sustained EB-3 Case: Venture Capital

identifying data deleted to 
prevent clealy unwarranted 
invasion of personal privacy 
PUBLIC COPY 
U.S. Department of Homeland Security 
20 Mass, N.W. Rm. A3042 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
Services 
FILE: EAC 03 266 5 1843 Office: VERMONT SERVICE CENTER  ate: MAR 2 0 2006 
PETITION: Immigrant petition for Alien Worker as a Shlled Worker or Professional pursuant to 
section 2030>)(3) of the Immigration and Nationality Act, 8 U.S.C. 9 1153(b)(3) 
ON 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. 
Robert P. Wiemann, Director 
Administrative Appeals Office 
EAC 03 266 5 1843 
Page 2 
DISCUSSION: The preference visa petition was denied by the Director, Vermont Service Center, and is 
now before the Administrative Appeals Office on appeal. The appeal will be sustained. 
The petitioner is a private equity investment or venture capital corporation. It seeks to employ the beneficiary 
permanently in the United States as an associate. As required by statute, the petition is accompanied by a 
Form ETA 750, Application for Alien Employment Certification, approved by the U. S. Department of Labor. 
The director determined that the petitioner had not established that it had the continuing ability to pay the 
beneficiary the proffered wage beginning on the priority date of the visa petition. The director denied the 
petition accordingly. 
On appeal, counsel submits a brief and additional evidence. 
Section 203(b)(3)(A)(i) of the Immigration and Nationality Act (the Act), 8 U.S.C. 5 1 153(b)(3)(A)(i), 
provides for the granting of preference classification to qualified immigrants who are capable, at the time of 
petitioning for classification under this paragraph, of performing slulled labor (requiring at least two years 
training or experience), not of a temporary nature, for which qualified workers are not available in the United 
States. 
The regulation at 8 C.F.R. 204.5(g)(2) states in pertinent part: 
Ability of prospective employer to pay wage. Any petition filed by or for an employment- 
based immigrant which requires an offer of employment must be accompanied by evidence 
that the prospective United States employer has the ability to pay the proffered wage. The 
petitioner must demonstrate this ability at the time the priority date is established and 
continuing until the beneficiary obtains lawful permanent residence. Evidence of this ability 
shall be in the form of copies of annual reports, federal tax returns, or audited financial 
statements. 
The petitioner must demonstrate the continuing ability to pay the proffered wage beginning on the priority 
date, which is the date the Form ETA 750 Application for Alien Employment Certification, was accepted for 
processing by any office within the employment system of the U.S. Department of Labor. The petitioner must 
also demonstrate that, on the priority date, the beneficiary had the qualifications stated on its Form ETA 750 
Application for Alien Employment Certification as certified by the U.S. Department of Labor and submitted with 
the instant petition. Matter of Wing's Tea House, 16 I&N Dec. 15 8 (Act. Reg. Cornm. 1977). 
Here, the Form ETA 750 was accepted on June 7,2001. The proffered wage as stated on the Form ETA 750 
is $94,700.00 per year. The Form ETA 750 states that the position requires five years experience. 
With the petition, counsel submitted copies of the following documents: the original Form ETA 750, 
Application for Alien Employment Certification, approved by the U.S. Department of Labor; a U.S. Internal 
Revenue Service Form tax return for 2001; and, copies of documentation concerning the beneficiary's 
qualifications as well as other documentation. 
Because the Director determined the evidence submitted with the petition was insufficient to demonstrate the 
petitioner's continuing ability to pay the proffered wage beginning on the priority date, consistent with 8 
C.F.R. 204.5(g)(2), the Director requested on June 7,2004, pertinent evidence of the petitioner's ability to pay 
EAC 03 266 5 1843 
Page 3 
the proffered wage beginning on the priority date. The Director requested the petitioner's bank account 
information for 200 1. 
In response to the request for evidence of the petitioner's ability to pay the proffered wage beginning on the 
priority date, counsel submitted the petitioner's U.S. Internal Revenue Service (IRS) Form 1120 tax return for 
year 200 1. 
The director denied the petition on August 19,2004, finding that the evidence submitted did not establish that 
the petitioner had the continuing ability to pay the proffered wage beginning on the priority date. 
On appeal, counsel asserts that the petitioner's 2001 federal tax return states "more than adequate cash flow." 
Counsel states that there existed for that year a $501,00.00 liability that consists of unpaid bonuses and 
benefits to partners and employees. 
1, counsel has submitted copies of the following documents: a letter from 
the petitioner's 2001 and 2002 U.S. federal tax returns; the beneficiary's W-2 and MISC-1099 
statements for the years 1998 through 2003; a bank account statement; a business license; copies of various 
precedent cases and AAO decisions as well as other documents. 
In determining the petitioner's ability to pay the proffered wage during a given period, U.S. Citizenship and 
Immigration Services (CIS) will first examine whether the petitioner employed and paid the beneficiary 
during that period. If the petitioner establishes by documentary evidence that it employed the beneficiary at a 
salary equal to or greater than the proffered wage, the evidence will be considered prima facie proof of the 
petitioner's ability to pay the proffered wage. Evidence was submitted to show that the petitioner employed 
the beneficiary. The petitioner paid the beneficiary $22,500.00 in 1998; $15,000.00 and $45,100.00' in 1999; 
$5,000.00 and $45,450.04 in 2000; $25,000.00 in 2001; and, $54,999.96 in 2002. Therefore, for the years 
1998 to 2002, the petitioner did not pay the beneficiary the proffered wage of $94,700.00 per year. 
Alternatively, in determining the petitioner's ability to pay the proffered wage, CIS will examine the net 
income figure reflected on the petitioner's federal income tax return, without consideration of depreciation or 
other expenses. Reliance on federal income tax returns as a basis for determining a petitioner's ability to pay 
the proffered wage is well established by judicial precedent. Elatos Restaurant Corp. v. Sava, 632 F.Supp. 
1049, 1054 (S.D.N.Y. 1986) (citing Tongatapu Woodcraft Hawaii, Ltd. v. Feldman, 736 F.2d 1305 , (9th Cir. 
1984) ); see also Chi-Feng Chang v. Thornburgh, 719 F.Supp. 532 (N.D. Texas 1989); K.C.P. Food Co., Inc. 
v. Sava, 623 F.Supp. 1080 (S.D.N.Y. 1985); Ubeda v. Palmer, 539 F.Supp. 647 (N.D. 111. 1982), affd, 703 
F.2d 571 (7th Cir. 1983). In K.C.P. Food Co., Inc. v. Sava, the court held that the Service had properly relied 
on the petitioner's net income figure, as stated on the petitioner's corporate income tax returns, rather than the 
petitioner's gross income. Supra at 1084. The court specifically rejected the argument that CIS should have 
considered income before expenses were paid rather than net income. Finally, no precedent exists that would 
allow the petitioner to ''add back to net cash the depreciation expense charged for the year." Chi-Feng Chang 
v. Thornburgh, Supra at 537. See also Elatos Restaurant Corp. v. Sava, Supra at 1054. 
The tax returns demonstrated the following financial information concerning the petitioner's ability to pay the 
proffered wage of $94,700.00 per year from the priority date of June 7,2001: 
1 
 W-2 Section 1. There is a deferred compensation amount noted on this statement and other W-2 submitted 
that is not included in the item "wages". 
EAC 03 266 5 1843 
Page 4 
In 2001, the Form 1120 stated taxable income loss2 of <$36,422.00>~. 
In 2002, the Form 1120 stated taxable income of $272,396.00. 
In 2002, the petitioner could pay the proffered wage fiom tax able income. 
If the net income the petitioner demonstrates it had available during that period, if any, added to the wages 
paid to the beneficiary during the period, if any, do not equal the amount of the proffered wage or more, CIS 
will review the petitioner's assets. The petitioner's net current assets can be considered in the determination 
of the ability to pay the proffered wage especially when there is a failure of the petitioner to demonstrate that 
it has taxable income to pay the proffered wage. In the subject case, as set forth above, the petitioner did not 
have taxable income sufficient to pay the proffered wage in 2001 for which the petitioner's tax returns are 
offered for evidence. 
CIS will consider net current assets as an alternative method of demonstrating the ability to pay the proffered 
wage. Net current assets are the difference between the petitioner's current assets and current liabi~ities.~ A 
corporation's year-end current assets are shown on Schedule L, lines 1 through 6. That schedule is included 
with, as in this instance, the petitioner's filing of Form 1120 federal tax return. The petitioner's year-end 
current liabilities are shown on lines 16 through 18. If a corporation's end-of-year net current assets are equal 
to or greater than the proffered wage, the petitioner is expected to be able to pay the proffered wage. 
Examining the Form 1120 U.S. Income Tax Returns submitted by the petitioner, Schedule L found in each of 
those returns indicates the following: 
In 2001, petitioner's Form 1120 return stated current assets of $129,344.00 and $536,486.00 
in current liabilities. Therefore, the petitioner had <$407,142.00> in net current assets. Since 
the proffered wage is $94,700.00 per year, this sum is less than the proffered wage. 
In 2002, petitioner's Form 1120 return stated current assets of $356,941.00 and $671,983.00 
in current liabilities. Therefore, the petitioner had <$315,042.00>~ in net current assets. 
Since the proffered wage is $94,700.00 per year, this sum is less than the proffered wage. 
Therefore, for the period 2001 through 2002 from the date the Form ETA 750 was accepted for processing by 
the U. S. Department of Labor, the petitioner had not established that it had the ability to pay the beneficiary 
the proffered wage at the time of filing through an examination of its net current assets. 
Counsel asserts that the petitioner's 2001 federal tax return states "more than adequate cash flow" that 
evidences the ability to pay the proffered wage. In generally accepted accounting principles (GAAP) based 
cash flow statement the sources of cash are disclosed. The general categories are cash received from 
2 
 IRS Form 1 120, Line 28. 
3 
 The symbols <a number> indicate a negative number, or in the context of a tax return or other financial 
statement, a loss, that is below zero. 
4 
 According to Barron 's Dictionary of Accounting Terms 1 17 (31d ed. 2000), "current assets" consist of items 
having (in most cases) a life of one year or less, such as cash, marketable securities, inventory and prepaid 
expenses. "Current liabilities" are obligations payable (in most cases) within one year, such as accounts 
payable, short-term notes payable, and accrued expenses (such as taxes and salaries). Id. at 1 18. 
5 
 The symbols <a number> indicate a negative number, or in the context of a tax return or other financial 
statement, a loss, that is below zero. 
EAC 03 266 5 1843 
Page 5 
operations, and, investments and borrowings. Other sources of cash can be from the sale of stock or the sale 
of assets. A cash flow statement, used with the balance sheet and income statement, present an analysis of the 
financial health of a business. No balance sheet and income statement are found in the record of proceeding. 
According to regulation,6 copies of annual reports, federal tax returns, or audited financial statements are the 
means by which petitioner's ability to pay is determined. 
Correlating the cash amounts stated in counsel's contention with the petitioner's tax return for each year, it is 
clear that counsel is suggesting combining petitioner's taxable income each year with the cash also received 
by the business for that year as stated on Schedule "L" as current assets. CIS will consider separately the 
taxable income and the net current assets of a business to determine the ability of a petitioner to pay the 
proffered wage on the priority date. To do so would be duplicative of petitioner's taxable income. Also, on 
Schedule "L" it is the net current asset figure that is important as calculated above. Again, counsel is 
disregarding the use of Schedule "L", that it as a balance sheet that shows both current assets and current 
liabilities. Therefore, the cash and other current assets are reduced as is calculated above to reach the net 
current asset figure. 
Counsel advocates the use of the cash balance of the petitioner's business account to show the ability to pay 
the proffered wage. Counsel's reliance on the balances in the petitioner's bank account is misplaced. First, 
bank statements are not among the three types of evidence, enumerated in 8 C.F.R. 8 204.5(g)(2), required to 
illustrate a petitioner's ability to pay a proffered wage. While this regulation allows additional material "in 
appropriate cases," the petitioner in thls case has not demonstrated why the documentation specified at 8 C.F.R. $ 
204.5(g)(2) is inapplicable or otherwise paints an inaccurate financial picture of the petitioner. Second, bank 
statements show the amount in an account on a gven date, and cannot show the sustainable ability to pay a 
proffered wage. Third, no evidence was submitted to demonstrate that the funds reported on the petitioner's bank 
statements somehow reflect additional available hds that were not reflected on its tax return, such as the cash 
specified on Schedule L that will be considered below in determining the petitioner's net current assets. 
Although CIS will not consider gross income without also considering the expenses that were incurred to 
generate that income, the overall magnitude of the entity's business activities should be considered when the 
entity's ability to pay is marginal or borderline. See Matter of Sonegawa, 12 I&N Dec. 612 (Reg. Comm. 
1967). 
In the present case, the petitioner is a private equity investment or venture capital corporation firm that had 
been in business in 1998 at the time the Form ETA 750 was filed. The petitioner had $2,902,864.00 in 
management fees and related receipts and paid out $55 1,000.00 in wages and salaries during 2001 as well as 
about $1.46 Million in officer's compensation, the year in which the priority date was established. The 
petitioner stated that it employed a total of 9 employees in 2003. 
Finally, the Immigrant Petition for Alien Worker (Form 1-140) indicated that the proffered position was a new 
position, thereby implying that the beneficiary would not be replacing a previously hired employee. A review 
of the record confirms that the job offer is realistic and can be satisfied by the petitioner. See Matter of Great 
Wall, 16 I&N Dec. 142 (Acting Reg. Comrn. 1977). 
Although CIS will not consider gross income without also considering the expenses that were incurred to 
generate that income, the overall magnitude of the entity's business activities should be considered when the 
entity's ability to pay is marginal or borderline. See Matter of Sonegawa, 12 I&N Dec. 612 (Reg. Comm. 
8 C.F.R. 8 204.5(g)(2). 
EAC 03 266 5 1843 
Page 6 
1967). Its gross income has always been above $1 million and it pays salaries and wages each year of 
$367,00.00 to $551,00.00. The compensation of officers was $1,458,500.00 in 2001 and $1,136,500.00 in 
2002. The amount of officer compensation is greater than the proffered wage (i.e. $94,700.00 per year) in all 
of the pertinent years. It is credible to believe that the officer compensation could've been adjusted to pay the 
wage. Thus, assessing the totality of circumstances in this individual case, it is concluded that the petitioner 
has proven its financial strength and viability and has the ability to pay the proffered wage. 
By the evidence presented, the petitioner has proven its ability to pay the proffered wage. The evidence 
submitted does establish that the petitioner had the continuing ability to pay the proffered wage beginning on 
the priority date. 
The burden of proof in these proceedings rests solely with the petitioner. Section 291 of the Act, 8 U.S.C. 
tj 1361. The petitioner has met that burden. 
ORDER: The appeal is sustained.