dismissed L-1A Case: Business Investment

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·u.s. Citizenship 
and Immigrati,0n 
Services 
MATTER OF K-G-, LLC 
APPEAL OF VERMONT SERVICE CENTER DECISION 
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Non-Precedent Decision of the 
Administrative Appeals Office 
DATE: JAN. 23, 2019 
PETITION: FORM 1-129, PETITION .FOR A NONIMMIGRANT WORKER 
The Petitioner, which owns a Car Care Center franchise and invests in other businesses, 
seeks to continue the Beneficiary's temporary employment as its president under the L-1 A 
nonimrnigrant classification for intracompany transferees. 1 Immigration and Nationality Act (the Act) 
section 1 0l(a)(l 5)(L), 8 U.S.C. § l 10l(a)(l 5)(L). The L-1 A classification allows a corporation or other 
legal entity (including its affiliate or su~sidiary) to transfer a qualifying foreign employee to the United 
~tates to work temporarily, in a managerial or executive capacity. 
The Director of the Vermont Service Center denied the petition, concluding that the record did not 
establish, as required, that the Petitioner will employ the Beneficiary in the United States in a 
managerial or executiv~ capacity. 
The matter is now before us on appeal. · In its appeal, the Petitioner asserts that the Director erred by 
disregarding "key material evidence" and making unwarranted assumptions about the operation of a 
franchise. 
Upon de nova review, we will dismiss the appeal. 
I. LEGAL FRAMEWORK 
· To establish eligibility for the L-1 A nonimmigrant visa classification , a qualifying organization must 
have employed the beneficiary in a managerial or executive capacity for one continuous year within 
three years preceding the beneficiary's application for admission into the United States. 8 C.F.R . 
§ 214.2(l)(J)(v)(B). In addition, the beneficiary must seek to enter the United States temporarily to 
continue rendering his or her services to the same employer or a subsidiary or. affiliate thereof in a 
managerial or executive capacity. Id. · 
. ' The Petitioner previously filed a "new office " petition on the Beneficiary ' s behalf which was ~pproved for the period 
from September I, 2016 until August 31 , 2017 . A "new office " is an organization that has been doing business in the 
. United States through a parent , branch , affiliate , or subsidiary for less than one year. 8 C.F.R. § 214 .2(l)(l)(ii)(F) . The 
regulation at 8 C .F.R. § 214 .2(1)(3)(v)(C) allows a "new office " operation one year wi.thin the date of approval of the 
petition to support an executive or managerial position. 
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Matter of K-G-, LLC 
A petitioner seeking to extend an L-1 A petition that involved a new office must submit a statement 
of the beneficiary's duties during the previous year and under the extended petition; a statement 
. describing the staffing of the new operation and evidence of the numbers and types of positions held; 
' evidence of its financial status; evidence that it has been doing business for the 'previous year; and. 
evidence that it -maintains a qualifying relationship with the beneficiary's foreign employer. 
8 C.F.R. § 214.2(1)(14)(ii). 
II. U.S. EMPLOYMENT IN AN EXECUTIVE CAPACITY 
(_ 
The Director denied the petition b,ased on a finding that the Petitioner did not establish that it will 
employ the Beneficiary in a managerial or executive capacity under the extended petition. The 
Petitioner specifies that it seeks to employ the Beneficiary in an executive capacity, and therefore we 
need not .discuss the requirements of a managerial capacity. 
"Executive capacity" means an assignment within an organization in which the employee primarily 
directs the management of the organization or a major component or function of the organization; 
establishes the goals and policies of the organization, component , or function; exercises wide 
latitude in discretionary decision-making; and receives only general . supervision or direction from 
higher-level executives , the board of directors, or stockholders of the organization. Section 
10l(a)(44)(B) of the Act. 
< Based on the statutory definition of executive capacity, the Petitioner must first show that the 
Beneficiary will perform certain high-level responsibilities. Champion World, Inc. ·v. INS, 940 F.2d 
1533 (9th Cir. 1991) (unpublished table decision) . Second , the Petitioner must prove that the 
Beneficiary will be primarily engaged in executive duties, as opposed to ordinary operational 
activities alongside the Petitioner's other employees. See F'amily Inc. v. USCIS, 469 F.3d 1313, 
1316 (9th Cir. 2006); Champion World, 940 F.2d 1533. 
In the denial decision, the Director cited the vagueness of the job description, inadequate staffing , 
and the lack of evidence that the Petitioner was conducting any business activity at the time it filed 
the extension petition. Because the third factor is dispositive, we need not discuss the stafiing and 
job description in detail. 
On the petition form, under "Type of Business," the Petitioner described itself as an "Investment 
Business and Automotive Service Company" with five employees. In addition to the 
franchise , which the Petitioner purchased in April 2017, the Petitioner indicated that it had also 
identified other business opportunities, including its March 2017 acquisition of a 1/3 stake in 
"an online stock trading and education platfonn "; "negotiations to acquire a 50% stake in 
a retailstore"; and "active discussions to acquire a franchise." In later submissions, the 
Petitioner identified more such ventures as well as real estate investments. When the Petitioner filed the 
extension petition in August 2017, however , these other business ventures were not both ( 1) operational 
and (2) under the Beneficiary 's executive control. The Petitioner must establish eligibility at the time of 
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Matter of K-G-. LLC 
filing. See 8 C.F.R. § 103.2(b)(l). We can take some near-term growth plans under consideration in 
the initial filing of a new office petition, but not in subsequent filings to extend that petition. 
At the time of filing, the Petitioner had not yet purchased any interest in the or 
businesses. The Petitioner had previously acquired a minority equity stake in in March 
2017, but the Petitioner did not establish or claim that it had control over that business. (In subsequent 
submissions, the Petition~r described its future plans to purchase additional equity in order to secure a 
controlling interest.) Partial ownership without control does not establish the required qualifying 
relationship between ___ and th~ Beneficiary's foreign employer.2 
The franchise is the' only business that the Petitioner owned and controlled at the time it 
filed the petition. In a letter submitted with _the petition, the Petitioner stated that it purchased the 
franchise in April 2017, but that "operations of the franchise ... have been 
significantly delayed" by factors including "stringent requirements provided by the 
franchise regarding personnel requirements, hiring protocols · and other highly detailed site and 
equipment specifications ." Subsequent correspondence from December 2017, several months after 
the filing date, indicated that the franchise still had not yet opened for business owing to "various 
unexpected delays and complications." 
At the time of filing, the Petitioner employed four people subordinate to the Beneficiary: 
• General Manager 
• Manager 
• Customer Service Assistant 
• Assistant & Administrative Support 
The job descriptions for these subordinates focused on what they will 'do once the business is 
operational. The descriptions did not show that tl1e employees were engaged in the support of an 
operational business ·at the time of filing. . 
The P~tition~r also stated that it planned to hire additional mechanics, and the Petitioner provided the 
names of a lead mechanic and an operation/service manager "to be hired within the coming weeks." At 
the time of filing, however , the positions were vacant and had never previously been filled. When the 
Petitioner filed the petition, its franchise had no mechanics on staff and therefore was not able 
to provide automobile service. 
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2 Ownership and control, together, detennine whether a qualifying relation~hip exists between United States and foreign 
entities. See. e.g., Mattei· of Church Scientology Int'/, 19 l&N Dec. 593 (Comm'r 1988); Maller o(Si emen.1· Med. Sys., 
Inc., 19 l&N Dec. 362 (Comm'r 1986); Matter o,(Hughes , 18 l&N Dec. 289 (Comm'r 1982). Ownership refers to the 
, direct or indirect legal right of possession of the assets of an entity with full power and authority to control; control 
means the direct or indirect legal right and authority to direct the establishment, management, and operations of an 
entity. Matter o,( Church Scientolo gy Int '/, 19 l&N Dec. at 595. 
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Matter of K-G-, LLC 
The Petitioner asked the Director to "consider the greater picture" of the company's acquisition 
activities rather than "assess the Beneficiary's current and proposed executive duties solely through the 
lens of a franchise operation." At the time of filing, however, the Petitioner did not own a 
controlling interest in any other business. 
Although the franchise had not yet opened at the time of filing, the Petitioner asserted that its 
staffing was sufficient for "an investment company that' ... is already engaged in the identification and 
acquisition of a portfolio of various commercial ventures and active investment undertakings." A 
company engaged solely in acquisition 'is not yet engaged in the regular, systematic, and continuous 
provision of goods, services, or both. The Petitioner stated that its "foundation and purpose ... [is] to 
seek out multiple businesses to acquire; operate and generate profit." When it filed the petition, the 
Petitioner had begun acquiring businesses, but was not yet o·perating them or generating profit. The 
Petitioner did not show that its staffing was sufficient for revenue-generating activities such as 
providing automobile repair services. 
When a new business is first established and commences operations, the regulations recognize that a 
designated executive responsible; for setting up operations will be engaged in a variety of low-level 
activities not normally performed by employees at the executive or managerial level and that often 
the full range of executive responsibility cannot be performed in that first year. The "new office" 
regulations allow a newly established petitioner one year to develop to a point that it can support the 
employment of a beneficiary in a primarily executive position. 
Accordingly, if a petitioner indicates that a beneficiary is coming to the United States to open a "new 
office," it must show that it is prepared to commence doing business immediately upon approval so 
that it will support an executive within the one-year timeframe. This evidence should demonstrate a 
realistic expectation that the enterprise will succeed and rapidly expand as it moves away from the 
developmental stage to full operations, where there would be an actual need for an executive who 
will primarily perform qualifying duties. See generally 8 C.F.R. § 214.2(1)(3)(v). 
After this initial one-year period, a petitioner seeking to extend the petition must demonstrate that 
the new office is doing business. See 8 C.F.R. § 214.2(1)(7)(i)(A)(3) and (14)(ii)(B). A petitioner 
must meet all eligibility requirements at the time of filing the petition. Therefore, the Petitioner in 
this proceeding cannot establish eligibility for the extension unless it can show that it was already 
engaged in the regular, systematic, and continuous provision of goods or services when it filed the 
extension petition in August 2017. 
In its introductory statement , the Petitioner claimed that "the U.S. company has been continuously 
engaged in ·active business ," but the activities described in the letter concerned preparations to do 
business rather than actually doing business . The Petitioner acknowledged that the 
business component has yet to become fully operational," but the Petitioner asserted that the 
business was "undergoing final renovations" and anticipated "opening for active service _in the 
comillg weeks ." The Petitioner stated that it had already completed "facilities acquisition ~ build-out 
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Matter of K-G-, ~LC 
and .... the recruitment and hiring of personnel," but none of these preparatory activities entail the 
regular, systematic, and continuous provision of goods or services. 
In the denial riotice, the Director stated that "at the time of filing the instant petition, it appeared the 
center ha[ d] not opened yet." On appeal, the Petitioner does not contest this conclusion. 
Instead, the Petitioner asks the Director to "grant the extension for only one year," which is the 
period granted for a new office, rather than the thre_e years originally requested. A new office 
petition is subject to more lenient requirements than those for other L-1 A nonimmigrant petitions. 
For a given beneficiary working for a given petitioner, the regulations expressly pro":;ide for only one 
year of L-1 A status under these "new office" conditions. After that one year, a petition extension is 
available only if the petitioner is doing business as the regulations define that term. 8 C.F.R. 
§ 214.2(1)(7)(i)(A)(3). New office status ·is contingent on progress towards fully establishing a 
1functioning business within one year. If, at the end of that year, the new office has not made that 
progress, then this deficiency is grounds for ending the immigration benefit, not extending it. · 
Because the Petitioner was not yet doing business in August 20 I 7, after a year under "new office" 
conditions, it was not prepared to employ the Beneficiary in an executive capacity at the time of filing. 
The Petitioner asserted that the Beneficiary "will also continue to exercise significant executive 
authority in and with regard to [the parent entity's] operations in India." The Petitioner, however, did 
not show that the foreign-entity conducts any business in the United States, or that there is any active, 
functional connection between the day-to-day operations of the Petitioner and its foreign parent 
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company. The Beneficiary's claimed executive authority over a foreign company that does not do 
business in the United States cannot serve as a basis for L-1 A nonimmigrant status. 
III. CONCLUSION 
The Petitioner was not yet doing business at the end of its year as a new office, and therefore it was 
not yet employing or prepared to employ the Beneficiary in an ex~cutive capacity at the time it filed 
the instant petition. 
ORDER: The appeal is dismissed. 
Cite as Matter of K-G-. LLC, ID# 1944551 (AAO Jan. 23, 2019) · 
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