dismissed L-1A Case: Furniture

MATTER OF U-F-, LLC 
Non-Precedent Decision of the 
Administrative Appeals Office 
DATE: JAN. 9, 2019 
APPEAL OF CALIFORNIA SERVICE CENTER DECISION 
PETITION: FORM 1-129, PETITION FOR A NONIMMIGRANT WORKER 
The Petitioner, a furniture store, seeks to continue the Beneficiary's temporary employment as its 
commercial director under the L-1 A nonimmigrant classification for intracompany transferees. 
Immigration and Nationality Act (the Act) section 10l(a)(l5)(L), 8 U.S.C. § l 10l(a)(l5)(L). The L-lA 
classification allows a corporation or other legal entity (including its affiliate or subsidiary) to transfer a 
qualifying foreign employee to the United States to work temporarily in a managerial or executive 
capacity. 
The Director of the California Service Center denied the petition, concluding that the record did not 
establish, as required, that the Petitioner has a qualifying relationship with the Beneficiary's foreign 
employer. 
The matter is now before us on appeal. On appeal, the Petitioner submits statements from its two 
owners, and asserts that the Director erred by imposing "an overly narrow reading of the law," and 
by disregarding the "marital unit" that holds a controlling interest in both companies. 
Upon de nova review, we will dismiss the appeal. 
To establish eligibility for the L-1 A nonimmigrant visa classification, a qualifying organization must 
have employed the beneficiary "in a capacity that is managerial, executive, or involves specialized 
knowledge," for one continuous year within three years preceding the beneficiary's application for 
admission into the United States. Section 10l(a)(l5)(L) of the Act. 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 Director denied the petition based on a finding that the Petitioner did not establish that it has a 
qualifying relationship with the Beneficiary's foreign employer. 
To establish a "qualifying relationship" under the Act and the regulations, a petitioner must show 
that the beneficiary's foreign employer and the proposed U.S. employer are the same employer, or 
related as a "parent and subsidiary" or as "affiliates." See generally section 101(a)(l5)(L) of the 
Act; 8 C.F.R. § 214.2(1). The Petitioner asserts that the U.S. and foreign employer are affiliates. 
The relevant regulatory definition of "affiliate" is "one of two legal entities owned and controlled by 
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Matter of U-F-, LLC 
the same group of individuals, each individual owning and controlling approximately the same share 
or proportion of each entity." 8 C.F.R. § 214.2(1)(1 )(ii)(L)(2). 
The regulation and case law confirm that ownership and control are the factors that must be 
examined in determining whether a qualifying relationship exists between United States and foreign 
entities for purposes of this visa classification. See Matter o,lChurch Scientology Int'!, 19 I&N Dec. 
593 (BIA 1988); see also Matter o.lSiemens Med. Syss., Inc., 19 I&N Dec. 362 (BIA 1986); Matter 
o.l Hughes, 18 I&N Dec. 289 (Comm'r. 1982). 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 <~lChurch Scientology Int'/, 19 I&N 
Dec. at 595. Control may be "dejure" by reason of ownership of 51 percent of outstanding stocks of 
the other entity or it may be "de facto" by reason of control of voting shares through partial 
ownership and possession of proxy votes. Matter o.l Hughes, 18 I&N Dec. at 293. 
The Petitioner claims to be an affiliate of 
record shows the ownership of 
Owner 
The Beneficiary 
The Beneficiary's spouse 
The Beneficiary's father 
and the petitioning entity as follows: 
40% 
40% 
20% 
Petitioner 
50% 
50% 
in Mexico. The 
The Director denied the petition based on the different ownership structures. The Director found 
that the Beneficiary and her spouse each have "negative control" over the petitioning U.S. entity, due 
to their 50/50 ownership. But no one owns a controlling share 
of the foreign entity, • 
On appeal, the Petitioner asserts that the regulatory definition of "affiliate" "does not [prohibit] 
indirect ownership of affiliates . . . or [require] that the exact same individuals must own the 
entities." The Petitioner contends that a qualifying relationship exists because the Beneficiary and 
her spouse collectively own all of the petitioning entity and most of the foreign entity, and that the 
regulatory definition of "affiliate" "does not require that the exact same individuals own the 
entities." 
The regulation requires two affiliates to be "owned and controlled by the same group of individuals, 
each individual owning and controlling approximately the same share or proportion of each entity." 
The lack of the word "exactly" in that definition does not, as counsel claims, leave room for the 
present situation. The Beneficiary and her spouse are not "the same group of individuals" who own 
they are, instead, a subset of that group. Furthermore, the Beneficiary and her spouse do not 
own and control "approximately the same share or proportion of each entity." A 50% interest, with 
equal voting power , grants negative control over a company ; a 40% interest does not. 
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Matter of U-F-, LLC 
Citing Sun Moon Star Advanced Power, Inc, v. Chappel, 773 F. Supp. 1373 (N.D. Cal 1990), the 
Petitioner asserts that two companies may be affiliated even though they are not owned by the exact 
same individuals. In Sun Moon Star, former Immigration and Naturalization Service (INS), now 
U.S. Citizenship and Immigration Services (USCIS), refused to recognize the indirect ownership of 
the petitioner by three brothers owning shares of the company as individuals through a holding 
company. The decision stated that the two claimed affiliates were not owned by the same group of 
individuals. The court found that the INS decision was inconsistent with previous interpretations of 
the term "affiliate" and contrary to congressional intent because the decision did not recognize 
indirect ownership. Prior to the adjudication of the Sun Moon Star petition, INS amended the 
regulations so that the definition of "subsidiary" recognized indirect ownership. 52 Fed. Reg. 5738, 
5741-2 (Feb. 26, 1987). Accordingly, the basis for the court's decision has been incorporated into 
the regulations. However, despite the amended regulation and the decision in Sun Moon Star, 
neither former INS nor USCIS has ever accepted a combination of individual shareholders as a 
single entity, so that the group may claim majority ownership, unless the group members have been 
shown to be legally bound together as a unit within the company by voting agreements or proxies. 
In this case the U.S. entity has two owners, and the foreign entity has three. The Petitioner cannot 
establish that the same individuals control both entities without documentary evidence such as 
voting proxies or agreements to vote in concert. The Petitioner claims that such an agreement exists. 
In new statements, the Beneficiary and her spouse assert that, since 2008, they have had an "oral 
agreement ... to make all business decisions together as a marital unit." The record, however, 
contains no evidence that this agreement was in force before the filing of the appeal, and the 
Petitioner has not established that the newly-disclosed "oral agreement" was binding within the 
jurisdiction where operates. 
The Petitioner has not shown that the same individuals own and control both and the 
petitioning U.S. entity. Based on the evidence submitted, the Petitioner has not established that it 
has a qualifying relationship with the Beneficiary's foreign employer. 
ORDER: The appeal is dismissed. 
Cite as Matter of U-F-, LLC, ID# 2045071 (AAO Jan. 9, 2019) 
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