Part 3 of a series on U.S. immigration options for founders and startups. Part 2 examined the International Entrepreneur Parole program.
By: Helena Tetzeli
As previously noted, the U.S. immigration system was not designed with the modern international entrepreneur in mind. A founder can incorporate a U.S. company in minutes, raise money across borders, manage a distributed workforce, and sell to American customers without ever setting foot in an American office. But when that same founder needs authorization to move to the United States and run the business, the options quickly narrow.
That is one reason the L-1 nonimmigrant classification deserves more attention. Unlike the H-1B classification, the L-1 is not subject to an annual numerical cap or registration lottery. Unlike the E-2 classification, eligibility does not depend on holding the nationality of a treaty country. And unlike investor-based classifications, there is no prescribed minimum investment. For an international company establishing or expanding a U.S. operation, that combination is unusual.
It also raises a larger question: Should the L-1 classification be the first immigration category that internationally established founders and companies examine? In some cases, yes. But some features of the classification illustrate both what works, and what is increasingly antiquated, about the U.S. immigration system.
The L-1 Was Built for Multinationals. That Doesn’t Mean Multinationals Have to Be Large.
The L-1 classification allows an international organization to transfer executives, managers, and employees with specialized knowledge to a related U.S. business.
The word “multinational” can be misleading. Nothing about the basic concept requires a Fortune 500 company. A multinational organization can consist of a foreign company and its U.S. parent, subsidiary, branch, or affiliate. A startup, family-owned business, or growing foreign company can therefore potentially fit the model, provided it has the required relationship with a U.S. organization.
That matters because international entrepreneurship often begins outside the United States. A founder may already have employees, customers, and operations abroad before deciding that the next stage of growth requires a U.S. presence. The L-1 classification is one of the few immigration categories that expressly recognizes that reality.
Nor does the U.S. operation necessarily have to be mature. The regulations contemplate a company establishing a “new office” in the United States, allowing a foreign company opening its first U.S. operation potentially to use the L-1 classification from the beginning.
There are two principal L-1 sub-classifications. L-1A allows the transfer of executive and managerial employees and generally permits up to seven years in L-1A status. L-1B allows the transfer of employees with specialized knowledge and generally permits up to five years. In either case, the employee ordinarily must have worked abroad for a qualifying foreign organization for at least one continuous year during the preceding three years in a managerial, executive, or specialized-knowledge position.
For founders, that creates an important dividing line. The L-1 can be remarkably well suited to a founder who has already built a real business overseas and is now expanding it into the United States. It is generally much less useful to someone whose business effectively begins with the U.S. entity and has no real foreign operations.
Describing the L-1 simply as an “entrepreneur visa” therefore misses the point. It is better understood as an international expansion visa that some entrepreneurs can use.
The New-Office Paradox
One commonly used version of the L-1, the “new-office” L-1, exemplifies one of the classification’s more anachronistic aspects.
When the U.S. operation is a start-up, an L-1 petition can be approved under special new-office rules. For an L-1A manager or executive, the initial period is generally limited to one year. The petitioner must therefore show that the new U.S. operation is credible and will be able to support the intended managerial or executive role. That creates a peculiar tension for startups. Immigration law effectively asks a young company to demonstrate organizational development on a timetable that may have little relationship to the timetable on which startups actually develop. A founder may spend the first year raising capital, finding product-market fit, negotiating strategic relationships, and making a handful of critical hires. Those may be precisely the activities a new venture should prioritize.
Yet when the company seeks an extension, the immigration analysis focuses on whether the U.S. operation has developed sufficiently to support a genuinely executive or managerial position rather than one dominated by day-to-day operational work. Those two measures of progress are not necessarily the same. For well-capitalized companies, this can create a counterintuitive strategic question: Is it better to use the new-office procedure immediately, or first build the U.S. operation from abroad or through other authorized personnel and transfer the executive later? The answer is highly fact-dependent, but the question is worth asking before the U.S. expansion begins.
A Visa Designed for a Brick-and-Mortar World
The new-office rules contain another anachronistic feature: the regulations require the petitioning U.S. company to show that it has secured sufficient physical premises to house the new operation. That requirement reflects an era when international expansion generally meant leasing an office and hiring employees who reported there every morning. It fits less comfortably with a post-pandemic business world built around distributed teams, flexible offices, and remote work.
That does not mean every company needs a conventional long-term office lease. Appropriate premises depend on the nature of the business, and flexible or shared arrangements may work depending on the facts. The broader point is that a technology company can be entirely real, capitalized, revenue-generating, employing Americans, and serving U.S. customers, without the kind of physical headquarters that once signaled legitimacy. Yet immigration regulations still sometimes use physical infrastructure as a proxy for business substance.
For general counsel advising a company on U.S. expansion, this is more than a technicality. Corporate structure, hiring plans, office strategy, and immigration strategy should not be siloed and should be addressed holistically since decisions made months before an L-1 filing can affect the strength of the petition.
The Price of Flexibility Is Process
If the L-1 classification is structurally flexible, but can also be procedurally cumbersome. In an individual L-1 case, the U.S. employer generally must first file a petition with U.S. Citizenship and Immigration Services establishing eligibility. An employee who requires a visa can then apply at a U.S. consulate or embassy abroad and, once the visa is issued, seek admission to the United States.
The process can involve close examination of the relationship between the foreign and U.S. companies, the employee’s qualifying foreign employment, and the nature of both the foreign and proposed U.S. positions. New-office cases add another question: not merely what the company is today, but what it can credibly become during the initial approval period.
Large multinational organizations have an alternative in the Blanket L procedure, which can streamline later L applications for eligible employees. But its corporate-structure and business-size requirements mean many startups and smaller international businesses will not qualify.
This produces one of the L-1 classification’s central tradeoffs: broad eligibility in theory, significant evidentiary friction in practice.
The Comparison With H-1B and E-2
The usual comparison among these classifications focuses on their technical requirements. A more interesting comparison may be what each category assumes about the company.
The H-1B classification is fundamentally an employment visa built around a specialty-occupation position, and for many cap-subject private employers, availability can itself be uncertain. The E-2 classification is fundamentally an investment visa. It can be extraordinarily useful for entrepreneurs, but requires treaty nationality and a substantial investment of capital placed at risk.
The L-1 starts from a different premise. It asks whether a genuine business already exists abroad and whether that organization is expanding or deploying personnel into a related U.S. operation.
The three classifications therefore reflect different theories of why a foreign national should be permitted to work in the United States: specialized employment (H-1B), investment (E-2), or multinational business expansion (L-1). For a founder who has already built a company abroad, the third may be the most natural fit—and, in some cases, one of the few viable options.
Should the L-1 Be the Default?
Perhaps not the default. But for founders who have already built genuine businesses abroad, the L-1 may be one of the most natural options. It has no annual quota or lottery. Eligibility is not limited to citizens of treaty countries. And the category is expressly designed around the reality that companies cross borders and bring key people with them.
At the same time, aspects of the L-1 exemplify the often-awkward interplay between U.S. immigration law and modern entrepreneurship. A new-office case asks a young company to develop quickly enough to support an executive or managerial role. The regulations continue to contemplate physical premises in an era of remote and distributed work. And the adjudication process can demand extensive evidence from businesses whose defining characteristic is that they are still evolving.
Perhaps the lesson of the L-1 is therefore larger than the classification itself. The United States has spent decades debating how and failing to create an immigration pathway for entrepreneurs. At the same time, one of its existing classifications already accommodates a significant entrepreneurial class, but only provided they built the company somewhere else first and can navigate a regulatory framework designed for a different business era.
For a country competing to attract international founders, capital, and talent, the L visa offers a path, provided the founder can navigate the constraints of our often outdated immigration laws.
The next and final article in this series will examine the talent and achievement-based visas: the O-1 extraordinary ability non-immigrant visa, the EB-1A extraordinary ability immigrant visa and the EB-2 National Interest Waiver immigrant visa.