whether the petitioner has established which function the beneficiary claims to manage and whether that 
function is essential to the petitioning organization. Only if the petitioner successfully meets this initial 
evidentiary burden does the director need to go into a full discussion of whether the beneficiary's duties are 
those of a function manager. In the instant case, the petitioner has not clearly established which function(s) 
the beneficiary manages and whether it/they are essential. Although the petitioner appears to infer that the 
beneficiary is a functional manager, the documents submitted suggest that the beneficiary's duties are those of 
a personnel manager. The director must address this issue and request any additional documentation in order 
to clarify whether the petitioner is making the claim of a functional manager. If the petitioner is, in fact, 
making that claim, the director must establish whether the initial evidentiary burden is met, as described 
above. 
The other issue addressed in the denial was that of a qualifying relationship between the petitioner and a 
foreign entity. The director determined that the petitioner failed to submit sufficient evidence that the named 
foreign entity actually paid for its portion of the petitioner's stock. The director based his determination, in 
part, on item no. 4 of Schedule K of the petitioner's 2000 income tax return in which the petitioner indicated 
that it is not a subsidiary in an affiliated group or parent-subsidiary relationship. 
However, the petitioner has overcome this issue on appeal by submitting the Internal Revenue Service's (IRS) 
definition of a parent-subsidiary controlled group. The definition suggests that the parent must own at least 
80% of the petitioner's voting stock in order to be considered a subsidiary in a controlled group. The 
petitioner has maintained, since the date it filed the petition, that it's foreign parent has only 70% of its shares. 
WAC 02 045 56164 
Page 4 
In light of IRS's definition, the petitioner properly filled out the Schedule K portion of its tax return and has 
not compromised its claim of a qualifying parentlsubsidiary relationship with the foreign entity. Furthermore, 
careful review of the same schedule of the same tax return indicates that the petitioner specified that it is 
majority owned by a foreign corporation. 
Finally, the director determined that the petitioner failed to establish that it is owned and controlled by a 
qualifying foreign entity because it did not submit original wire transfers from the parent company 
documenting that company's purchase of the petitioner's stock. 
However, the petitioner's response to the director's request indicates that the foreign entity did not directly 
offer monetary consideration in exchange for the petitioner's stock. Instead, the petitioner claims that it the 
parent corporation contributed $140,000 worth of tools and equipment in exchange for the petitioner's stock. 
A review of the documents submitted in response to the director's request for additional evidence indicates 
that the petitioner submitted a number of invoices and shipping documents enumerating the type and 
monetary value of the equipment bought and sent by the foreign entity to the petitioner in the United States. 
The director, therefore, was incorrect in determining that the petitioner failed to establish the foreign entity's 
ownership and control over the U.S. entity. While the director's request for evidence on this point was 
reasonable and relevant to the petitioner's eligibility, there is no statute or regulation that specifically requires 
a petitioner to transfer monetary funds in exchange of ownership. A petitioner may also exchange an 
ownership interest in the company for goods, services, or "sweat equity." However, if a petitioner claims that 
goods or services were contributed by the claimed overseas owner, the petitioner should submit evidence of 
this transfer. In the instant case, stock in the petitioning entity was purchased with equipment rather than with 
a direct money transfer. The petitioner, therefore, has overcome this portion of the director's objection. 
Accordingly, this case will be remanded for the purpose of determining whether the beneficiary has been and 
will be employed by the U.S. petitioner in a managerial or executive capacity. The director shall ask for any 
additional evidence deemed necessary in making such a determination and render a decision accordingly. 
ORDER: 
 The decision of the director, dated September 20, 2002, is withdrawn. 
 The matter is 
remanded for further action and consideration consistent with the above discussion and entry 
of a new decision which, if adverse to the petitioner, shall be certified to the AAO for review.