“Irrevocable” Proxy Votes Necessary for L-1 Qualifying Relationships: (New USCIS Guidance)

USCIS released policy guidance for officers adjudicating “qualifying relationships” for L-1 visa petitions. The new policy guidance requires an irrevocable, or irreversible, proxy vote to establish the “requisite control of a company in an L-1 visa petition.” The petitioner must now show that the proxy votes, which are votes used by owners of entities to determine control the entity, are irrevocable between the parent and subsidiary or between affiliates.

Policy Background

The L-1 visa allows a U.S. or foreign employer to petition a temporary transfer of a foreign employee to U.S. to work for subsidiary or affiliated operations in the U.S. To qualify for the petition, a petitioning employer must prove that a “qualifying relationship” exists between the foreign entity and the US company. To determine the relationship, USCIS officers must find proof of a parent/subsidiary or affiliate relationship between the U.S. and foreign company. Officers often determine a relationship between entities through an investigation of voting control between entities.

One way to examine control between entities is to use control established through proxy votes. According to USCIS, “Proxy votes are obtained when one or more equity holders irrevocably grant the ability to vote their equity to another equity holder, thereby effectively and legally giving the other equity holder “control” over the company or companies in question.” Therefore, the new policy memorandum requires adjudicating officers, using proxy votes as evidence of a qualifying relationship, to consider proxy votes if the petitioner has shown that the proxy votes are irrevocable “from the time of filing” through the adjudication. Petitioners must also provide evidence that the relationship, and irrevocable proxy vote control, will continue through the time of the visa.

The new policy guidance clarifies a decades old appeals decision, Matter of Hughes, which only established the understanding of “affiliation” for L-1 petitions. The previous ruling failed to clarify issues of control and ownership between entities. The new guidance will provide better evidence of L-1 visa qualifying relationships between petitioning entities.