dismissed L-1A Case: Furniture Trade

U.S. Department of Homeland Security 
20 Mass. Ave, N.W., Rm. A3042 
Washington, DC 20529 
U.S. Citizenship 
and Immigration 
Services 
File: WAC 03 174 50242 Office: CALIFORNIA SERVICE CENTER Date: MAY 1 1 2@5 
Petition: Petition for a Nonimmigrant Worker Pursuant to Section 101(a)(15)(L) of the Immigration 
and Nationality Act, 8 U.S.C. $ 1101(a)(15)(L) 
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. 
Administrative Appeals Office 
WAC 03 174 50242 
Page 2 
DISCUSSION: The Director, California Service Center, denied the petition for a nonimmigrant visa. The 
matter is now before the Administrative Appeals Office (AAO) on appeal. The AAO will dismiss the appeal. 
The petitioner filed this nonimmigrant petition seeking to extend the employment of its president and chief 
executive officer as an L-1A nonimmigrant intracompany transferee pursuant to section 101(a)(15)(L) of the 
Immigration and Nationality Act (the Act), 8 U.S.C. $ 1101(a)(15)(L). The petitioner is a corporation 
organized in the State of California that is engaged in the international trade of furniture. The petitioner 
claims that it is the subsidiary of Hebei Lihua Import & Export Company, Ltd., located in Hebei, China. The 
beneficiary was initially granted a one-year period of stay to open a new office in the United States, and the 
petitioner now seeks to extend the beneficiary's stay for an additional three years. 
The director denied the petition, determining that the petitioner had failed to establish that the petitioner and 
the organization which employed the beneficiary in China were qualifying organizations. 
The petitioner subsequently filed an appeal. The director declined to treat the appeal as a motion and 
forwarded the appeal to the AAO for review. On appeal, the petitioner submits a letter and additional 
evidence which seeks to clarify the petitioner's relationship with the foreign entity. Specifically, counsel for 
the petitioner alleges that the director misinterpreted the information contained in the petitioner's 2002 tax 
return, and submits an additional copy of the return for review. 
To establish eligibility for the L-1 nonimmigrant visa classification, the petitioner must meet the criteria 
outlined in section 101(a)(15)(L) of the Act. Specifically, a qualifying organization must have employed the 
beneficiary in a qualifying managerial or executive capacity, or in a specialized knowledge capacity, for one 
continuous year within three years preceding the beneficiary's application for admission into the United 
States. 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, executive, or 
specialized knowledge capacity. 
The regulation at 8 C.F.R. 3 214.2(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 within 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 education, 
WAC 03 174 50242 
Page 3 
I 
training, and employment qualifies hirnlher to perform the intended services 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. 5 214.2(1)(14)(ii) also provides that a visa petition, which involved the opening of a 
new office, may be extended by filing a new Form 1-129, accompanied by the following: 
(a) Evidence that the United States and foreign entities are still qualifying organizations 
as defined in paragraph (l)(l)(ii)(G) of this section; 
(b) Evidence that the United States entity has been doing business as defined in 
paragraph (l)(l)(ii)(H) of this section for the previous year; 
(c) A statement of the duties performed by the beneficiary for the previous year and the 
duties the beneficiary will perform under the extended petition; 
(d) A statement describing the staffing of the new operation, including the number of 
employees and types of positions held accompanied by evidence of wages paid to employees 
when the beneficiary will be employed in a management or executive capacity; and 
(e) Evidence of the financial status of the United States operation. 
The primary issue in the present matter is whether the petitioner and the foreign organization are qualifying 
organizations as defined by 8 C.F.R. 5 214.2(1)(l)(ii)(G). The regulation defines the term "qualifying 
organization" as a United States or foreign firm, corporation, or other legal entity which: 
(I) Meets exactly one of the qualifying relationships specified in the definitions of a parent, 
branch, affiliate or subsidiary specified in paragraph (l)(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 
(3) Otherwise meets the requirements of section lOl(a)(15)(L) of the Act. 
Additionally, the regulation at 8 C.F.R. 5 214.2(1)(l)(ii) provides: 
(I) "Parent" means a firm, corporation, or other legal entity which has subsidiaries. 
(J) "Branch" means an operating division or office of the same organization housed in a different 
location. 
WAC 03 174 50242 
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(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) "Affiliate" 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, or 
(3) In the case of a partnership that is organized in the United States to provide 
accounting services along with managerial andfor consulting services and that 
markets its accounting services under an internationally recognized name under an 
agreement with a worldwide coordinating organization that is owned and controlled 
by the member accounting firms, a partnership (or similar organization) that is 
organized outside the United States to provide accounting services shall be 
considered to be an affiliate of the United States partnership if it markets its 
accounting services under the same internationally recognized name under the 
agreement with the worldwide coordinating organization of which the United States 
partnership is also a member. 
In this case, the petitioner claims that the U.S. entity is the subsidiary of the Chinese entity. Specifically, the 
petitioner asserts that the Chinese entity owns 80% of the U.S. entity, with the additional 20% divided equally 
among With the initial petition, the petitioner provided copies of 
stock certificates evidencing the above ownership percentages, as well as the petitioner's Form 1120, U.S. 
Corporation Tax Return, for its 2002 tax year. The 2002 return indicated on Schedule K, line 5, that the 
beneficiary, and not the Chinese entity, owned 80% of the U.S. petitioner. In addition, on line 4, the 
petitioner affirmatively indicated that it was not a subsidiary in an affiliated group or a parent-subsidiary 
controlled group. Further, on line 7, the petitioner did not indicate that it was filing a Form 5472, Information 
Return of a 25% Foreign-Owned U.S. Corporation. 
On June 19, 2003, the director requested additional evidence pertaining to the qualifying relationship between 
the petitioner and the Chinese entity. In addition to corporate documents pertaining to the foreign entity, the 
director specifically requested proof of the Chinese entity's purchase of the petitioner's stock. The petitioner 
submitted a detailed response to the director's request, with numerous corporate documents for both the U.S. 
and Chinese entities. The petitioner, however, failed to submit the requested evidence establishing that 
payment had been rendered for the outstanding shares of stock in the U.S. petitioner. 
WAC 03 174 50242 
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Upon review of the conflicting evidence submitted, the director concluded that the petitioner has submitted, it 
was not established that it was the subsidiary of the Chinese entity. In addition, the director also examined 
the claimed relationship between the companies for eligibility as affiliates, but concluded that the record 
owners of both the U.S. and Chinese entities did not own the same share or proportion of both entities as 
required by the regulations. The director subsequently concluded that the petitioner's claim of affiliation with 
the foreign entity was invalid, and as a result, the petition was denied on December 3,2003. 
The petitioner appealed the decision, asserting that an inadvertent oversight in the director's examination of 
the federal tax return resulted in the director's denial. In support of this contention, the petitioner provides a 
second copy of the petitioner's 2002 tax return, and provides a line-by-line examination of the director's 
alleged errors and the petitioner's alternative interpretation. The AAO will first examine the record of 
proceeding and the director's decision prior to examining the petitioner's claims on appeal. 
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. Matter of Church Scientology International, 19 I&N Dec. 593 (BIA 1988); see also 
Matter of Siemens Medical Systems, Inc., 19 I&N Dec. 362 (BIA 1986); Matter of Hughes, 18 I&N Dec. 289 
(Comm. 1982). In 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, 19 I&N Dec. at 595. 
Upon review of the record of proceeding, the petitioner has not established that it has the required qualifying 
relationship with the Chinese entity. 
In this case, the petitioner has provided documentary evidence outlining the shareholder interests in the U.S. 
and foreign entities, and has supplemented this evidence with explanatory statements which discuss the 
percentages of shareholder ownership. Specifically, the statements of counsel accompanying the initial 
petition claimed that the Chinese entity owned 80% of the petitioner, whi- andm 
each owned a 10% interest. The corporate documentation accompanying the petition, namely, the 
stock certificates, corroborated these claims. However, the petitioner's 2002 Federal and State tax returns 
indicate that the majority owner was in fact the beneficiary and not the Chinese entity as claimed. 
After finding this evidence contradictory and insufficient, the director requested additional evidence 
establishing the qualifying relationship, with specific focus on the payment rendered for the ownership 
interests in the petitioner. Since the petitioner failed to submit this evidence, the director focused on the 
contradictory evidence in the record and concluded that the petitioner and the Chinese entity were not 
qualifying organizations. On appeal, counsel for the petitioner asserts that the director's finding was in error, 
and submits a second 2002 tax return for review. 
Upon review of the record of proceeding, the AAO concurs with the director's finding that the U.S. and 
Chinese entities are not affiliates, nor does a parent-subsidiary relationship exist between them as defined by 
the regulations at 8 C.F.R. 5s 214.2(1)(l)(ii)(I) and (K). 
WAC 03 174 50242 
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On appeal, counsel for the petitioner claims that the director's review of the 2002 tax return was incorrect, 
and submits another copy of the 2002 return which is claimed to be "the same as the one filed with the 
Service." However, a review of the tax return filed on appeal indicates that an entirely different Schedules E 
and K were submitted, in addition to the fact that this return was completed by a different person than 
indicated on the return initially submitted with the petition. This newly submitted Schedule K indicates that 
the Chinese entity owns 80% of the entity, in contrast to the statements provided on Schedule K in the initial 
return. The petitioner also indicated on Schedule K that it was required to file Form 5472, and includes a 
copy on appeal. The initial Form 1120 submitted by the petitioner was not accompanied by a Form 5472. 
The information submitted on appeal appears to have been altered in an attempt to comply with the 
regulations and overcome the director's denial. Doubt cast on any aspect of the petitioner's proof may, of 
course, lead to a reevaluation of the reliability and sufficiency of the remaining evidence offered in support of 
the visa petition. Matter of Ho, 19 I&N Dec. 582, 591 (BIA 1988). If CIS fails to believe that a fact stated in 
the petition is true, CIS may reject that fact. Section 204(b) of the Act, 8 U.S.C. 5 1154(b); see also 
Anetekhai v. I.N.S., 876 F.2d 1218, 1220 (5th Cir.1989); Lu-Ann Bakery Shop, lnc. v. Nelson, 705 F. Supp. 7, 
10 (D.D.C. 1988); Systronics Corp. v. INS, 153 F. Supp. 2d 7, 15 (D.D.C. 2001). 
In this matter, the original tax return submitted with the petition is the one that the AAO will accept as valid. 
As previously discussed, this document severely contradicts the petitioner's claim that the Chinese entity 
owns 80% of the U.S. petitioner. It is incumbent upon the petitioner to resolve any inconsistencies in the 
record by independent objective evidence. Any attempt to explain or reconcile such inconsistencies will not 
suffice unless the petitioner submits competent objective evidence pointing to where the truth lies. Matter of 
Ho, 19 I&N Dec. at 591-92. In addition, the petitioner was given the opportunity to submit evidence 
establishing the purchase of the stock by the Chinese entity, but failed to do so. Failure to submit requested 
evidence that precludes a material line of inquiry shall be grounds for denying the petition. 8 C.F.R. 
5 103.2(b)(14). 
The definition of subsidiary requires that a parent own, directly or indirectly, more than half of a fum, 
corporation, or other legal entity and control the entity, own, directly or indirectly, half of the entity and control 
the entity, or own, directly or indirectly, 50 percent of a 50-50 joint venture and have equal control and veto 
power over the entity, or own, directly or indirectly, less than half of the entity, but in fact control the entity. See 
8 C.F.R. 5 214.2(1)(l)(ii)(K). The record clearly indicates that at the time of the filing of the petition, the 
petitioning enterprise did not maintain a qualifying "subsidiary" relationship with the overseas company based 
on the contradictory evidence that was not clarified by the petitioner. 
Although the newly-submitted tax return corroborates the original claim of a qualifying relationship between 
the U.S. petitioner and the claimed foreign affiliate, the evidence cannot establish the petitioner's eligibility in 
this proceeding. The regulations affirmatively require a petitioner to establish eligibility for the benefit it is 
seeking at the time the petition is filed. See 8 C.F.R. 5 103.2(b)(12). There is no explanation for two widely 
different tax returns submitted in support of the petitioner's ownership structure, and such a discrepancy casts 
doubt on the validity of all evidence submitted in this matter. 
WAC 03 174 50242 
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Based on the evidence presented, it is concluded that the petitioner and the Chinese entity were not affiliates 
nor did they have a parent-subsidiary relationship as of the filing date of this petition, and thus did not have a 
qualifying relationship as required by the regulations. 
Beyond the decision of the director, the petitioner should note that the evidence submitted in support of the 
qualifying relationship between the Chinese and U.S. entities was insufficient. Even if the original tax return 
corroborated the ownership of the U.S. petitioner, the documentation in the record was insufficient to satisfy 
the regulatory requirements. The petitioner submitted copies of share certificates for the U.S. entity, and the 
petitioner's 2002 tax return. This evidence alone is insufficient to satisfy the requirements of a qualifying 
relationship. As general evidence of a petitioner's claimed qualifying relationship, stock certificates alone are 
not sufficient evidence to determine whether a stockholder maintains ownership and control of a corporate 
entity. The corporate stock certificate ledger, stock certificate registry, corporate bylaws, and the minutes of 
relevant annual shareholder meetings must also be examined to determine the total number of shares issued, 
the exact number issued to the shareholder, and the subsequent percentage ownership and its effect on 
corporate control. Additionally, a petitioning company must disclose all agreements relating to the voting of 
shares, the distribution of profit, the management and direction of the subsidiary, and any other factor 
affecting actual control of the entity. See Matter of Siemens Medical Systems, Inc., 19 I&N Dec. at 362. 
Without full disclosure of all relevant documents, Citizenship and Immigration Services (CIS) is unable to 
determine the elements of ownership and control. 
An application or petition that fails to comply with the technical requirements of the law may be denied by 
the AAO even if the Service Center does not identify all of the grounds for denial in the initial decision. See 
Spencer Enterprises, lnc. v. United States, 229 F. Supp. 2d 1025, 1043 (E.D. Gal. 2001), affd. 345 F.3d 683 
(9th Cir. 2003); see also Dor v. INS, 891 F.2d 997, 1002 n. 9 (2d Cir. 1989)(noting that the AAO reviews 
appeals on a de novo basis). 
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. 6 1361. Here, that burden has not been met. Accordingly, the 
director's decision will be affirmed and the petition will be denied. 
ORDER: The appeal is dismissed.