U.S. Citizenship and Immigration Services

MATTER OF H-S-, INC.

Non-Precedent Decision of the Administrative Appeals Office

DATE: NOV. 28.2017

APPEAL OF CALIFORNIA SERVICE CENTER DECISION

PETITION: FORM I-129, PETITION FOR A NONIMMIGRANT WORKER

The Petitioner, an animation and movie production company. seeks to continue the Beneficiary's temporary employment as its chief financial officer (CFO) under the L-1 A nonimmigrant classification for intracompany transferees.' See Immigration and Nationality Act (the Act) section 101(a)(15)(L), 8 U.S.C. § 1101(a)(l5)(L). TheL-IA classification allows a corporation or other legal entity (including its affiliate or subsidiary) to transfer a qualifying foreign employee to the United States to work temporarily in a managerial or executive capacity.

The Director of the California Service Center denied the petition. concluding that the record did not establish, as required, that the Beneficiary would be employed in a managerial or executive capacity under the extended petition.

On appeal, the Petitioner states that it has clearly established that the Beneficiary oversees professional subordinates and that she will perform qualifying managerial and executive duties for the Petitioner.

Upon de novo review, we will dismiss the appeal.

I. LEGAL FRAMEWORK

To establish eligibility for the L-1 A nonimmigrant visa classification for a new office. a qualifying organization must have employed the beneticiary "in a capacity that is manageriaL executive. or involves specialized knowledge,'' for one continuous year within three years preceding the beneficiary's application for admission into the United States. Section IOI(a)(l5)(L) of the Act. In addition, the beneticiary 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 or executive capacity. !d.

1 The Petitioner previously filed a "'new office" petition on the Beneficiary's behalf which was approved for the period February 20. 2016, to February 19. 2017. A "'new office·· is an organization that has been doing business in the United States through a parent, branch, affiliate, or subsidiary for less than one year. 8 C.F.R. ~ 214.2(1)( I)( ii)( F). The regulation at 8 C.F.R. § 214.2(1)(3)(v)(C) allows a "new office" operation one year within the date of approval of the petition to support an executive or managerial position.

Matter of H-S-. Inc.

A petitioner seeking to extend an L-1 A petition that involved a new otTice must submit a statement of the beneficiary's duties during the previous year and under the extended petition: a statement describing the staning of the new operation and evidence ofthe numbers and types of positions held: evidence of its financial status; evidence that it has been doing business for the previous year: and evidence that it maintains a qualifying relationship with the beneficiary"s foreign employer. 8 C.F.R. § 214.2(1)(14)(ii).

The statute defines an "executive capacity'' as an assignment within an organization in which the employee primarily directs the management of the organization or a major component or function of the organization: establishes the goals and policies of the organization. component. or function: exercises wide latitude in discretionary decision-making; and receives only general supervision or direction from higher-level executives, the board of directors. or stockholders of the organization. Section 10l(a)(44)(B) ofthe Act.

The law defines the term "managerial capacity'' as an assignment in which an employee primarily manages the organization, or a department, subdivision, function. or component of the organization: supervises and controls the work of other supervisory, professionaL or managerial employees. or manages an essential function within the organization: has the authority to hire and tire or recommend those as well as other personnel actions, or functions at a senior level within the organizational hierarchy or with respect to the function managed: and exercises discretion over the day-to-day operations of the activity or function for which the employee has authority. Section 10l(a)(44)(A) of the Act. Further, "[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." !d.

If staffing levels are used as a factor in determining whether an individual is acting in a managerial or executive capacity, U.S. Citizenship and Immigration Services (USClS) takes into account the reasonable needs of the organization, in light of the overall purpose and stage of development of the organization. See section 101(a)(44)(C) ofthe Act.

II. U.S. EMPLOYMENT IN A MANAGERIAL OR EXECUTIVE CAPACITY

The Director found that the Petitioner did not establish that it was sufticiently operational as of the date of the petition to support the Beneficiary in a managerial or executive capacity. The Director stated that the Petitioner did not demonstrate that it has sufficient subordinate employees to relieve the Beneficiary from primarily performing non-qualifying operational tasks. Further, the Director concluded that the Beneficiary's duties were overly vague and did not convey the actual day-to-day tasks performed by the Beneficiary.

On appeal, the Petitioner asserts that the Beneficiary qualities as a manager and executive, noting that she will handle all Petitioner business matters, including negotiating and signing contracts and seeking out new funding and business opportunities. The Petitioner states that the Beneficiary supervises professional subordinates, including an accountant and an attorney.

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Matter of H-S-, Inc.

When exammmg the managerial or executive capacity of the Beneficiary. \Ve will revie\v the Petitioner's description of the job duties. 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 in a managerial or executive capacity. See 8 C.F.R. ~ 214.2(1)(3 )(ii). Beyond the required description of the job duties, USCIS examines the claimed managerial or executive capacity of a beneficiary. including the company's organizational structure, the duties of a beneficiary's subordinate employees, the presence of other employees to relieve a beneficiary from performing operational duties, the nature of the business, and any other factors that will contribute to understanding a beneficiary's actual duties and role in a business. Accordingly. we will discuss evidence regarding the Beneficiary's job duties along with evidence of the nature of the business and its staffing levels.

A. Duties

Based on the definitions of managerial and executive capacity. the Petitioner must first show that the Beneficiary will perform certain high-level responsibilities. Champion World. Inc. r. INS. 940 F.2d 1533 (9th Cir. 1991) (unpublished table decision). Second. the Petitioner must prove that the Beneficiary will be primarily engaged in managerial or executive duties. as opposed to ordinary operational activities alongside the Petitioner's other employees. See Fami~v Inc. v. US'('/,\', 469 F.3d 1313, 1316 (9th Cir. 2006); Champion World. 940 F.2d 1533.

The Petitioner stated that it was established in the United States to \Vrite. develop. and produce Spanish language animated features. The Petitioner provided documentation indicating that it signed an investment contract with a company, for the development of an animated movie. The Petitioner also submitted evidence reflecting that the company's president was performing script writing services for another production company and provided materials related to a number of other animated features it planned on promoting to the entertainment industry in California.

The Petitioner explained that the company's president was the creative force behind the organization, writing and developing the ideas for its animated features. while the Beneficiary was assigned to handle the business side of the company. The Petitioner indicated that the Beneficiary supervises all project investment opportunities, that she is tasked with creating divisions and departments within the company, that she would direct and support tactical initiatives. monitor and direct the implementation of strategic business plans. develop performance measures. participate in key decisions, implement operational best practices, manage company risk, and monitor legal and accounting issues. The Petitioner stated that the Beneficiary would spend 40% of her time focusing on goal and policy setting. including meeting with staff and the company's president. while another 40% of her time would be devoted to financial controls. f()llowing up on investment leads. ami managing relationships with agents. managers, and lawyers. The Petitioner also indicated that the Beneficiary would spend 20% of her time on employee management. control. and compliance, overseeing hiring and tiring, and managing the company's "routinely employed" contractors.

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Matter of H-S-, Inc.

We agree with the Director that the Petitioner submitted a vague duty description for the Beneficiary that does not convey her actual day-to-day tasks or establish that she would devote her time primarily to managerial or executive duties. The Beneficiary"s duty description includes several general duties that could apply to any executive or manager acting in any business or industry and they do not provide insight into the actual nature of her role. For example, the Petitioner stated that the Beneficiary supports "tactical initiatives." monitors and directs "'strategic business plans:· that she would "develop performance measures." "'participate in key decisions."' ··oversee financial operations." "implement operational best practices."' mitigate the company"s risk profile. follo\>v' up on investment leads, hire and tire employees. and "'negotiate deals." The Petitioner also provides a list of the Beneficiary" s accomplishments during the first year. which arc also vague. such as hiring employees, setting up the company" s banking, hiring agents and managers and maintaining relationships with them, and meeting with staff and third party providers.

The Petitioner provided few examples and little supporting documentation to demonstrate the Beneficiary's performance of these duties. such as tactical initiatives she supports. strategic business policies she implemented, performance measures she has or will develop. key decisions she has made, financial operations she manages, operational best practices she has or will put in place. employees she has hired, or deals she has negotiated. The Petitioner has not clearly articulated what the Beneficiary does on a daily basis. For instance. the Petitioner indicates that a significant portion of the Beneficiary's responsibilities will involve ''negotiating deals" and coordinating with agents on new investment in animation projects: however. it provides only two contracts that the Petitioner has concluded since being established. As such. it is not clear that this responsibility will represent a significant portion of her time. Specifics are clearly an important indication of whether a beneficiary"s duties are primarily executive or managerial in nature. otherwise meeting the definitions would simply be a matter of reiterating the regulations. Fed in Bros. Co .. Ltd 1'. ,\'am. 724 F. Supp. 1103, 1108 (E.D.N.Y. 1989), affd, 905 F.2d 41 (2d. Cir. 1990).

Moreover, several of the Beneficiary's duties appear to focus on non-qualifying operational tasks. For example, the Beneficiary"s duties indicate that she will be responsible for following up on investment leads, managing daily relationships with agents. and exploring funding sources. In fact. the Petitioner states that the Beneficiary will be responsible for all operational aspects of the business, and it has provided few examples and little evidence to substantiate that she \viii delegate these tasks to subordinates.

Even though the Beneficiary holds a senior position within the organization. the fact that she \viii manage or direct a business does not necessarily establish eligibility for classification as an intracompany transferee in a managerial or executive capacity within the meaning of section 10l(a)(44) of the Act. By statute. eligibility for this classification requires that the duties of a position be "primarily" executive or managerial in nature. Sections 101(A)(44)(A) and (B) of the Act. The Beneficiary may exercise discretion over the Petitioner's day-to-day operations and possess the requisite level of authority with respect to discretionary decision-making: however, the position descriptions alone are insufficient to establish that her actual duties would be primarily managerial or executive in nature.

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B. Staffing

The Petitioner provided an organizational chart rc1lecting that the Beneficiary supervises an employee devoted to "administration/writing'' and an accounting employee. Further. the Petitioner also indicates that the Beneficiary will be tasked with overseeing independent contractor agents and attorneys. The Petitioner has referred to the Beneficiary"s position as both executive and managerial, emphasizing that the Beneficiary will oversee professional subordinates. The statutory definition of "managerial capacity"' allows for both '"personnel managers·· and ""function managers:· See section 10l(a)(44)(A)(i) and (ii) of the Act. Personnel managers arc required to primarily supervise and control the work of other supervisory. professional. or managerial employees. The statute plainly states that a ··tirst 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.''2 Section 10l(a)(44)(A) ofthe Act. If a petitioner claims that a beneficiary directly supervises other employees, those subordinate employees must he supervisory. professional. or managerial, and the beneficiary must have the authority to hire and fire those employees. or recommend those actions. and take other personnel actions. Sections I 01 (a)( 44 )(A)(ii )-(iii) of the Act.

First, it is noteworthy that the Petitioner does not assert that the Beneficiary supervises managerial subordinates: as such. a determination as to whether she qualities as a personnel manager hinges on whether she oversees professional subordinates.

The Petitioner has not submitted sufficient supporting evidence to demonstrate that the Beneficiary will supervise professional subordinates under the extended petition. As noted. the Petitioner asserts that the Beneficiary will oversee an accounting employee and an employee devoted to writing, design, and other administrative duties. However. the Petitioner did not submit sufficient supporting documentation to substantiate the employment of these subordinates. The Petitioner provided payroll documentation and 2016 IRS W-2 Wage and Tax Statements reflecting that it paid each employee only $800 during that year. Otherwise, the Petitioner submits no other supporting documentation to demonstrate the continued employl)1ent of the Beneficiary's direct subordinates.

Likewise, although the Petitioner states that both of the Beneficiary's subordinates have bachelor's degrees, it does not support this statement with evidence or identify the degrees these employees hold. The Petitioner also provides no evidence reflecting the Beneficiary's delegation of non­qualifying operational duties to these asserted subordinates. Indeed. the Petitioner vaguely indicates that the Beneficiary only delegates "some'' of her duties to these subordinates. hut does not explain

2 To detem1ine whether the Beneficiary manages professional employees. we must evaluate whether the ~ubordinate positions require a baccalaureate degree as a minimum for entry into the field of endeavor. C( 8 C.F.R. ~ 204 . .5(1<..)(2) (defining ''profession·· to mean "any occupation for which a United States baccalaureate degree or its foreign equivalent is the minimum requirement for entry into the occupation''). Section IOI(a)(32) of the Act states that "[t]he term profession shall include but not be limited to architects, engineers, lawyers. physicians. surgeons. and teachers in elementary or secondary schools, colleges, academies, or seminaries."

Matter of H-S-, Inc.

this delegation in detail, describe the duties of her subordinates vvith specificity. or provide supporting documentation demonstrating her delegation of duties to these employees. Indeed. it is questionable that a company earning just over $185.000 in 2016. and with no other identi tied income, would require both a CFO and subordinate accountant to manage its finances. Further. the duties of the designer, writer. and administrative employee include discrepancies that leave question as to her asserted duties. For instance, the Petitioner indicates that this employee trains and supervises "other support staff' and that she liaises between the CFO and the '"creative department.'' However, the submitted evidence does not reflect that the Petitioner has '"other support staff' to train and supervise or that it has a creative department. In sum. the Petitioner has not established that the Beneficiary supervises professional subordinates employed directly with the wmpany.

The Petitioner has also not substantiated the Beneficiary· s supervision of professional independent contractors, which it identified as third party agents. "managers." and attorneys. The Petitioner does not identify these independent contractors by name. explain their duties in detail, submit evidence to reflect the extent they are engaged, or explain how much time the Beneficiary devotes to supervising them. We acknowledge that the Petitioner submitted a letter from a manager at an entertainment agency indicating that this company had been retained to represent the Petitioner with respect to its proposed animation projects; but again. it submits no supporting evidence to corroborate how often the Beneficiary oversees agents or managers from this independent contractor. In short. the Petitioner does not support its assertion that the Beneficiary substantially supervises independent contractor professionals or that these employees significantly relieve her from performing the non­qualifying duties of the business.

Furthermore, the Petitioner vaguely references the Beneficiary's supervisiOn of subordinates working for the foreign employer. However, again, the Petitioner docs not identify these employees or substantiate this assertion with supporting documentation. For instance. the Petitioner does not submit evidence reflecting her delegation of duties to. or supervision oL foreign employees. Further. the Petitioner also does not indicate whether the foreign employees are professionals. or describe or document their level of education.

In sum, the Petitioner has not shown that the Beneficiary's subordinate employees are supervisory. professional, or manageriaL as required by section 10l(a)(44)(A)(ii) of the Act when seeking classification as an L-1 A manager based on the supervision of personnel.

The Petitioner also makes reference to the Beneficiary acting in an executive capacity. The statutory definition of the term "executive capacity" focuses on a person· s elevated position within a complex organizational hierarchy, including major components or functions of the organization. and that person's authority to direct the organization. Section 101(a)(44)(B) ofthc Act. Under the statute, a beneficiary must have the ability to '"direct the management'" and ··establish the goals and policies" of that organization. Inherent to the definition, the organization must have a subordinate level of managerial employees for a beneficiary to direct and they must primarily focus on the broad goals and policies of the organization rather than the day-to-day operations of the enterprise. An individual will not be deemed an executive under the statute simply because they have an executive

Matter of H-S-. Inc.

title or because they "direct" the enterprise as the owner or sole managerial employee. A beneficiary must also exercise ''wide latitude in discretionary decision making'" and receive only "'general supervision or direction from higher level executives, the hoard of directors, or stockholders of the organization.'' !d.

Here, even though the Beneficiary has the appropriate level of authority, the Petitioner has not established that, as of the date of filing, she was primarily concerned with the broad policies and goals of the organization, that the day-to-day management rested with a subordinate tier of management, or that she would be relieved from substantial involvement in the day-to-day operations of the business. We acknowledge that a company's size alone may not he the determining factor in denying an L-1 A visa petition without taking into account the reasonable needs ofthe organization. See section 10l(a)(44)(C) of the Act. However. it is appropriate for USCIS to consider the size of the petitioning company in conjunction with other relevant factors, such as the absence of employees who would perform the non-managerial or non-executive operations of the company. Family Inc., 469 F.3d 1313; Systronics Corp. r. INS. 153 F. Supp. 2d 7. 15 (D.D.C. 2001 ).

As discussed, the Petitioner did not consistently or sufficiently describe the Beneficiary's duties and we cannot determine that her role would primarily involve executive-level tasks. Further. the Petitioner indicates that the Beneficiary will be involved in all operational matters of the business and it has submitted little evidence to indicate that she will delegate operational tasks to subordinates. In addition, the Petitioner has not demonstrated that the Beneficiary has managerial or professional subordinates as of the date of the petition, or that her claimed subordinates v-. ould relieve her from performing non-qualifying operational duties. As such. the evidence does not demonstrate that the Beneficiary would act in a qualifying executive capacity.

Furthermore, the submitted evidence does not reflect that the Petitioner has developed sufficiently during the first year to support the Beneficiary in a managerial or executive capacity. The Petitioner states that it has two contracts in place currently, an investment agreement dated in December 2016 indicating that a company has agreed to invest approximately $1.5 million on an animated film project and a "Writer's Agreement'' dated in June 2016 retlecting that the president of the company. identified as the creative force behind the company's proposed animation projects. has agreed to write a screenplay for a production company.

However, the Petitioner submits no evidence that these two agreements represent continuous operation on the part of the company. For instance. the investment agreement provides that the Petitioner produce an animated feature for the investor within 14 months of the execution of the agreement, or by August 2017. The agreement also indicates that the investment would cover the Petitioner"s payroll and other administrative expenses while producing the animated movie. Despite this timetable, the Petitioner provides little evidence to demonstrate that it is actively producing an animated movie or that it has received the committed investment amount. It is notable that the appeal was filed in June 2017 and the Petitioner submits no evidence to indicate that it is finalizing the production of an animated movie consistent with the above referenced investment agreement. In

Matter of H-S-. Inc.

addition, the Petitioner submits a balance sheet and tax documentation reflecting that the company earned approximately $185,000 in 2016, but otherwise submits no supporting documentation to substantiate that it is continuously providing goods and services or operating as necessary to support the Beneficiary in a managerial or executive capacity.

Therefore, in conclusion, the Petitioner has not established that the Beneficiary vvi II act as a personnel manager overseeing professional subordinates or that she will act in an executive capacity. The Petitioner has not demonstrated that the Beneficiary has subordinates that relieve her fl·om being primarily engaged in operational aspects of the business. Further, the Petitioner did not submit sufficient evidence to substantiate that it has developed sufficiently during the first year to support the Beneficiary in a qualifying managerial or executive capacity. For these reasons. the appeal will be dismissed.

III. DOING BUSINESS

Beyond the decision of the Director, we find that the Petitioner bas also not demonstrated that it is doing business as required by the regulations. When a petition indicates that a beneficiary is coming to the United States to open a "new office,'' the petitioner must show that it is ready to commence doing business immediately upon approval. At the time of tiling the petition to open a "new office." a petitioner must demonstrate that it has acquired sut1icient physical premises to commence business, that it has the financial ability to commence doing business in the United States. and that it will support the beneficiary in a managerial or executive position vvithin one year of approval. 5-.'ee 8 C.F.R. § 214.2(1)(3)(v). If approved, a beneficiary is granted a one-year period of stay to open the "new office.'' 8 C.F.R. § 214.2(1)(7)(i)(A)(3). At the end of the one-year period. when a petitioner seeks an extension of the "new office'' petition, the regulation at 8 C.F.R. § 214.2(1)(l4)(ii)(B) requires a petitioner to demonstrate that it has been doing business "for the previous year" through the regular. systematic, and continuous provision of goods or services. 5,'ee 8 C.F.R. § 214.2(1)(1)(ii)(H) (defining the term '·doing business''). The mere presence of an agent or office of the qualifying organization will not suffice. !d.

As we have discussed in the previous section. the Petitioner has not submitted sufficient evidence to indicate that the Petitioner was regularly, systematically. and continuously providing goods or services as of the date of the petition. Although the Petitioner has provided an agreement indicating that it received an investment commitment for the production of an animated feature. it has not substantiated that this project is moving forward as of the date of the petition. In addition. the Petitioner further provided an agreement reflecting that the company's president would provide screen writing services for a production company. However, this evidence is not sullicicnt to demonstrate that the Petitioner was systematically providing goods and services as of the date or the petition for extension. For this additional reason, the petition is not approvable.

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IV. CONCLUSION

The appeal must be dismissed as the Petitioner did not establish that it will employ the Beneficiary in a managerial or executive capacity under the extended petition or that it was doing business as of the date of the petition.

ORDER: The appeal is dismissed.

Cite as Matter of H-S-. Inc., ID# 783001 (AAO Nov. 28. 2017)

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