dismissed L-1A Case: Real Estate

identifying data de\et~ to
preventdearly l:·jj.vl:l;rr~nted
invasionof personalprivacy
u.s.Department of Homeland Security
20 Massachusetts Ave., N.W., Rm. A3000
Washington, DC 20529
u.s.Citizenship
and Immigration
Services
FILE: SRC 05 10351746 Office: TEXAS SERVICE CENTER Date: FEB (\~ ,. -'ifO
i • U' 11. ,,-...lUi
INRE: Petitioner:
Beneficiary:
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)
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.
R~~~f
Administrative Appeals Office
www.uscis.gov
SRC 05 10351746
Page 2
DISCUSSION: The Director, Texas Service Center, denied the petition for a nonimmigrant visa. The matter
is now before the Administrative Appeals Office (AAO) on appeal. The appeal will be dismissed.
The petitioner filed this nonimmigrant petition seeking to extend the employment of its chief executive officer
as an L-IA nonimmigrant intracompany transferee pursuant to section 101(a)(l5)(L) of the Immigration and
Nationality Act (the Act), 8 U.S.C. § 1101(a)(l5)(L). The petitioner, a sole proprietorship organized in the
State of Texas, claims to be the affiliate of Gabay Jewelry, located in Haifa, Israel. The petitioner identifies
itself as a real estate management and investment company. 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.
The director denied the petition concluding that the petitioner did not establish that the beneficiary will be
employed in the United States in a primarily managerial or executive capacity.
The petitioner filed an appeal in response to the denial. On appeal, counsel for the petitioner alleges that the
director's decision was erroneous, and particularly focuses on the director's failure to consider that the
beneficiary had less than one year in the United States to establish the U.S. organization. Specifically,
counsel asserts that the director erred by not considering the petitioner as being in the start-up phase of
operations. In support of these contentions, counsel submits a brief and additional evidence.
To establish eligibility for the L-l nonimmigrant visa classification, the petitioner must meet the criteria
outlined in section lOl(a)(l5)(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. § 214.2(1){3) provides 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 (1)(1)(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, training, and employment qualifies him/her to perform the intended services in
SRC 05 103 51746
Page 3
the United States; however, the workin the United Statesneed not be the same work which
the alien performed abroad.
In addition, the regulation at 8 C.F.R. § 214.2(1)(14)(ii) 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 defmed in paragraph (l)(1)(ii)(G) of this section;
(b) Evidence that the United States entity has been doing business as defmed in
paragraph (1)(1)(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 staffmg 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 managerial or executive
capacity; and
(e) Evidence of the financial status of the United States operation.
The issue in this matter is whether the beneficiary will be employed by the United States entity in a primarily
managerial or executive capacity.
Section 101(a)(44)(A) of the Act, 8 U.S.C. § 1101(a)(44)(A), defmes the term "managerial capacity" as an
assignment within an organization in which the employee primarily:
(i) manages the organization, or a department, subdivision, function, or component of
the organization;
(ii) supervises and controls the work of other supervisory, professional, or managerial
employees, or manages an essential function within the organization, or a department
or subdivision of the organization;
(iii) if another employee or other employees are directly supervised, has the authority to
hire and fire or recommend those as well as other personnel actions (such as
promotion and leave authorization), or if no other employee is directly supervised,
functions at a senior level within the organizational hierarchy or with respect to the
function managed; and
(iv) exercises discretion over the day to day operations of the activity or function for
which the employee has authority. A first line supervisor is not considered to be
SRC 05 103 51746
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acting in a managerial capacity merely by virtue of the supervisor's supervisory
duties unless the employees supervised are professional.
Section 101(a)(44)(B) of the Act, 8 U.S.C. § 110I(a)(44)(B), defines the term "executive capacity" as an
assignment within an organization in which the employee primarily:
(i) directs the management of the organization or a major component or function of the
organization;
(ii) establishes the goals and policies of the organization, component, or function;
(iii) exercises wide latitude in discretionary decision making; and
(iv) receives only general supervision or direction from higher level executives, the board
of directors, or stockholders of the organization.
In a letter dated February 25, 2005, counsel for the petitioner stated that the petitioner had grown within the
past year and now employs two individuals. Counsel explained that, although the beneficiary's initial L-l
petition was approved in March of 2004, processing delays hindered the issuance of his visa until June 23,
2004, nearly four months after the approval date. With regard to the beneficiary's role in the United States,
counsel stated:
[The beneficiary] will be responsible for many areas of the business including continuing to
establish the presence in the u.S. market, making sure profitability levels meets expectations,
hiring, firing and training employees. He will continue to provide overall management and
CEO services to the Israeli organization, but will be primarily responsible for the u.S. office.
He will determine and formulate policy and plan and develop in accordance with the
company charter and by-laws. He will determine business strategies and business objectives.
The foreign entity also submitted a letter dated February 15, 2004, which provided the following proposed
duties for the beneficiary:
[The beneficiary's] job description in the U.S. as CEO of the organization will be as follows:
Determine and formulate policies and provide the overall direction of the company; Plan,
develop and establish policies and objectives of the company in accordance with directives
and corporation charter and by-laws; Plan, direct, and coordinate the operational activities at
the highest level of management with the help of subordinate executives, managers, and
employees; Determine and formulate policies, business strategies and business objectives,
and to develop organizational policies to coordinate functions and operations; Review activity
reports and fmancial statements to determine progress and status in attaining objectives and
revise objectives and plans in accordance with current conditions; Direct and coordinate
formulation of fmancial programs to provide funding for new or continuing operations to
SRC 05 103 51746
PageS
maxmnze return on investments, and to increase productivity; Supervise and train
subordinates, including executives, managers and employees; Evaluate performance of
executives and subordinates for compliance with established policies and objectives of the
firm.
On March 30, 2005, the director requested additional evidence pertaining to the nature of the beneficiary's
position in the U.S. business. The request specifically asked the petitioner to submit an organizational chart
for the petitioner; a more detailed description of the beneficiary's duties, including the percentage of time
devoted to each duty; a list of all subordinates of the beneficiary, with a description of each person's position
title and their duties; and copies of its quarterly tax returns for the past year.
Counsel for the petitioner submitted a response dated June 28, 2005. In a somewhat confusing manner,
counsel indicated that there were no employees on the payroll at the current time, yet submitted a list of three
==es of the petitioner, namely, Secretary; , Project Manager; and _
_ Assistant. Counsel further submitted a list of eight contractors providing various services for the
petitioner. Despite the director's request for employment verification of these persons, no quarterly returns,
1099s, W-2s or payroll summaries were submitted.
With regard to the beneficiary's duties, the following updated description was submitted:
[The beneficiary's] specific duties day to day include:
• Continuing to establish presence in the U.S. market.
• Making sure profitability levels meet[ ] expectations.
• Hiring, Firing, and Training employees.
• Overall management and CEO services to the Israeli company.
• Determine and formulate policies and provide the overall direction of the
organization.
• Plan, develop and establish policies and objectives of the company in accordance
with the directives and corporation charter and by-laws.
• Determine business strategies and business objectives.
On July 16, 2005, the director denied the petition. The director found that the evidence in the record was
insufficient to establish that the beneficiary would primarily be employed in a managerial or executive
capacity. The director concluded that the documentary evidence submitted did not establish that the
beneficiary would function at a senior level within the organization or that the beneficiary had sufficient
subordinate staff to relieve him from performing non-qualifying duties.
On appeal, counsel for the petitioner reasserts the claim that the petitioner should still be considered in the
start-up phase and that the beneficiary should not be unfairly penalized for his less than one-year in L-1 status
in the United States. Counsel further clarifies that at the time the 1-129petition was filed, the petitioner's sole
employee was the beneficiary, but that additional employees were hired in the second quarter of 2005.
Counsel refers to the use of staffing levels by the director in the denial and attempts to refute the director's
basis for the denial by providing documentation verifying the current staffing of the organization. Finally,
SRC 05 103 51746
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counsel restates the beneficiary's duties and claims that the petitioner has in fact satisfied the regulatory
requirements. Additional documentation regarding the positions of the petitioner's five alleged staff members
are submitted in support of this contention. The AAO, however, disagrees with counsel's assertions.
Counsel suggests that the present petition should be adjudicated under the regulations governing new offices,
provided in 8 C.F.R. § 214.2(l)(3)(v), as the beneficiary did not receive a full year in L-1A status. Counsel
takes issue with the director's application of the regulatory requirements for new office extensions as provided
in 8 C.F.R. § 214.2(l)(14)(ii). The initial new office petition (SRC-04-069-50270) was approved for a period
from March 1, 2004 to March 1, 2005, or 365 days. If a beneficiary is coming to the United States to open a
new office, the petition may be approved for a period "not to exceed one year." 8 C.F.R. § 214.2(l)(7)(i)(3).
Although counsel indicates that due to delays in the processing of the visa, the beneficiary did not arrive in the
United States until late 2005, the fact remains that any request for an extension of a petition that was originally
approved as a new office must be evaluated under the criteria set forth at 8 C.F.R. § 214.2(l)(14)(ii). The
regulations do not provide for any exception or discretionary authority to extend this one-year period.
Pursuant to section 101(a)(44)(C) of the Act, 8 U.S.C. § 1101(a)(44)(C), if staffing levels are used as a factor
in determining whether an individual is acting in a managerial or executive capacity, Citizenship and
Immigration Services (CIS) must take into account the reasonable needs of the organization, in light of the
overall purpose and stage of development of the organization. In the present matter, however, the regulations
provide strict evidentiary requirements for the extension of a "new office" petition and require CIS to examine
the organizational structure and staffmg levels of the petitioner. See 8 C.F.R. § 214.2(l)(l4)(ii)(D).
Counsel correctly observes that a company's size alone, without taking into account the reasonable needs of
the organization, may not be the determining factor in denying a visa to a multinational manager or executive.
See § 101 (a)(44)(C) of the Act, 8 U.S.C. § 1101(a)(44)(C). However, it is appropriate for CIS to consider the
size of the petitioning company in conjunction with other relevant factors, such as a company's small
personnel size, the absence of employees who would perform the non-managerial or non-executive operations
of the company, or a "shell company" that does not conduct business in a regular and continuous manner. See,
e.g. Systronics Corp. v. INS, 153 F. Supp. 2d 7,15 (D.D.C. 2001). The size ofa company may be especially
relevant when CIS notes discrepancies in the record and fails to believe that the facts asserted are true. Id.
In this matter, confusion arose as to whether the petitioner employed a subordinate staff to relieve the
beneficiary from performing non-qualifying duties. While the response to the request for evidence indicated
that the petitioner currently had no employees other than the petitioner, it also included a list of three
employees and eight independent contractors. This inconsistency was clarified on appeal by counsel, who
confirmed that at the time the extension request was filed in March 2005, the petitioner employed no other
persons besides the beneficiary. However, counsel asserts on appeal that the staffing of the organization has
since grown, and that the beneficiary is now supported by a subordinate staff sufficient in size to relieve him
from performing the tasks necessary to generate the services of the petitioner.
This evidence, however, is not acceptable to establish eligibility in this matter. The regulation at 8 C.F.R. §
214.2(l)(3)(v)(C) allows the "new office" operation one year within the date of approval of the petition to
support an executive or managerial position. There is no provision in CIS regulations that allows for an
SRC 05 103 51746
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extension of this one-year period. If the business does not have sufficient staffing after one year to relieve the
beneficiary from primarily performing operational and administrative tasks, the petitioner is ineligible by
regulation for an extension. In the instant matter, it is clear via counsel's own admission and the lack of
payroll records that at the time of filing, the beneficiary was the sole employee of the petitioner, and thus was
responsible for all aspects of the business. An employee who primarily performs the tasks necessary to
produce a product or to provide services is not considered to be employed in a managerial or executive
capacity. Matter of Church Scientology International, 19 I&N Dec. 593, 604 (Comm. 1988). Moreover, the
petitioner must establish eligibility at the time of filing the nonimmigrant visa petition. A visa petition may
not be approved at a future date after the petitioner or beneficiary becomes eligible under a new set of facts.
Matter ofMichelin Tire Corp., 17 I&N Dec. 248 (Reg. Comm. 1978).
Counsel further refers to an unpublished decision in which the AAO determined that the beneficiary met the
requirements of serving in a managerial and executive capacity for L-l classification even though he was
overseeing a small company with six employees. Counsel has furnished no evidence to establish that the facts
of the instant petition are analogous to those in the unpublished decision. While 8 C.F.R. § 103.3(c) provides
that AAO precedent decisions are binding on all CIS employees in the administration of the Act, unpublished
decisions are not similarly binding.
Based on the evidence presented, the petitioner has not reached the point that it can employ the beneficiary in
a predominantly managerial or executive position. For this reason, the petition may not be approved.
Beyond the decision of the director, the beneficiary as a matter of law is ineligible for the classification
sought. It is fundamental to this nonimmigrant classification that there be a United States entity to employ the
beneficiary. In order to meet the defmition of "qualifying organization," there must be a United States
employer. See 8 C.F.R. 214.2(l)(1)(ii)(G)(2). The petition includes evidence, including a certificate of
operation under an assumed name and confrrmation of the filing of an application for an IRS ITIN (Individual
Taxpayer Identification Number), that indicates the beneficiary is doing business as a sole proprietorship. A
sole proprietorship is a business in which one person operates the business in his or her personal capacity.
Black's Law Dictionary 1398 (7th Ed. 1999). Unlike a corporation, a sole proprietorship does not exist as an
entity apart from the individual proprietor. See Matter of United Investment Group, 19 I&N Dec. 248, 250
(Comm. 1984). As in the present matter, if the petitioner is actually the individual beneficiary doing business
as a sole proprietorship, with no authorized branch office of the foreign employer or separate legal entity in
the United States, there is no U.S. entity to employ the beneficiary and therefore no qualifying organization.'
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
}According to the Texas Comptroller of Public Accounts, it appears the beneficiary did incorporate an entity
in Texas under the name However, the petitioner in this matter has
not demonstrated that it Ii oration. Moreover,
. is not currently in good standing in Texas due to its failure to satisfy all state tax
requirements, thereby raising the issue of this company's continued existence as a legal entity in the United
States.
SRC 05 10351746
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Spencer Enterprises, Inc. v. United States, 229 F. Supp. 2d 1025, 1043 (E.D. Cal. 2001), aff'd. 345 F.3d 683
(9th Cir. 2003); see also Dar 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. § 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.