Immigration Stability Amidst Corporate Restructuring: U.S. Immigration Service Announces Clarifications for Multinational Managers and Executives

Dorsey & Whitney LLP

Dorsey & Whitney LLP

The U.S. Citizenship and Immigration Service (“USCIS”) recently announced it has adopted an administrative law decision that clarifies issues relating to the transfer of multinational executives and managers from foreign offices to the United States.  This new decision should streamline the immigration aspects of multinational corporate restructurings and mergers.

U.S. immigration law provides a special mechanism for multinational companies to sponsor their overseas executives and managers for U.S. permanent residency (“green cards”), provided those employees worked for a foreign entity with a qualifying relationship to the sponsoring U.S. company for more than one year in the past. This special mechanism is significantly faster than the normal green card sponsorship process, providing U.S. employers with a way to fast-track business-critical managers and executives to U.S. permanent residency.

Key to taking advantage of this mechanism is documenting the qualifying relationship between the foreign entity and sponsoring U.S. employer. USCIS’ recent announcement provides much-needed clarity along two lines:

  1. USCIS confirmed longstanding policy that the qualifying relationship between the U.S. sponsoring entity and the foreign entity must be in existence at the time the immigration petition is filed, and must continue to exist until the petition is adjudicated.
  2. More importantly, for the first time USCIS clarified that if a corporate restructuring affects the foreign entity prior to the filing of the immigration petition, the U.S. sponsor may establish that the qualifying foreign employer continues to exist and do business as a successor-in-interest entity, even if the exact legal entity that employed the foreign national in the past has ceased to exist.

This second aspect of the announcement provides clarity on a point of concern for multinational organizations that utilize this immigration mechanism. Under this new policy, when determining whether a qualifying relationship exists between the foreign and U.S. entity, USCIS will holistically examine whether the foreign successor entity retains the rights, duties and obligations of the prior foreign entity, with no change in substance. The test is akin to the employment successorship test, and is relatively easy to document.

This welcome shift reflects the reality of current business conditions, wherein companies frequently merge, acquire each other, and otherwise change ownership and organizational structure. Given the likely uptick in mergers and corporate restructurings triggered by COVID-19 disruptions, USCIS’ new policy will be relevant for an increasing number of multinational companies and organizations in the coming years.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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