dismissed L-1A Case: Clothing Business

U.S. Department of Homeland Security 
20 Massachusetts Ave., N.W., Rm. A3042 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
FILE: WAC 03 178 52287 Office: CALIFORNIA SERVICE CENTER Date: ,)UN () 9 ?M)5 
PETITION: Petition for a Nonimrnigrant Worker Pursuant to Section 101(a)(15)(L) of the Immigration 
and Nationality Act, 8 U.S.C. 5 1101(a)(15)(L) 
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 
ministrative Appeals Office 
WAC 03 178 52287 
Page 2 
DISCUSSION: The nonimmigrant visa petition was denied by the Director, California Service Center. The 
matter is now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed. 
According to the documentary evidence contained in the record, the petitioner was incorporated in 2003 and 
claims to be an import, export, wholesale, and retail clothing business. The petitioner claims to be a 
subsidiary of LaLa Plan International Hong Kong. The petitioner seeks to employ the beneficiary temporarily 
in the United States as vice president of its new office for a period of three years, at a yearly salary of 
$100,000.00. The director determined that the petitioner had failed to submit sufficient evidence to establish 
that a qualifying relationship exists between the U.S. and foreign entities. 
On appeal, counsel asserts that sufficient evidence has been submitted to establish the existence of a 
qualifying relationship between the U.S. and foreign entities. 
To establish L-1 eligibility under section 101(a)(15)(L) of the Immigration and Nationality Act (the Act), 
8 U.S.C. 8 1101(a)(15)(L), the petitioner must demonstrate that the beneficiary, within three years preceding 
the beneficiary's application for admission into the United States, has been employed abroad in a qualifying 
managerial or executive capacity, or in a capacity involving specialized knowledge, for one continuous year 
by a qualifying organization, and seeks to enter the United States temporarily in order to continue to render 
his or her services to the same employer, or a subsidiary or affiliate thereof, in a capacity that is managerial, 
executive, or involves specialized knowledge. 
The regulation at 8 C.F.R. 5 214.2(1)(l)(ii) states, in part: 
lntracornpany transferee means an alien who, within three years preceding the time of his or her 
application for admission into the Unite States, has been employed abroad continuously for one 
year by a fm or corporation or other legal entity or parent, branch, affiliate, or subsidiary 
thereof, and who seeks to enter the United States temporarily in order to render his or her 
services to a branch of the same employer or a parent, affiliate, or subsidiary thereof in a capacity 
that is managerial, executive, or involves specialized knowledge. 
The regulation at 8 C.F.R. $214.2(1)(3) states that an individual petition filed on Form 1-129 shall be 
accompanied by: 
(i) Evidence that the petitioner and the organization which employed or will employ the 
alien are qualifying organizations as defined in paragraph (l)(l)(ii)(G) of this 
section. 
(ii) Evidence that the alien will be employed in an executive, managerial, or 
specialized knowledge capacity, including a detailed description of the services to be 
performed. 
(iii) Evidence that the alien has at least one continuous year of full-time employment 
abroad with a qualifying organization with the three years preceding the filing of the 
petition. 
(iv) Evidence that the alien's prior year of employment abroad was in a position that was 
managerial, executive or involved specialized knowledge and that the alien's prior 
WAC 03 178 52287 
Page 3 
education, training, and employment qualifies hirnlher to perform the intended 
serves in the United States; however, the work in the United States need not be the 
same work which the alien performed abroad. 
The regulation at 8 C.F.R. 9 214.2(1)(3)(v) states that if the petition indicates that the beneficiary is coming to 
the United States as a manager or executive to open or to be employed in a new office in the United States, the 
petitioner shall submit evidence that: 
(A) Sufficient physical premises to house the new office have been secured; 
(B) The beneficiary has been employed for one continuous year in the three year period 
preceding the filing of the petition in an executive or managerial capacity and that the 
proposed employment involved executive or managerial authority over the new 
operation; and 
(C) The intended United States operation, within one year of the approval of the petition, 
will support an executive or managerial position as defined in paragraphs (l)(l)(ii)(B) or 
(C) of this section, supported by information regarding: 
(1) The proposed nature of the office describing the scope of the entity, its 
organizational structure, and its financial goals; 
(2) The size of the United States investment and the financial ability of the 
foreign entity to remunerate the beneficiary and to commence doing 
business in the United States; and 
(3) The organizational structure of the foreign entity. 
The issue to be addressed in this proceeding is whether a qualifying relationship exists between the U.S. and 
foreign entities. 
The regulations at 8 C.F.R. 9 214.2(1)(l)(ii)(G) state: 
QuaIljSiing organization means a United States or foreign firm, corporation, or other legal 
entity which: 
(1) Meets exactly one of the qualifying relationships specified in the 
definitions of a parent, branch, affiliate or subsidiary specified in 
paragraph (I)(l)(ii) of this section; 
(2) Is or will be doing business (engaging in international trade is not 
required) as an employer in the United States and in at least one other 
country directly or through a parent, branch, affiliate, or subsidiary for 
the duration of the alien's stay in the United States as an intracompany 
transferee; and 
WAC 03 178 52287 
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(3) Otherwise meets the requirements of section lOl(a)(15)(L) of the 
Act. 
The regulations at 8 C.F.R. $5 214.2(1)(l)(ii) define, in pertinent part, "parent," "branch," "subsidiary," and 
"affiliate" as: 
(I) Parent means a finn, corporation, or other legal entity which has subsidiaries. 
(J) Branch means an operation division or office of the same organization housed in a 
different location. 
(K) Subsidiary means a firm, corporation, or other legal entity of which a parent owns, 
directly or indirectly, more than half of the entity and controls the entity; or owns, 
directly or indirectly, half of the entity and controls the entity; or owns, directly or 
indirectly, 50 percent of a 50-50 joint venture and has equal control and veto power 
over the entity; or owns, directly or indirectly, less than half of the entity, but in fact 
controls the entity. 
(L) Afiliate means 
(1) One of two subsidiaries both of which are owned and controlled by the same parent 
or individual. or 
(2) One of two legal entities owned and controlled by the same group of individuals, 
each individual owning and controlling approximately the same share or proportion 
of each entity. 
In the instant matter, the petitioner claims to be a subsidiary of the foreign entity. The petitioner submitted 
copies of the U.S. entity's Articles of Incorporation, stock certificates, stock ledger, statement of information, 
notice of transaction, bank statement, wire transfer confirmation, and minutes from the U.S. entity's board 
meeting. The petitioner also submitted copies of the Japanese entity's shareholder information and th 
ompany registry. tax return, and Business Registration Certificate. 
The stock distribution for the U.S. and foreign entities read as follows: 
U.S. ENTITY FOREIGN ENTITY 
Shareholders % of Shares Shareholders % of Shares 
Takeki Komatsu 56% 
Michiyo Komatsu 9% 
Taihei Komatsu 7% 
Mikio Komatsu 7% 
Daisaku Komatsu 7% 
Kiyoko Komatsu 14% 
Takeki Komatsu 35% 
Michiyo Komatsu 10% 
Taihei Komatsu 10% 
Mikio Komatsu 10% 
Diasaku Komatsu 10% 
Kiyoko Komatsu 20% 
Naomi Kawanishi 5% 
WAC 03 178 52287 
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The director denied the petition stating that the evidence was insufficient to demonstrate that a parent- 
subsidiary or affiliate relationship existed between the U.S. and foreign entities. The director noted that seven 
(7) individuals owned the U.S. entity, while six (6) individuals owned the foreign entity. The director stated 
that the stock records failed to support a finding that both organizations were owned and controlled by the 
same parent, or individual, or by an identical group of individuals who each owned and controlled 
approximately the same share or portion of each organization. The director also noted that the evidence failed 
to show that an individual, or identical group of individuals had effective de jure or de facto control over both 
entities. The director further noted that no voting proxies or other agreements had been made a part of the 
record demonstrating that a degree of control over both entities had been relinquished by any one shareholder, 
in favor of a mutual shareholder. The director concluded by stating that common control of the two entities 
must be evident even though significant commonality of ownership may be demonstrated. 
On appeal, counsel disagrees with the director's decision and his wife, and 
his three sons own the Japanese company. Counsel also contends 
own 86 percent of the ercent of the Hong 
with the shares held by 95 percent of the U.S. entity is owned by the Hong Kong parent 
company or by the Counsel further asserts: 
The same group of individuals (although family members) own 95% of the U.S. subsidiary, 
and even in the strictest sense, the same group of individuals with the same proportion of the 
shares holding as the parent company share, own 62.5941, which is more than 5 1%. of the U.S. 
subsidiary. Therefore, it satisfies the requirement to be considered as an "affiliate" . . . . 
Counsel contends that althoug controls the foreign and U.S. entities, by "objective 
observation" one could also fin y owns more than half of and controls the U.S. entity. 
Counsel further contends that the record demonstrates the U.S. and foreign entities are owned and controlled 
by the same parent or group of individuals. 
The petitioner has not submitted sufficient evidence to establish that a qualifying relationship exists between 
the U.S. and foreign entities. The regulations and case law confirm that ownership and control are the factors 
that must be examined in determining whether a qualifying relationship exists between U.S. and foreign 
entities for purposes of a nonimmigrant visa petition. Matter of Siemens Medical Systems, lnc., 19 I&N Dec. 
362 (Comrn. 1986); Matter of Hughes, 18 I&N Dec. 289 (Comm. 1982); see also Matter of Church 
Scientology lnter?zational, 19 I&N Dec. 593, 604 (Comm. 1988) (in immigrant visa proceedings). In the 
context of this visa petition, 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 of Church Scientology 
International, supra. 
Evidence of record fails to demonstrate that the U.S. entity owns. directly or indirectly, more than half of the 
foreign entity and controls the entity; or owns, directly or indirectly, half of the entity and controls the entity; 
or owns, directly or indirectly, less than half of the entity, but in fact controls the entity. The evidence shows 
that seven individuals own shares in the U.S. entity's stock while only six individuals own stock in the foreign - 
el claims that the petitioning company and the overseas company are majority owned 
wife, and his three sons due to the familial relationship, this familial relationship does 
relationship under the regulations. Matter of Hughes, supra. 
WAC 03 178 52287 
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In visa petition proceedings, the burden of proving eligibility for the benefit sought remains entirely with the 
petitioner. Section 291 of the Act, 8 U.S.C. 9 1361. The petitioner has not sustained that burden. 
ORDER: The appeal is dismissed.