USCIS Policy Update: L-1 Visa Limitations for Sole Proprietorships

The United States Citizenship and Immigration Services (USCIS) recently clarified, through their Policy Alert (PA-2023-29) dated October 20, that a sole proprietorship cannot file an L-1 visa petition for its owner. This decision stems from the fact that a sole proprietorship, unlike other business structures, is not recognized as a separate legal entity from its owner.

The nature of a sole proprietorship

A sole proprietorship is a business structure where a single individual owns all assets and is solely responsible for all liabilities. In this setup, the owner personally operates the business, blurring the lines between personal and business assets and liabilities. This direct involvement in every aspect of the business means that all profits and losses directly affect the owner’s personal finances. Additionally, in a sole proprietorship, the owner is personally liable for all business-related obligations, which can include debts and legal actions, further intertwining their personal and business affairs.

This lack of distinction between the owner and the business means that the entity lacks the legal separation needed for certain types of business-related immigration petitions, such as the L-1 visa.

Exploring the L-1 Intracompany Transferee Visa

The L-1 visa is a commonly used visa category for transferring managerial, executive, and specialized knowledge personnel from a foreign business to a related US business. This visa allows companies with operations in both the US and abroad to bring key employees to the US office.

The L-1 visa is especially valuable for multinational companies looking to maintain a global presence by leveraging the expertise of their international staff. It facilitates the transfer of employees who possess unique knowledge critical to the operations of the US entity, enhancing business efficiency and competitiveness. Moreover, the L-1 visa offers a pathway for foreign nationals to gain valuable international work experience and potentially transition to permanent residency in the United States, benefiting both the individual and the employer.

USCIS Policy on Sole Proprietorships and L-1 Petitions

The current USCIS policy dictates that a sole proprietorship may not file an L-1 petition on behalf of its owner. This is because an L-1 petition requires a clear separation between the employer (petitioning entity) and the beneficiary (employee).

In a sole proprietorship, where the owner and the business entity are legally indistinguishable, this necessary separation does not exist, rendering a petition by the owner for themselves as impermissible.

Filing an L-1 Visa through a Sole Proprietorship

Despite these restrictions, a sole proprietorship can still file an L-1 visa petition for an eligible employee. For example, if an individual owns a sole proprietorship both abroad and in the US, they can sponsor an eligible employee for an L-1A or L-1B visa to transfer to the US business.

This option allows sole proprietors to utilize the L-1 visa program, provided the petition is for an employee other than the owner. It’s important to consult a NY visa lawyer to ensure compliance with immigration regulations and to maximize the chances of a successful petition.

The distinction between sole proprietorships and self-incorporated entities

The Policy Alert also highlights the difference between a sole proprietorship and a self-incorporated petitioner, like a corporation or a limited liability company (LLC) with a single owner.

In contrast to a sole proprietorship, a corporation or a single-member LLC is recognized as a distinct legal entity that is separate from its owner. This legal distinction allows such entities to file an L-1 visa petition for their owner, as the requisite separation between the petitioning entity and the beneficiary exists in these cases. Talk to a NY visa lawyerfor guidance on navigating the L-1 visa application process effectively.

The role of a NY visa lawyer

Navigating the complexities of L-1 visa petitions, especially in cases involving sole proprietorships, can be challenging. A NY visa lawyer can provide expert guidance on these matters, ensuring that businesses and individuals make informed decisions about their visa options and strategies. An experienced attorney can help clarify the distinctions between different business structures and their impact on visa eligibility.

Berd & Klauss, PLLC: Your NY visa lawyer

At Berd & Klauss, PLLC, we are a team of dedicated non-immigrant visa lawyers in New York, specializing in both immigration and non-immigration-related issues. We treat each client as a unique individual, ensuring personalized attention and tailored solutions.

Contact us to discuss non-immigrant visas, processing, and any other immigration concerns you may have. We are here to answer all your questions and guide you through the complexities of US immigration law. Let our expertise as NY visa lawyers help you navigate your immigration journey with confidence and clarity.