U.S. Citizenship and Immigration Services

MATTER OF M-USA LLC

Non-Precedent Decision of the Administrative Appeals Office

DATE: OCT. I L 2017

APPEAL OF NEBRASKA SERVICE CENTER DECISION

PETITION: FORM I-140, IMMIGRANT PETITION FOR ALIEN WORKER

The Petitioner, a real estate development company, seeks to permanently employ the Beneficiary as manager of real estate development under the first preference immigrant classiiication for multinational executives or managers. See Immigration and Nationality Act (the Act) section 203(b)(l)(C), 8 U.S.C. § 1153(b)(l)(C). This classification allows a U.S. employer to permanently transfer a qualified foreign employee to the United States to work in an executive or managerial capacity.

The Director of the Nebraska Service Center denied the petition, concluding that the record did not establish, as required, that: (1) the Petitioner has a qualifying relationship with the Beneficiary's foreign employer; (2) the Petitioner will employ the Beneficiary in the United States in a managerial capacity: and (3) the Beneficiary has been employed abroad in a managerial capacity.

On appeal, the Petitioner submits additional evidence and asserts that the Director erred by not considering evidence that the Petitioner has adequately established common ownership of the two companies and the Beneficiary's managerial capacity at each of them.

Upon de novo review, we will dismiss the appeal, while withdrawing the first ground for denial.

I. LEGAL FRAMEWORK

Section 203(b )(1 )(C) of the Act makes an immigrant visa available to a beneficiary who, in the three years preceding the tiling of the petition, has been employed outside the United States for at least one year in a managerial or executive capacity, and seeks to enter the United States in order to continue to render managerial or executive services to the same employer or to its subsidiary or aftiliate.

A United States employer may tile Form I-140, Immigrant Petition tor Alien Worker, to classify a beneficiary under section 203(b )(1 )(C) of the Act as a multinational executive or manager. This classification does not require a labor certification.

The petition must include a statement from an authorized official of the petitioning United States employer which demonstrates that the beneficiary has been employed abroad in a managerial or executive capacity for at least one year in the three years preceding the filing of the petition. that the

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Matter ofM-USA LLC

beneficiary is coming to work in the United States for the same employer or a subsidiary or affiliate of the foreign employer, and that the prospective U.S. employer has been doing business for at least one year. See 8 C.F.R. § 204.50)(3).

II. QUALIFYING RELATIONSHIP

The Director found that the Petitioner did not establish that it has a qualifying relationship with the Beneficiary's foreign employer, To establish a "qualifying relationship .. under the Act and the regulations, a petitioner must show that the beneficiary's foreign employer and the proposed U.S. employer are the same employer (i.e. a U.S. entity with a foreign ottice) or related as a "parent and subsidiary," in which one entity owns and controls the other, or as ·'at1iliates'' with shared ownership and control. See generally section 203(b)(l)(C) ofthe Act; 8 C.F.R. § 204.5(j)(3)(i)(C).

The record establishes, and the Director did not dispute, that the Petitioner is a limited liability company with the Beneficiary ' s stepmother (whose initials are GKD) as its only single member. At issue is whether GKD has the required ownership and control of The Petitioner described

as "an Irish corporation that is owned by a chain of holding companies ... in which the parent company is 99.9% owned by GKD."

The Petitioner's initial submission established the following chain of ownership:

• GKD holds 999 out of 1000 shares of

• • •

holds both of two shares of holds 999 out of I 000 shares of

(BC) and one of two shares of of both shares.

in trust, with

(formerly ';and (BCPM) each hold

as beneficial owner

In a request for evidence (RFE), the Director noted that the ownership documentation dates from 2010 to 2012, several years before the Petitioner filed the petition in October 2015. The Director asked for more recent evidence to show that the ownership had not changed.

In response, the Petitioner stated that " is the 100% owner of 50% directly and 50% through [the Beneficiary] acting as trustee of a trust for which is the owner... The Petitioner submitted a copy of annual return for the fiscal year ending October 31. 20\5, filed in April 2016. The return indicated that, at the time ofthe previous return (presumably in early 20 15), owned one share of the company and the Beneficiary owned the other share. The return also indicated that the share ownership had not changed since that time. But when the Petitioner filed the petition in October 2015, it did not claim this ownership structure. Instead. it submitted older documents identifying BC and BCPM as the shareholders. The Petitioner did not say when or how trust agreements with BC and BCPM ended. A separate declaration of trust, naming the Beneficiary "as nominee for and on behalf of'' is undated.

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Matter of M- USA LLC

The Director denied the petition, stating that, because the Petitioner submitted incomplete and undated documentation, the Petitioner had not established that a qualifying relationship existed between the Petitioner and at the time of filing. On appeal, the Petitioner submits copies of stock transfer forms, indicating that ' [sic] transferred its share of to on January 25, 2013, and BC transferred its share to the Beneficiary on the same date.

The newly submitted documents are consistent with the annual return tiled in 2016 and included in the RFE response. The Petitioner has not explained why it submitted outdated materials with the petition in 2015, but this omission, while serious, does not inherently outweigh or discredit the documentary evidence that pertains to the ownership structure as of the October 2015 tiling date. The record as a whole, including materials submitted on appeal, establish by a preponderance of the evidence that a qualifying relationship existed at the time of tiling and continued thereafter.

III. EMPLOYMENT IN A MANAGERIAL OR EXECUTIVE CAPACITY

The Director found that the Petitioner did not establish that it will employ the Beneficiary in a managerial capacity. The Director also found that the Petitioner did not establish that the Beneficiary was previously employed abroad in a managerial capacity. The Petitioner does not claim that the Beneficiary will be or has been employed in an executive capacity.

A managerial capacity is an assignment within an organization in which the employee primarily manages the organization, or a department, subdivision, function, or component of the organization, and exercises discretion over the day-to-day operations of the activity or function for which the employee has authority. Section 101(a)(44)(A) ofthe Act, 8 U.S.C. § 1101(a)(44)(A). The statute distinguishes between personnel managers, who supervise and controls the work of other supervisory, professional, or managerial employees, and function managers, who need not directly supervise other employees, but must manage an essential function within the organization, or a department or subdivision of the organization, and function at a senior level within the organizational hierarchy or with respect to the function managed. !d. The Petitioner claims that the Beneficiary has been, and will be, employed as a function manager.

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 (USCIS) must take 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.

A. U.S. Employment in a Managerial or Executive Capacity

The regulation at 8 C.F.R. § 204.5G)(5) requires the Petitioner to submit a statement which indicates that the Beneficiary is to be employed in the United States in a managerial or executive capacity. The statement must clearly describe the duties to be performed by the Beneficiary.

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Matter of M-USA LLC

When examining the executive or managerial capacity of a given beneficiary. we will look first to 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. § 204.5U)(5). Beyond the required description of the job duties, USCIS reviews the totality of the record when examining 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 ofthe business, and any other factors that will contribute to understanding a beneficiary's actual duties and role in a business.

The Petitioner divided the Beneficiary's responsibilities into four categories:

Real Estate Development Function. . . . [T]he beneficiary does not do these activities himself, but manages outside vendors and contractors ... to identify development projects, arrange financing and acquisition. oversee planning and design, arrange construction and construction management and contract for marketing and sale of the product ....

Employee Supervision. Aside from office assistants. the beneficiary does not ... manage employees .... Rather. his job is to assure that the management function is accomplished by planning and overseeing the work of independent contractors ....

Managerial Authority. The beneficiary is autonomous in executing his ma[na]gerial function. He is free to hire and fire office personnel working under his supervision. More important, he enters into and enforces the contractual relationships with all of the vendors that are involved in the execution of each project that we undertake. Selection of projects and development of overall budgets requires [the chief executive officer's] input and sign-off, but implementation is managed by the Beneficiary.

Decisions on Daily Operations. The beneficiary is the decision maker on all matters of supervision and execution of the contracts for the real estate development function. The parties being supervised ... are professionals. such as attorneys, accountants. architects and financial managers; firms with contractual relationships ... ; and real estate brokers ....

Separately, the Petitioner listed the Beneficiary's ··management activities" and the approximate time the Beneficiary devotes to each:

Management Activities Entities Supervised Percentage of Time Identifying suitable sites for Real estate broker, 10% development. architects. accountants,

attorneys Reviewing contracts relating Construction management 5%

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MatterofM-USA LLC

such developments. firms, construction contractors, attorneys

Compiling development Financial institutions, 10% forecasts and analysis and architects, construction reviewing cost estimates and management firms, time schedules. construction contractors Interviewing and selecting Primarily done by 5% suitable project managers for beneficiary with financial specific developments. advisors and Managing

Director Conducting due diligence to Construction management 15% identify key issues, constraints firms, attorneys, and benefits relating to new accountants, architects development projects. Working in tandem with Attorneys, architects, 5% professional consultants and construction management ensuring zoning codes are firms adhered to. Establishing suitable financial Accountants, financial 10% sources for each proposal and institutions selecting the most cost effective option. Assisting senior management Attorneys, real estate 10% in negotiating contract terms brokers and conditions with land owners and agents. Preparing time schedules for Architects, construction 5% projects in line with consultant management firn1s estimated time frames and updating these on an ongoing basis. Overseeing execution of Construction management 15% construction activities. firms, construction

contractors Managing marketing and sale Attorneys, financial 10% of projects. institutions, real estate

brokers

In the RFE, the Director stated that the table of management activities included several non­managerial functions, and did not mention the ··oflice assistants" mentioned in the Petitioner's introductory letter. The Director requested more specific information about the Beneficiary's daily tasks and evidence regarding the company's employees.

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Matter r~f M- U"'A LLC

In response, the Petitioner stated that its only employees are the Beneficiary and the chief executive officer (CEO) who is the Beneficiary's father (also called managing director in some record materials). The Petitioner acknowledged that its earlier ·'cover letter ... inadvertently referred to 'office assistants.' but there are no such employees of the petitioner.'' The reference to a nonexistent staff of "office assistants," and the assertion that the Beneficiary ·'is free to hire and tire oftice personnel working under his supervision," raises questions about the authorship of the earlier letter. The CEO signed the letter, but its actual author was demonstrably not familiar with the company's staffing. 1

In a modified version of the earlier job description, the Petitioner stated: ··The beneficiary is autonomous in executing his managerial function." The Petitioner stated that the Beneficiary is a function manager because "the beneficiary manages the real estate development function of [the petitioning entity] which is essential to its purpose as a development company'' and "oversees the execution of development activities by professionals and ... independent contractor[ s]."

In the denial notice, the Director concluded: "The evidence clearly shows that the beneficiary is doing the work and is not acting in a managerial and/or executive capacity." The Director added that, while contractors may relieve the Beneficiary from performing certain functions. "only the management of employees may be considered a qualifying managerial duty:·

On appeal, the Petitioner states that the Beneficiary's duties, as listed above. "are overwhelming[ly] managerial in that they depend on third parties to carry out the day-to-day performance of the tasks needed to produce the firm· s product.'' The Petitioner asserts that the Beneficiary is a function manager, who manages essential functions of the company by controlling the activities of contractors. The Petitioner adds that, because the Petitioner relies on contractors. the company's small size does not warrant the conclusion that the Beneficiary does the company's work himself.

The fact that the Beneficiary manages or directs a business does not necessarily establish eligibility for classification as an intracompany transferee in a managerial capacity within the meaning of section 10l(a)(44) ofthe Act. By statute, eligibility for this classification requires that the duties of a position be ''primarily'' of a managerial nature. Section 101(A)(44)(A) of the Act. While the Beneficiary may exercise discretion over the Petitioner's day-to-day operations and possesses the requisite level of authority with respect to discretionary decision-making. the position description alone is insufficient to establish that his actual duties, as of the date of tiling. would be primarily managerial in nature.

We also consider the proposed positiOn in light of the nature of the Petitioner's business, its organizational structure, and the availability of staff to carry out the Petitioner's daily operational tasks. Federal courts have generally agreed that, in reviewing the relevance of the number of

1 The Petitioner's attorney of record prepared the Form 1-140 petition. By signing the form. he attested that the information on that form was true to the best of his knowledge. That form indicated that the Petitioner had 25 U.S. employees, rather than two. The Petitioner's attorney has cited no source for the higher figure.

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Matter ofM-USA LLC

employees a Petitioner has, USCIS "may properly consider an organization's small size as one factor in assessing whether its operations are substantial enough to suppm1 a manager."'2 Furthermore. 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 operations ofthe company. See. e.g, Systronics CmJJ. v. INS, 153 F. Supp. 2d 7, 15 (D.D.C. 2001).

The Petitioner is correct that a function manager can perform managerial duties while delegating operational functions to contractors. But the burden is still on the Petitioner to show that the Beneficiary's duties are managerial; it cannot sutlice to assert that the Beneficiary manages contractors. In this case, the Petitioner has not identified any of those contractors except for a payroll company which processes salary payments for the Beneficiary and the CEO. The Petitioner did not submit evidence such as contracts or invoices to establish the nature or extent of the other contract work performed.3 The Petitioner's audited financial statement for 2015 shows that the company paid $121,121 in "professional fees," but the record does not show who received those fees or what services they provided.

The 2015 audited statement indicates that "the Company's $3.013,762 contract revenue reported for the 2015 calendar year was derived from the construction and other services provided to a related company ... pursuant to the Owner-Contractor Agreement dated January 27, 2015." That agreement is not in the record, and therefore we do not know specifically what services the Petitioner agreed to provide. The Petitioner reported ''cost of sales - work-in-progress'' totaling nearly $2.5 million in 2015, but did not show where the money went or what it purchased.

The Petitioner has asserted that the Beneficiary spends 10% of his time ··[i]dentifying suitable sites for development" and 15% of his time on "due diligence ... relating to new development projects.·· but the record identities only one site under development by the Petitioner at the time of tiling in 2015. Specifically, the Petitioner's audited financial statements indicated that the Petitioner derived all of its 2015 revenue from a contract ''to renovate, construct and alter the lobby and surrounding areas" of a property owned by which the audit calls "a related company."' The Petitioner's CEO stated that the company "is managing a high rise project in but did not identify the project and the record provides no further information about it.

The listed duties also include "marketing and sale of projects." but the record does not show any sales. If the Petitioner's only client at the time of filing was "a related company,'' it is not evident that any marketing was necessary in order to secure the contract.

2 Family, Inc. v. U.S. Citi::enship and Immigration Services, 469 F.3d 1313, 1316 (9th Cir. 2006) (citing with approval Republico(Transkeiv. INS, 923 F.2d 175, 178 (D.C. Cir. 1991); Fedin Bros. Co., Ltd. v. Sava, 724 F. Supp. 1103, 1108 (E.D.N.Y. 1989), aff'd, 905 F.2d 41,42 (2d. Cir. 1990); Q Data Consulting. Inc. v. INS, 293 F. Supp. 2d 25,29 (D.D.C. 2003). 3 The record contains a copy of the Petitioner's own registration certificate as a "new horne construction contractor."

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Matter of M-U..'iA LLC

In the absence of more detailed information and corroborating evidence, we are left with only the assertion that the Beneficiary controls the unspecified activities of unidentified contractors. Notwithstanding the Petitioner's submission of a list ofresponsibilities, the record does not establish what the Beneficiary actually does on a day to day basis and whether the Beneficiary will be employed in a managerial capacity, as claimed.

B. Foreign Employment in a Managerial or Executive Capacity

If the Beneficiary is already in the United States working for the foreign employer or its subsidiary or affiliate, then the regulation at 8 C.F.R. § 204.5U)(3)(i)(B) requires the Petitioner to submit a statement from an authorized official of the petitioning United States employer which demonstrates that, in the three years preceding entry as a nonimmigrant, the Beneficiary was employed by the entity abroad for at least one year in a managerial or executive capacity.

The Petitioner' s description of the Beneficiary"s foreign position as manager of real estate operations for is largely identical to the U.S. job description discussed above. but it replaced the last two listed items with " [ s ]upervising construction manager for all construction projects.. and " [m]anaging apartment rentals, while ensuring general maintenance of each apartment.''

The Petitioner submitted payroll documents for other employees, identified as an accountant, a construction manager, and an assistant construction manager. The Petitioner stated that the Beneficiary reported to the "company director and manager of the company, [who was] paid as an independent contractor.'' The Petitioner also asserted that the Beneficiary .. was the sole employee responsible for controlling and directing existing and projected real estate projects. This include[d] managing tenant relationships in existing properties:· As noted above. the Petitioner did not specify who relieved the Beneficiary from performing property management functions. The construction manager would represent a subordinate layer of management with respect to construction activities, but not for other business functions. The Petitioner did not provide detailed job descriptions for the subordinate employees to illustrate their roles with the foreign company.

In the denial notice, the Director noted the similarities between the U.S. and foreign job descriptions. and concluded that the two job descriptions were deficient for many of the same reasons. On appeal, the Petitioner states that it had provided details that the Director did not fully consider, such as the payroll documents for the Beneficiary 's subordinates and the assertion that the Beneficiary .. had complete autonomy in his day-to-day activities."

The Petitioner has identified other workers at but the Petitioner has not shown that these individuals relieved the Beneficiary from primarily performing non-qualifying tasks with that company. As with the Beneficiary's later U.S. employment, the Petitioner has made vague and general references to contractors, but has not submitted evidence to establish the nature and extent of their work on behalfofthe Beneficiary's foreign employer.

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Matter of M-USA LLC

As noted above, the Petitioner stated that the Beneficiary's duties abroad included ''[m]anaging apartment rentals, while ensuring general maintenance of each apartment.·· The Petitioner asserted that the Beneficiary delegated the duties relating to this function to '·[a ]ttorneys, financial institutions, [and] real estate brokers." The Petitioner did not explain how attorneys. financial institutions, and real estate brokers are responsible for property management and maintenance. The Petitioner did not submit copies of contracts or agreements showing who had agreed to perform those functions on behalf. The Petitioner has otTered only the general assertion that the Beneficiary exercises managerial control over an unspecified number of contractors.

As with his subsequent U.S. employment, the Petitioner has not shown that the Beneficiary's foreign employment was in a managerial capacity.

IV. PRIOR APPROVALS

The Petitioner observes that USCIS had previously granted the Beneficiary L-1 A nonimmigrant status. which the Petitioner successfully renewed after the immigrant petition's denial date. The Petitioner acknowledges that the other approvals are not binding on us in the adjudication of the present appeal. but asserts that we should take notice that other petitions were approved with the same evidence. Because the records of proceedings of the approved petitions are not before us. the Petitioner has not shown that the evidence is essentially the same in each petition.

Furthermore, a key distinction between a nonimmigrant petition and an immigrant petition is that the former is for temporary employment, and the latter is for permanent employment. The record does not establish a permanent role for the Beneficiary at the petitioning company. As noted above. at the time of filing, the Petitioner had one construction project with The Petitioner's audited financial statement acknowledged that tiled for bankruptcy in 2015. Even without the bankruptcy, a single construction project is not a viable long-term business model. and the record does not indicate that the Petitioner has undertaken other projects.

Apart from the merits of the petition, the Petitioner asserts that immigration policy should encourage the immigration of job-creating entrepreneurs. The Petitioner does not identify any jobs that it has created for U.S. workers since its founding in 2010. The assertion that the Petitioner will grow and create jobs in the future is speculative and unsupported. The question underlying this proceeding is not what the U.S. government intends to accomplish through its immigration laws and policies. but rather whether this particular petitioner and beneficiary meet the relevant requirements for the benefits sought.

V. ONGOING VIABILITY AND BUSINESS ACTIVITY

We will dismiss the appeal for the reasons described above. Beyond those grounds, the Petitioner's continued viability and business activity are in doubt. While not grounds for this dismissal notice, these issues would nevertheless require attention and resolution in the event that the Petitioner

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Matter of M-USA LLC

chooses to pursue this matter further. As noted above, the Petitioner's only source of income in 2015 was a project for which has declared bankruptcy. 4

Also, the Petitioner's website, identified on the Petitioner's own printed letterhead as does not appear to be active. This information raises questions about the

extent to which the Petitioner remains able to conduct business.

VI. CONCLUSION

The Petitioner established a qualifying relationship with the Beneficiary's former foreign employer, but did not establish that the Beneficiary has been or will be employed in a managerial capacity.

ORDER: The appeal is dismissed.

Cite as Matter of M-USA LLC, lD# 762292 (AAO Oct. II, 20 17)

4 Public records identify the Beneficiary as the only member of See search results tl·om the Connecticut Secretary of the State ' s CONCORD database at https://www.concord-sots.ct.gov/CONCORD/online?sn=Publiclnquiry &eid= (last visited October 4, 20 17).

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