The Qualifying Employer Relationship

One of the foundational requirements of any L-1 petition is the existence of a qualifying relationship between the U.S. petitioning employer and the foreign entity where the employee currently works or has worked. USCIS scrutinizes this relationship carefully, and the petitioner must provide documentary evidence to establish it.

The Four Qualifying Relationships

Relationship Type	Definition	Common Example
Parent Company	The foreign entity owns a controlling interest in the U.S. company, or the U.S. company owns a controlling interest in the foreign entity.	A German corporation that owns 51%+ of a U.S. subsidiary
Subsidiary	One entity owns more than 50% of another, or owns a majority interest sufficient to control the other entity.	A U.S. parent company with a wholly-owned Indian subsidiary
Affiliate	Two entities are both owned or controlled by the same parent, person, or group of persons.	Two companies each 100% owned by the same individual
Branch Office	A division or office of the same legal entity operating in another country.	A U.S. law firm opening a London branch office

Ownership vs. Control — A Critical Distinction

USCIS does not require a specific ownership percentage in all cases — what matters is effective control. An entity that owns exactly 50% of another does not automatically qualify because equal ownership does not give either party control. The regulations focus on whether one entity has the ability to direct, dictate, or control the other’s management and operations.

Practice Tip: Qualifying Relationship Evidence

Corporate documents establishing the qualifying relationship must be provided with every L-1 petition. This typically includes stock certificates, shareholder agreements, corporate organizational charts, articles of incorporation, annual reports, and tax returns showing ownership structure. For complex multinational structures, a detailed ownership chart is essential.

New Office L-1 — Establishing a U.S. Presence

A foreign company that does not yet have a U.S. office may use the L-1 to send a qualifying employee to establish one. This is commonly known as the ‘new office’ L-1 and has specific requirements:

The U.S. entity must have secured physical premises where the business will operate (a virtual office is not sufficient).
The petitioner must demonstrate that the U.S. and foreign entities will have a qualifying relationship once the new office is established.
The employee must be coming to work in a managerial, executive, or specialized knowledge capacity.
Business plan and projections must show the U.S. entity will grow to support a manager or executive within one year.

New Office L-1: Initial Approval Is Only 1 Year

New office L-1 petitions are initially approved for only one year, regardless of whether L-1A or L-1B is filed. After one year, the company must demonstrate that it has grown sufficiently — particularly that it now employs staff the manager or executive supervises (for L-1A) — to obtain an extension. Failure to meet these benchmarks is a common reason for denial of new office extensions.