dismissed L-1A Case: Wholesale And Retail

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U.S. Department of Homeland Security 
20 Massachusetts Ave. N.W., Rm. A3042 
Washington, DC 20529 
U. S. Citizenship 
and Immigration 
Services 
File: SRC 04 036 50427 Office: TEXAS SERVICE CENTER Date: OCT 1 1 2005 
IN RE: 
Petition: Petition for a Nonirnmigrant Worker Pursuant to Section 101(a)(15)(L) of the Immigration 
and Nationality Act, 8 U.S.C. $ 1 101(a)(15)(L) 
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. 
(4 
dministrative Appeals Office 
SRC 04 036 50427 
Page 2 
DISCUSSION: The Director, Texas Service Center, denied the petition for a nonirnmigrant 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 managing director 
(vice-president) 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. 5 1101(a)(15)(L). The petitioner is a Georgia 
corporation that claims to be engaged in the wholesale and retail business. It operates a gas station and 
convenience store. The petitioner claims that it is the subsidiary of ocated in Stockholm, Sweden. 
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 three years. 
The director denied the petition concluding that the petitioner did not establish: (1) that the beneficiary will be 
employed in the United States in a primarily managerial or executive capacity; (2) that the U.S. entity was 
doing business for the entire previous year; or (3) that the United States entity has a qualifying relationship 
with the foreign entity. 
On appeal, counsel for the petitioner asserts that the director's decision is in error because it places undue 
emphasis on the small size of the petitioning company and the number of employees the beneficiary 
supervises. Counsel contends that the petitioner submitted evidence that it had been operating its business for - -* 
approximately 18 months at the time the instant request for an extension of the beneficiary's status was 
submitted. Finally, counsel states that the petitioner submitted sufficient evidence to establish a qualifying 
relationship with the foreign entity, and that such relationship was recognized when Citizenship and 
Immigration Services (CIS) approved the initial L-1A petition submitted by the petitioner. In support of these 
assertions, counsel cites Mars Jewelers Inc. v. INS, 702, F. Supp. 1570 (N.D. Ga. 1988), and various 
unpublished AAO decisions. Counsel submits a detailed brief and additional evidence in support of the 
appeal. 
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. § 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. 
SRC 04 036 50427 
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(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 himlher 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 first issue in the present 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. 5 1101(a)(44)(A), defines 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; 
SRC 04 036 50427 
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(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 
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. 8 1101(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. 
On the Form 1-129 Petition submitted on November 19, 2003, the petitioner indicated that the beneficiary is 
"in charge of the company expansion of ~hole'salelretail businesses, including exploring and acquiring 
possible franchised and lor related businesses. Wb1 work with company's existing retail business to develop 
more profitability." In an appended letter dated November 12, 2003, the petitioner stated that the beneficiary 
performs "executive functions" and that he is "in charge of analyzing, planning and establishing policies and 
goals for the company and supervising the management." 
On the Form 1-129 Petition, the petitioner indicated that it employed three workers. The petitioner submitted 
its IRS Form 941, Employer's Quarterly Federal Tax Return, with attachments showing that the petitioner 
paid total wages of $33,172.01 to three employees during the third quarter of 2003. 
On December 2, 2003, the director requested additional evidence to establish that the beneficiary will be 
employed in a primarily managerial oi executive capacity. In part, the director requested: (1) a definitive 
statement describing the beneficiary's U.S. position including all duties, the percentage of time spent on each 
duty, the number of subordinate employees who report to the beneficiary, with their job titles, duties and 
educational background; (2) an indication as to who produces the products or provides the services of the 
business; (3) copies of the petitioner's Quarterly Tax Returns for 2002 and 2003; (4) copies of the petitioner's 
Quarterly Wage Reports for 2002 and 2003; and (5) an organizational chart for the United States entity. 
SRC 04 036 50427 
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In a reply dated February 24, 2004, the petitioner submitted, through its former representative, the following 
description of the beneficiary's job duties: 
a) Position title: Vice President 
b) Duties: The beneficiary is engaged ind'analyzing, planning an[d] implementing the goals of [the 
petitioner] for the success andZgrowth' of the organization. He is completely involved in carrying 
out the duties as an executive, full the, by establishing Policies and Goals for the company and 
supervising the management effectively. 
C) The beneficiary directly oversees .the manager and accountant for effective control of [the 
petitioner] besides occasional contacts with other employee. 
The petitioner further indicated that it employed a manager-.-who "performs duties such as supervising 
cashiers, control inventory, keep accounts of sales and purchases, pricing control for profitability, handle cash 
flow and bank deposits, deal with vendors and suppliers, place orders for merchandise and any applicable 
necessities, deal with the customers for maintaining .the public relations." The petitioner also stated that its 
cashiers "are responsible for the sales of the merchandise at the cash register in dealing with the customers 
and take care of stocking the merchandise and display of the posters for promotion of the merchandise." 
The petitioner submitted the requested Forms 941, Employer's Quarterly Federal Tax Return, and Georgia 
Quarterly Tax and Wage Reports for the second halfbof 2002 and all four quarters of 2003. Th 
re ort for the last quarter of 2003 indicates three names, including the beneficiary 
dh but shows that only two employees were on the payroll in November - and December 2003. The 
petitioner submitted an organizational chart depicting a president, a vice president, an accountant and a 
manager. The chart indicates that the manager supervises a cashier and "temporary man power (cashier)." The 
chart did not identify any employees by nam& The petitioner also submitted three Forms 1099, Miscellaneous 
Income, issued to individuals who purportedly worked as cashiers on a contract basis in 2003. 
On March 10, 2004, the director denied the petition concluding that the petitioner failed to establish that the 
beneficiary would be employed in a primarily managerial or executive capacity under the extended petition. 
The director observed that the beneficiary does not manage professional or managerial staff, and noted that 
the tax and pay data submitted and the current structure of the company suggest that the beneficiary does not 
have sufficient staff to relieve him from performing non-qualifying operational duties associated with the 
business. 
On appeal, counsel for the petitioner asserts that the director erroneously concluded that the beneficiary would 
not be employed in a qualifying managerial or executive capacity. Counsel asserts that the director placed 
undue emphasis on the small size of the petitioning company and cites Mars Jewelers, Inc. v. INS, 702 F. 
Supp. 1570 (N.D. Ga. 1988) and several unpublished AAO decisions to stand for the proposition that a small 
company with few employees can support a managerial or executive position. Counsel claims that the 
beneficiary's duties are the same as the beneficiary in the Mars Jewelers case and that such decision is 
controlling precedent, as it was decided by a federal court in the same jurisdiction. Counsel further asserts the 
director failed to take into account the growth experienced by the petitioner during the first year of operations. 
SRC 04 036 50427 
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Counsel's assertions are not persuasive. Upon review of the petition and supporting evidence, the petitioner 
has not established that the beneficiary will bi employed in a managerial or executive capacity under the 
extended petition. When examining the executive or managerial capacity of the beneficiary, the AAO will 
look first to the petitioner's description of the job duties. See 8 C.F.R. 3 214.2(1)(3)(ii). The petitioner's 
description of the job duties must clearly describe the duties .to be performed by the beneficiary and indicate 
whether such duties are either in an executive or managerial capacity. Id. 
The petitioner's descriptions of the beneficiary's job duties do not establish that the beneficiary would be 
employed in a primarily managerial or executive capacity, other than in job title. The initial job description 
was brief and vague, indicating that the beneficiary's responsibilities included "exploring and acquiring 
possible franchised andlor related businesses," ':analyzing, planning and establishing policies and goals for 
the company," and "supervising the management." Reciting the beneficiary's vague job responsibilities or 
broadly-cast business objectives is not sufficient; the regulations require a detailed description of the 
beneficiary's daily job duties. The petitioner has failed to answer -a critical question in this case: What does 
the beneficiary primarily do on a daily basis? The actual duties themselves will reveal the true nature of the 
employment. Fedin Bros. Co., Ltd. v. Sava, 724 F. Supp. 1103+ 1108 (E.D.N.Y. 1989), afd, 905 F.2d 41 (2d. 
Cir. 1990). 
Accordingly, the director requested a comprehensive description of the beneficiary's duties including a list of 
specific duties and the percentage of time spent on each duty. In response, the petitioner provided a job 
description consisting of two sentences that essentially paraphrase portions of the regulatory definition of 
"executive capacity." See section 101(a)(44)(B) of the Act, 8 U.S.C. 1101(a)(44)(B). Conclusory assertions 
regarding the beneficiary's employment capacity are not sufficient. Merely repeating the language of the 
statute or regulations does not satisfy the>petitionerls burden of proof. Fedin Bros. Bo. Ltd. v. Sava, 724 F. 
Supp. at 1108; Avyr Associates, Inc. v. Meissner, 1997 WL 188942 at "5 (S.D.N.Y.). The regulation states 
that the petitioner shall submit additional evidence as the director, in his or her discretion, may deem 
necessary. The purpose of the request for evidence is to elicit further information that clarifies whether 
eligibility for the benefit sought has beqn established, as of the time the petition is filed. See 8 C.F.R. 
§§ 103.2(b)(8) and (12). The 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). 
Based on the current record, the AAO is unable to determine whether the claimed managerial duties constitute 
the majority of the beneficiary's duties, or whether the beneficiary primarily performs non-managerial 
administrative or operational duties. Although specifically requested by the director, the petitioner's 
description of the beneficiary's job duties does not establish what proportion of the beneficiary's duties is 
managerial in nature, and what proportion is actually non-managerial. See Republic of Transkei v. INS, 923 
F.2d 175, 177 (D.C. Cir. 1991). 
On appeal, counsel states that the director placed undue emphasis on the petitioner's small staff size in 
making her determination, noting that the statute, regulations and case law do not impose such a requirement 
with respect to the size of the petitioning organization. Pursuant to section 101(a)(44)(C) of the Act, 8 U.S.C. 
3 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 
SRC 04 036 50427 
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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 requixe CIS to examine the organizational structure and staffing 
levels of the petitioner. See 8 C.F.R. 3 214.2(1)(14-)(ii)(D). 
Contrary to counsel's statement on appeal that the petitioner "merely establish that it is making normal 
progress in the growth and development of the business," the regulation at 8 C.F.R. 3 214.2(1)(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 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. 
A review of the record with respect to the petitioner's staffing levels undermine? the petitioner's claim that 
the beneficiary performs managerial or executive-level duties associated with the company's overall 
management. As noted above, pursuant to 8 C.F.R. 8 214.2(1)(14)(ii)(D), the petitioner is required to describe 
the staffing of the new operation, including the number of employees and' the types of positions held 
accompanied by evidence of wages paid to employees. The petitioner in this case indicated that it employs 
the beneficiary as managing directorlvice president, an accountant, a manager, a cashier and temporary 
independent contractors who also work as cashiers. The petitioner's organizational chart shows a president 
above the beneficiary, but did not further describe his role within the company. The petitioner did not provide 
a name or a job description for its accountant, and the AAO can find no evidence that the company employed 
anyone in this position. Going on record without supporting documentary evidence is not sufficient for 
purposes of meeting the burden of proof in these proceedings. Matter of Sofici, 22 I&N Dec. 158, 165 
(Comm. 1998) (citing Matter of Treasure Craft of Calijornia, 14 I&N Dec. 190 (Reg. Comm. 1972)). 
The petitioner reported three employees in October 2003, but only two employees for November and 
December 2003. At the time the etition was filed in November 2003, it appears that the only employee, other 
than the beneficiary, was Since-is the petitioner's lowest paid employee, the 
AAO assumes he is a cashier. With only a cashier or cashiers as subordinates, it is assumed that the 
beneficiary was required to perform all of the non-managerial operational duties attributed to the manager, 
including supervising cashiers, inventory control, day-to-day banking, ordering merchandise, receiving 
deliveries from vendors and suppliers, and dealing with customers as necessary. Even if the petitioner had 
established that it employed a manager at the time of filing, the petitioner has not explained who supervises 
cashiers when the manager is not on duty, if not the beneficiary. Since gas station/convenience stores 
typically maintain long operating hours, and the petitioner only claims to have one managerial or supervisory 
employee to cover such hours, it is reasonable to assume-that the majority of the beneficiary's time is actually 
devoted to performing non-qualifying operational duties in the petitioner's store, or serving as a first-line 
supervisor of low-level employees. 
While the petitioner claims that the beneficiary's performs primarily managerial or executive duties, the 
petitioner has not established that it reasonably requires a bona fide managing directorlvice-president in light 
of its current stage of development. The beneficiary may indeed perform some of the claimed managerial or 
executive duties; however, the petitioner has not substantiated its claim that such duties are his primary duties. 
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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, Inc. 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). Based on the record of proceeding, the beneficiary's job duties are principally composed of non- 
qualifying duties that preclude him from functioning in a primarily managerial or executive role. 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). 
Counsel cites Mars Jewelers, Inc. v. INS, 702 F. Supp. 1570, 1573 (N.D. Ga. 1988) and several unpublished 
AAO decisions to stand for the proposition that the small size of a petitioner will not, by itself, undermine a 
finding that a beneficiary will act in a primarily managerial or executive capacity. Counsel has furnished no 
evidence to establish that the facts in the instant matter are analogous to Mars Jewelers, Inc. v. INS. It is 
noted that this case relates to an immigrant visa petition, and not the extension of a "new office" 
nonimrnigrant visa. As the new office extension regulations call for a review of the petitioner's business 
activities and staffing after one year, the cases cited by counsel are distinguishable based on the applicable 
regulations. See 8 C.F.R. 3 214.2(1)(14)(ii). Additionally, in contrast to the broad precedential authority of 
the case law of a United States circuit court, the AAO is not bound to follow the published decision of a 
United States district court in matters arising within the same district. See Matter of K-S-, 20 I&N Dec. 715 
(BIA 1993). Although the reasoning underlying a district judge's decision will be given due consideration 
when it is properly before the AAO, the analysis does not have to be followed as a matter of law. Id. at 719. 
With respect to the unpublished AAO decision cited by counsel, while 8 C.F.R. 5 103.3(c) provides that AAO 
precedent decisions are binding on all CIS employees in the administration of the Act, unpublished decisions 
are not similarly binding. As counsel has not discussed the facts of any of the cited matters, they will not be 
considered in this proceeding. 
Based on the foregoing discussion, the petitioner has not established that the beneficiary will be employed in 
a primarily managerial or executive capacity pursuant to 8 C.F.R. 5 214.2(1)(3). For this reason, the appeal 
will be dismissed. 
The next issue in this proceeding is whether the petitioner established that it has been doing business for the 
year preceding the filing of the instant petition as required by 8 C.F.R. 5 214.2(1)(14)(ii)(B). 
In support of the initial petition, the petitioner submitted recent utility bills, licenses, bank statements, and 
invoices as evidence that it was doing business. On December 2, 2003, the director requested additional 
evidence of business conducted during the past year and a copy of the petitioner's lease agreement. The 
director also noted that the petitioner operates a Conoco gas station and requested a copy of its franchise 
agreement to sell Conoco products. 
In response, the petitioner submitted: (1) invoices for merchandise and gasoline purchased from June 2002 
through February 2004; and (2) a copy of its lease agreement for the property which includes the gas station 
and convenience store, signed in May 2002. The lease agreement stipulates that the petitioner is obligated to 
purchase only Conoco brand gasoline. The petitioner also submitted a "petroleum marketing agreement" 
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d the petitioner's landlord in 1999, which was subsequently 
On June 4, 2002, the director denied the petikion, concluding that the petitioner had not been doing business. 
The director concluded that the petitioner had only purchased inventory for the business, rather than showing 
the regular provision of goods and services as required by the regulations. On appeal, counsel asserts that the 
petitioner purchased the existing gas station and convenience store six months prior to filing the initial 
petition for the beneficiary, and it has never ceased operations. Counsel attached a copy of the purchase 
agreement for the property dated May 24,2002. 
Upon review, the petitioner has submitted sufficient evidence to establish that it has been doing business for 
the previous year as required by 8 C.F.R. § 214.2(1)(14)(ii)(B). Although the director noted that the petitioner 
had only provided evidence that it purchased inventory, it is reasonable to assume that the petitioner has 
regularly purchased gasoline and merchandise for.its store because it is, in fact, replenishing goods that were 
sold in the regular course of doing business. The director's decision with respect to this issue will be 
withdrawn. 
The final issue in this matter is whether the petitioner has established that the petitioner maintains a qualifying 
relationship with a foreign entity as required by at 8 C.F.R. 214.2(1)(14)(ii)(A). 
Pursuant to the regulation at 8 C.F.R. 8 214.2(1)(l)(ii)(G), "qualifying 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/ 
(3) Otherwise meets the requirements of section 101(a)(15)&) of the Act. 
The regulations at 8 C.F.R. 8 214.2(1)(l)(ii) provide the following definitions for purposes of establishing a 
qualifying relations5p. 
(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. 
(K) Subsidiary means a fm, 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 
SRC 04 036 50427 
Page 10 
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. 
On Form 1-129, the petitioner indicated that it is a subsidiary of the foreign entity, but stated that the 
beneficiary owns 50 percent of the foreign entity and 51 percent of the U.S. entity. The petitioner's November 
12, 2003 letter submitted in support of the petition indicates that the foreign company owns 100 percent of the 
petitioner's stock. 
In the request for evidence, the director asked the petitioner to provide documentary evidence to establish the 
current ownership and control of both entities, including stock certificates, corporate bylaws which indicate 
stock ownership or copies of published annual reports which indicate affiliates or subsidiaries. The director 
also requested evidence of the funding or capitalization of the United States company, such as copies of wire 
transfers showing transfer of funds from the foreign organization, evidence of financial resources committed 
by the foreign company, copies of bank statements, and profit and loss statements. 
In response, the petitioner indicated that it is a wholly owned subsidiary of the foreign entity. It submitted its 
stock certificate number one indicating that 100,000 shares of the U.S. company's stock were issued to the 
foreign entity on April 11, 2002. The petitioner submitted evidence of receipt of fourteen wire transfers 
originating from various individuals and bank accounts. However, none of the wire transfers identify the 
foreign entity as the originator of the funds transferred. 
The director denied the petition, concluding'that since the petitioner is operating a franchise gas station, the 
petitioner cannot establish that it is a subsidiary of the foreign company. 
On appeal, counsel contends that the fact that the business is a franchised gas station "does not preclude it 
from being part of an international group of companies." Counsel asserts that the director overlooked the 
evidence provided of the parent-subsidiary relationship between the foreign entity and the petition, and notes 
that such relationship was previously recognized by CIS when it approved the initial petition. In support of 
these assertions, the petitioner submits its articles of incorporation, its previously submitted stock certificate 
showing that all 100,000 shares of its stock we're issued to the foreign entity, and a certificate of corporate 
resolution dated January 2, 2002. This resolution indicates that 5,100 shares of stock were issued to the 
beneficiary and 4,900 shares of stock were issued to while 90,000 shares remained 
SRC 04 036 50427 
Page 11 
outstanding. The petitioner also submitted a proof of registration for the foreign company, dated September 
11,2002, identifying the beneficiary as a deputy board member. 
Upon review of the evidence, the petitioner has not established that it maintains a qualifying relationship with 
the foreign entity as required by 8 C.F.R. 3 214.2(1)(14)(ii)(A). The AAO will first address counsel's 
assertion that the director erred in denying the petitioner's petition for an extension of the beneficiary's status 
when CIS previously approved a petition based on similar facts. Established precedent reflects that prior 
approvals do not preclude CIS from denying an extension of the original visa based on reassessment of the 
petitioner's qualifications. Texas A&M Univ. v. Upchurch, 99 Fed. Appx. 556, 2004 WL- 1240482 (5th Cir. 
2004). Further, the petitioner's prior petition to which counsel refers was a petition to allow the beneficiary to 
enter the United States to open a new office. Thus, that petition was governed by'the regulations pertaining to 
new offices. See 8 C.F.R. 5 214.2(1)(3)(~). The present petition is a request for an extension of the 
beneficiary's status after completing a one-year period to open a new office. Thus, the present petition is 
governed by a different set of regulations pertaining specifically to new office extensions. See 8 C.F.R. !j 
214.2(1)(14)(ii). As different law and evidentiary requirements apply to the present petition, the director has a 
duty to carefully review the petitioner's representations and documentation to determine if eligibility has been 
established. Contrary to counsel's suggestion, the fact that a prior petition was approved on behalf of the 
beneficiary does not serve as prima facie evidence that eligibility has been established in the present 
proceeding. 
On review, the director incorrectly focused on the petitioner's operation of a franchise rather than on the 
necessary qualifying relationship between the benefi&ary's foreign employer and the U.S. petitioner. See 8 
C.F.R. 5 214.2(1)(3)(i) (requiring that the petitioner and the organization which employed the beneficiary are 
qualifying organizations). The evidence of stock ownership is not only material to the petitioner's claims, but 
critical to determining whether a qualifying relationship exists. The director's comments with respect to this 
issue will be withdrawn, as it appears that she did not consider-any evidence related to the petitioner's stock 
ownership. 
The regulations and case law confirm that the key factors for establishing a qualifying relationship between 
the U.S. and foreign entities are "ownership" aid 'Icontrol." Matter of Siemens Medical Systems, Inc. 19 I&N 
Dec. 362 (BIA 1986); Matter of Hughes, 18 I&N Dec. 289 (Comm. 1982); see. also Matter of Church 
Scientology International, 19 I&N Dec. 593 (BIA 1988) (in immigrant visa procee9ings). In the context of 
this visa petition, ownership refers to the direct and 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, 19 
I&N Dec. at 595. 
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 
SRC 04 036 50427 
Page 12 
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 364-365. Without full 
disclosure of all relevant documents, CIS is unable to determine the elements of ownership and control. 
In general, a "franchise" is a cooperative business operation. based on a contractual agreement in which the 
franchisee undertakes to conduct a business or to sell a product or service in accordance with methods and 
procedures prescribed by the franchiser, and, in return, the franchiser undertakes to assist the franchisee 
through advertising, promotion, and other advisory services. .A franchise agreement, like a license, typically 
requires that the franchisee comply with the franchiser's restricqons, without actual ownership and control of 
the franchised operation. See Matter of Schick, 13 I&N Dec., 647 (Reg. Comm. 1970) (finding that no 
qualifying relationship exists where the association between two companies was based on a license and 
royalty agreement that was subject to termination since the ';yelationship was "purely contractual"). An 
association between a foreign and U.S. entity based on a contractual franchise agreement is usually 
insufficient to establish a qualifying relationship. Id. See also, 9 FAM 41.54 N7.1-5; 0.1. 214.2(1)(4)(iii)(D) 
(noting that associations between companies based on factors such as ownership of a small amount of stock in 
another company, or licensing or franchising agreements, do not create affiliate relationships between the 
entities for L-1 purposes). 
By itself, the fact that a petition involves a franchise will not automatically disqualify the petitioner under 
section 101(a)(15)(L) of the Act. When ieviewing a petition that involves a franchise, the director must 
carefully examine the record to determine how the franchise agreement affects the claimed qualifying 
relationship. As discussed, if a foreign company enters into a franchise, license, or contractual relationship 
with a U.S. company, that contractual relationship can be terminated and will not establish a qualifying 
relationship between the two entities. See Matter of Schick, 13 I&N Dec. at 649. However, if a foreign 
company claims to be related to a U.S. company through common ownership and control, and that U.S. 
company is doing business as a franchisee, the director must examine whether the U.S. and foreign entities 
possess a qualifying relationship through common ownership and management under section 101(a)(15)(L) of 
the Act. 
Nonetheless, it is critical in all cases that the petitioner fully disclose the tenns of any franchise agreement, 
especially as the agreement relates to the transfer of ownership, voting of shares, distribution of profit, 
management and direction of the franchisee, or any other factors affecting actual control of the entity. 
C$ Matter of Siemens Medical Systems, Inc., 19 I&N Dec. at 364-65. , In this case, the "petroleum marketing 
agreement" entered into by the petitioner appears to only affect its signage and purchase of gasoline. There is 
nothing in the agreement to suggest that it would affect actual control of the company. 
In the present matter, t ationship is that between the beneficiary's overseas employ- 
and the U.S. petitioner, 
-= --- 
Although the petitioner does business in the United States through a 
franchise or marketing agreement, the claimed relationship between an-is based on 
stock ownership and not the franchise agreement. In order to determine whether a qualifying relationship 
exists, the AAO must examine the number of shares of stock issued by the petitioner, the ownership of that 
stock, and the resulting percentage ownership of the U.S. petitioner. 
SRC 04 036 50427 
Page 13 
Upon review, the petitioner has failed to demonstrate the ,existence of the requisite qualifying relationship 
between the foreign and U.S. entities. The AAO acknowledges the evidence submitted by counsel, including 
the stock certificate and articles of incorporation, which counsel contends demonstrates ownership of the U.S. 
entity by the beneficiary's foreign employer. Howevef, there are several contradictions and omissions from 
the record that undermine the petitioner's claim. 
The petitioner initially claimed on Form 1-129 that the beneficiary owns 51 percent of the United States 
entity. This claim is supported by the "certificate of corporate resolution" submitted on appeal, which states 
that 5,100 out of 10,000 issued shares were initially issued to the beneficiary in January 2002. Since this was 
the initial issuance of stock, the AAO assumcs that stock certificates numbers one and two would have been 
issued to the beneficiary and the other individual who acquired 4,900 shares of stock at that time. Since the 
petitioner claims that the foreign entity owns all of the outstanding stock, the petitioner should be able to 
provide evidence of another board resolution(s) addressing the transfer of stock and issuance of the remaining 
90,000 shares, canceled stock certificates, and a stock ledger confirming the subsequent transfer of the 10,000 
shares from the two individual shareholders to the foreign company. Instead, the petitioner submitted a single 
stock certificate number one, issued in April 2002, indicating that all 100,000 shares were issued to the 
foreign entity. The petitioner offers no explanation regarding, its own statements and documentary evidence 
confirming the stock issuance to the beneficiary, and no, evidence to substantiate that such shares were ever 
transferred. Finally, the petitioner's IRS Form 1120, U.S. Corporation Income Tax Return, for 2002 indicates 
that the petitioner has issued preferred stock valued at 10,000 and common stock valued at 10,000, and does 
not indicate ownership by a foreign company on Schedule K. These conflicting statements and evidence have 
not been resolved. 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. 582,591-92 (BIA 1988). Doubt cast on any aspect of the petitioner's proof may, of course, lead to a 
reevaluation of the reliability and suffici&cy of the remaining evidence offered in support of the visa petition. 
Matter of Ho, 19 I&N Dec. 582,591 (BIA 1988). 
In addition, the petitioner has failed to establish that the foreign entity has transferred funds to the U.S. entity, 
as none of the wire transfers identify the foreign entity as the originator of the monies transferred to the 
petitioner. Finally, the petitioner submitted no evidence to establish that the foreign entity continues to do 
business in Sweden. Based on the above, the petitioner has failed to establish that it and the foreign entity 
remain qualifying organizations as required by 8 C.F.R. 3 214.2(1)(14)(A). For this additional reason, the 
appeal will be dismissed. 
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. 5 1361. Here, the petitioner has not met that burden. 
ORDER: The appeal is dismissed.