MATTER OF L-&R- INC.

Non-Precedent Decision of the Administrative Appeals Office

DATE: JAN. 15, 2019

MOTION ON ADMlNISTRA TIVE APPEALS OFFICE DECISION

PETITION: FORM 1-140, IMMIGRANT PETITlON FOR ALIEN WORKER

The Petitioner, an accounting services provider, seeks to permanently employ the Beneficiary as its chief executive officer (CEO) under the first preference immigrant classification for multinational executives or managers. Immigration and Nationality Act (the Act) section 203(b)(l )(C), 8 U.S.C. § 1 l 53(b)(I )(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 Texas Service Center denied the petition on multiple grounds. We dismissed the Petitioner's appeal from that decision, finding that it had not overcome all grounds for denial. Specifically, we found that _the Petitioner had not established that it. would employ the Beneficiary in an executive capacity in the United States.

The matter is now before us on a motion.to reopen. On motion, the Petitioner submitted additional evidence regarding the Beneficiary's job duties and explained that it relies on contractors and its foreign atliliate's staff to perform various business functions. We reopened the Petitioner's appeal, issued a request for evidence (RFE), and have incorporated the Petitioner's timely response into the record.

Upon review, and having already reopened the proceeding, we will affirm our decision to dismiss . the appeal.

I. LEGAL FRAMEWORK

An immigrant visa is available to a beneficiary who, in the three years preceding the filing 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 affiliate. Section 203(b)(l )(C) of the Act.

The Form 1-140, Immigrant Petition for Alien Worker, 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 beneficiary is coming to work in the United States for the

Matter of l-&R- Inc.

same employer or a subsidiary or affiliate of the foreign employer, and that the prospective U.S. employ~r has been doing business for at least one year. See 8 C.F.R. § 204.50)(3).

II. U.S. EMPLOYMENT IN AN EXECUTIVE CAPACITY

The Petitioner has consistently claimed that the Beneficiary will be employed m an executive capacity in the United States and that is the pr.imary issue before us on motion.

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) of the Act, 8 LJ.S.C. § I I0l(a)(44)(B).

We review both the beneficiary's stated job duties and the totality of the evidence when examining the claimed executive capacity of a given 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.

A. Business Activities and Staffing

The Petitioner states that it derives its income from four revenue streams, noting that it provides: (I) cloud-based accountancy services offered by subscription; (2) back office accounting, bookkeeping and taxation services for clients of its United Kingdom affiliate; (3) tax return preparation services for its affiliate's clients; and (4) projects for "direct clients." ·

We dismissed the Petitioner's appeal, in part, based on a finding that it did not establish that it had sufficient employees or other staff available to relieve the Beneficiary from significant involvement in the non-executive, day-to-day operations of the company. The Beneficiary had .three subordinates at the time of filing in November 2016, but one of them, the head of accounting, left the company on December 1, 2016. The departure of this employee (who has not since been replaced) left the Petitioner with no accounting staff in the United States to provide the company's services. We further found that the Petitioner did not submit credible position descriptions for the two remaining employees subordinate to the Beneficiary.

On motion, the Petitioner explained that its essential functions are accounting services, tax services, client services, account management, technology, website development and functionality, brand development, market research sales, recruitment and human resources, and the company's own internal accounting. It submitted a statement explaining who was responsible for each function at both the time of filing the petition in November 2016 and at the time it filed the motion in May 20 I 8. The Petitioner indicated that many functions were outsourced or performed by employees of

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the foreign affiliate. It also explained that expansion plans for its cloud-based accounting services had been put on hold due to uncertainty regarding the Beneficiary's permanent residence process. The Petitioner continues to_ employ only three staff: including the Benefi~iary.

We found that the new evidence and information submitted in support of the motion addressed some of the evidentiary deficiencies in the record, but also raised additional questi.ons regarding the Petitioner's business operations and its ability to support an executive position. Accordingly, we_ issued an RFE, in which we observed that although the Petitioner indicated that it had eight clients subscribed to its cloud-based accountancy services in 2016, it derived most of its income from provision of "back office accounting, bookkeeping and taxati9n services"· for its U.K. affiliate's clients, for which it bills its affiliate on a mpnthly basis, and preparation of United Kingdom personal tax returns, for which it bills its affiliate on a per return basis. In its statements submitted on motion, the Petitioner indicated that the foreign affiliate's own employees actually perform and supervise the accounting and bookkeeping and taxation services for the affiliate's clients, notwithstanding the fact that the Petitioner issues-its affiliate an invoice for providing these services. Further, the Petitioner explained that the tax return preparation services, although billed by the Petitioner as a service provided to its affiliate, are carried out by an Indian accounting firm, whose work is overseen by the U.K. affiliate's own staff

In order to gain a better understanding of what specific services the Petitioner actually provides, we requested copies of the Petitioner's 2017 tax returns, general ledgers for 2017 and 2018, copies of invoices the Petitioner issued in 20 I 7 and 20 I 8, and evidence of coordination of activities between the United States and United Kingdom offices.

The evidence submitted in response to our RFE reflects that the Petitioner did not bill any new clients for cloud-based accounting services in 20 I 7 or 2018, despite the fact that it continues to claim that it has eight clients subscribed to its services. Nor does the record show that the clients who subscribed to the service in 2016 were later billed for renewing their subscriptions. There is insufficient evidence in the record to establish that the Petitioner's cloud-based accounting service offering currently has any clients. ·

All income reported on the Petitioner's 2017 general ledger, with the exception of one incoming payment for $9,900, was paid to the Petitioner by its foreign atliliate for back office accounting bookkeeping and taxation services· or for preparation of U.K. tax returns. However, the Petitioner has not shown that it actually performed any back office accounting, bookkeeping, or taxation services, as these.are performed by its affiliale's own accounting stan: and overs~en by the affiliate's' own client services manager, for the affiliate's own clients. It is unclear ,vhy the Petitioner garners revenue from these _services when it has no apparent involvement in the actual provision of services or communication with the end client; its role appears to be limited to issuing invoices to its foreign afiiliate for the services that the affiliate directly provides.

The Petitioner submitted a letter from its general services manager, addressed to the foreign-entity, setting (?Ut the services the Petitioner provides to its affiliate and states that "[the foreign entity J

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should liaise with the administrative staff of [the Petitioner] (and where necessary any subcontractors of [the Petitioner]) with respect to coordinating work and provision of documents." We specifically requested evidence of the coordination of services between the two companies but the Petitioner has not responded to this request. Based on the Petitioner's acknowledgement that the foreign staff actually perfonn the services that the Petitioner agreed to perform, it is unclear what' work is left for the Petitioner to perform. While there may be some reasonable business purpose for this arrangement, the record does not establish that the Petitioner is actually involved in providing the claimed "back office accounting, bookkeeping, and taxation services" for its affiliate.

Similarly, the Petitioner has not established that it actually prepares U.K. personal tax returns as a service to its foreign affiliate . The record establishes that an Indian firm prepares the tax returns under the supervision of the foreign entity's head of client services. The Petitioner' s role in the transaction appears to be limited to billing the foreign affiliate $300 per completed tax return, and paying $30.00 per completed tax return. While the P~titioner submitted an agreement to which it, and the foreign entity are all parties, it is unclear why the foreign entity opts to outsource this business activity to the Petitioner on paper, rather than simply paying directly for the services that provides to the foreign entity's clients under the foreign entity's supervision. Again, the Petitioner did not respond to our request for evidence of coordination of services between it and its foreign affiliate and the Petitioner's role in preparing the tax returns appears to be limited to billing its foreign entity and paying fees.

Finally, we have reviewed the newly submitted evidence for documentation of the Petitioner's "project" work for "direct clients." In the 2017 calendar year, the Petitioner issued a single invoice to a U.K. client for its involvement in the client's "company restructuring." All other invoices were issued to the U.K. affiliate for the above referenced tax preparation and back office accounting services. In the first quarter of 2018, the Petitioner issued two similar invoices for "company restructuring" services provided to United Kingdom clients who are also listed as clients of its affiliate. It is unknown who actually performed these services as the Petitioner still docs 11·01 employ any accounting staff. If the foreign entity actually provided these services, then, again, it is unclear why the Petitioner issued the invoice and received payment for providing such services. The most recent evidence related to this area of activity is dated in March 2018.

' Overall, while the evidence submitted on motion clarifies who provides the accounting services that are claimed to be offered by the Petitioning company, the staffing arrangement describ-ed in the record reflects that the Petitioner is not actually_ responsible for performing any accounting services. The Beneficiary's oversight of foreign staff that provide accounting services for the foreign entity's clients cannot be deemed·an executive duty performed for the petitioning company. ·

The Petitioner's motion to reopen also included evidence related to other contractors or service providers including: which provides a hosted server and manages email accounts for the foreign affiliate (and the Petitioner); which states that it provides the Petitioner with brand development and website services; which assisted the Beneficiary with strategic-level planning and implementation of its remote accountancy services

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business model in 2015 and 2016; and CPA, who states that the Beneficiary continues to consult with him about the hiring and growth plan for the Petitioner. The record does not contain sufficient evidence that the Petitioner continues working with any of these providers or reflect any payments to them subsequent to the filing of the petition.

. . . The Petitioner also submitted a letter from its former head of accounting, who states that she left the company "due to uncertainty surrounding [the Beneficiary's] US immigration status," and states that she expects to return to· handle "accounting services, tax services, client services account management and technology," when the Beneficiary becomes a permanent resident, and will build a team at that time. In addition, the Petitioner submitted a letter from an individual who was recruited for a "head of sales" position, but not expected to join until the Beneficiary's .;immigration situation" is resolved. However, the Petitioner must establish that all eligibility requirements for the immigration. benefit have been satisfied from the time of the filing and continuing through adjudication. 8 C.F.R. § 103 .2(b)(l). Reliance on future hiring plans does not satisfy this requirement.

In response to our RFE, the Petitioner also submitted evidence related to a hew affiliated United Kingdom company, which was established in 2018 and employs the Beneficiary as its chief executive. Although the Petitioner submits evidence related to activities and staffing, the Beneficiary's oversight of this company does not meet the Petitioner's burden to establish that it will employ the Beneficiary in an executive capacity in the United States.

( .

Finally, the Petitioner has documented its continued employment of its head of online marketing/brand manager and' general services manager. We noted in our RFE that it appears that the general services manager also works as the property manager for the Petitioner's buildi.ng, while the head of online marketing appears on the foreign entity's organizational chart as an administrator. We asked the Petitioner to confirm their concurrent employment with other entities and indicate how much time each employee dedicates to the petitioning company.

In response, the Petitioner states that the general service manager owns the building where the Petitioner's· office is located, is onsite at the location full-time, and that '-'her services to [the Petitioner] are of such a scope and frequency as to relive the Be_neficiary from any non-qualifying duties." Initially, at the time of filing, the l~etitioner indicated that the general services manager, manages the "administration department," supervises human resources (hiring/firing/payroll/ benefits), is responsible for internal bookkeeping and accounting and facilities management, recruits personnel for the administration, marketing, and IT departments, and would eventually supervise a secretary. On motion, in describing the staffing of each of the company's essential functions, the only function attributed to the general services manager is the human resources function, including duties such as writing job descriptions, placing recruitment ads, and short listing candidates. However the Petitioner has not hired any staff in the last two years. Further, the Petitioner indicates that the foreign entity's staff performs its internal bookkeeping and accounting, functions that it previously attributed to the general services manager. Although this employee remains on the payroll , it is unclear what specific functions she performs or how much time she devotes to the

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Matter of l-&R- Inc.

company. The Petitioner's statement that she works frequently enough to relieve the Beneficiary from "any non-qualifying duties" is not suffi_cient.

The Petitioner has also confirmed that its head of online marketing divides his time between this position and a position as the foreign afftliate's company secretary and administration. [n 2017, the Petitioner paid him $20,000 and the foreign entity paid him £12,000. The Petitioner states that the amount of time he spends performing duties for each company varies but that he spends more time overall on work performed for the U.S. company. At the time of tiling, the Petitioner stated that the head of online marketing researches local , state, and national market conditions, gathers competitor information, develops pricing strategies, monitors trends, and supp011s the refinement of the company's service vision. On motion, the Petitioner indicated that the head of online,marketing is currently responsible for website development/functionality and brand development (performed by outsourced provider and performs market research to prepare lists of potential clients. As noted, the Petitioner has not submitted evidence of any recent · payments to

The Petitioner pointed out that it has "minimal sales function as revenue has so far come from back office work of [the foreign affiliate] and some direct instructions for [the foreign affiliate's] clients." Therefore, it is not entirely clear what this employee does on a day-to-day basis given that the company's marketing activities appear to be very limited in scope.

Overall, the evidence submitted on motion and in response to our RFE does not establish that the Petitioner has sufficiently. developed to support the Beneficiary in an executive capacity as of the date of filing or at any time subsequent to that date. We acknowledge that the .Petitioner cites to Maffer <?f Z-A-: Inc., Adopted Decision 2016-02 (AAO Apr. 14, 2016) in support of its claim that a U.S. company's size alone is not dispositive in determining eligibility" for a multinational executive or manager. The Petitioner emphasizes that the reasonable needs of the organization as a whole, including any related entities within the qualifying organization, should be given consideration.

The Petitioner's stated purpose at the time of filing was to provide subscription cloud-based accounting services through its own website and with its own team of employees, and to supplement that income by providing back office accounting and tax ·preparation services for its foreign affiliate. The Petitioner concedes that its hiring and expansion plans for the cloud-based services have been put on hold pending completion of the Beneficiary's permanent residence process, notwithstanding the Beneficiary's ongoing nonimmigrant status authorizing him to work for the company in the United States. Its sole accounting employee left the company and was not repiaced, and the back office accounting and tax preparation services that it claims to provide for its foreign affiliate are actually performed or overseen by the foreign affiliate itscl f and not by the Petitioner.

If the Petitioner established that it had its own clients and relied on the foreign entity's staff to assist with the provision of services to those clients, then it wouid be reasonable to consider the foreign entity's personnel in our assessment of the Petitioner's organizational structure. However, that is not the case here, where the foreign affiliate is the Petitioner's primary "client" and the Petitioner does not actually provide or supervision the provision of services for which it bills its affiliate. Further,

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Matter<?/ L-&R- Inc.

we emphasize that our conclusion here is .not based on the Petitioner's size, but rather on the lack of evidence that the company has sufficient operational activities to support an executive position.

While we recognize the Beneficiary's continued ·1eadersh1p of foreign comp_anies engaged in the provision of services to U.K. clients, the Petitioner cannot establish his cl_igibility for the benefit sought by stating that he will oversee the staff and activities of these companies while based in the United States. The Petitioner itself must demonstrate "that it can support an executive position.

B. Duties

In our dismissal order, we determined that the Petitioner had provided only a broad overview of the Beneficiary's general responsibilities and level of authority, without specifying the nature of his day­to-day tasks as its CEO. We further found that, while the Petitioner offered few examples to substantiate the Beneficiary' s claimed executive duties, the record contained ~vidence of his performance of non-executive tasks such as participating in networking events, fonnulating and approving blog posts and written notes to customers, conducting ·marketing research, and perfom1ing other administrative functions . As the Petitioner did not quantify how the Beneficiary would allocate his time between specific executive and non-executive. functions, we found the submitted position description insufficient to demonstrate that his actual duties would be pri'marily executive in_ nature.

In response to the RFE we issued upon reopening the appeal, the Beneficiary submits a declaration explaining that ·he allocates I 00% of his time to executive duties related to his oversight of the Petitioner, its U.K. affiliate and the new U.K. affiliate, established in 2018. Specifically, the Beneficiary states that he allocates 25% of his overall time in a typical month, to the Petitioner's company management (30%), business development (45%), and staff management (25%). He indicates that he allocates 55% of his remaining time to

and 20% to

The Beneficiary states that his "company management" duties include refining the Petitioner's company technology platforms, representing the company to . external technology suppliers· and holding authority over trial and/or purchase terms, performing quality control reviews of the Petitioner's work, representing the Petitioner to banking partners and tax specialists on an ad­hoc/intermittent basis, meeting with the Petitioner's employees twice monthly to discuss management, business, marketing and branding issues, and meeting with U.K. staff and department heads "looking afl:er" the Petitioner's business.

With respect to the his "business development" duties, the Beneficiary states that he: reviews and approves all website changes and marketing materials prepared by determines important/topical issues for blog posts and articles; liaises with copywriters and PR agents

reviews and approves all blog posts, articles and social media posts prepared by either the Petitioner' s employees or drai1s, edits and publishes articles; represents the company in meetings lunches and other public events; and seeks opportunities to

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partner with ·other businesses including banks, financial planners, and accountants in order to grow the business.

Finally, the Beneficiary states that his "staff management" duties include executive oversight of the Petitioner's senior start: determining opportunities for employee learning and continuing professional education, and regularly assessing staffing requirements.

The duties as described appears to be based on an assumption that the Petitioner is actively engaged in providing its subscription-based remote accountancy and other accounting services, as well as marketing, promoting and selling its services, and continuing to recruit U.S. staff while constantly improving its technology platform. For the reasons discussed above, the record does not show that

·the Petitioner is engaged in any of these activities. For example, the record does not support a claim that the Beneficiary is continuously responsible for "refining" technology platforms or that the company has regular dealings with technology suppliers, particularly as the Petitioner concedes that it is not attempting to grow its cloud-based accounting service business. It is unclear what type of work the Petitioner produces for the. Beneficiary to review, or what business and marketing issues arise for a company that is minimally engaged in marketing, selling, or providing services.

As a result, we cannot determine that this is a credible description of the Beneficiary's duties as of the date of filing and continuing to the present time. The Petitioner states that it opted to put its development on hold pending an approval of the Beneficiary's permanent residence application, but, as discussed, the Beneficiary remains authorized to work in the United States. The Petitioner cannot establish eligibility for the benefit sought based on a set of speculative duties that the Beneficiary would only perfonn upon becoming a permanent resident. Based on the level of activities as described in the record, it is unclear that the Petitioner requires the beneficiary to perform the stated duties or to devote the claimed 25% of his time to the U.S.-based business. We cannot determine what executive duties the Petition~r would reasonably require him to perform given that the company is not actively providing services on a regular basis.

The Beneficiary's oversight over his wholly- and majority-owned group of companies is not iri question and we recognized in our prior decision that he acted in a qualifying executive capacity with respect to the foreign entities. t-kiwever, the fact that the Beneficiary will manage or direct a business as its owner and senior employee does not necessarily establish eligibility for classification as a multinational executive. By statute, eligibility for this classification requires that the duties of a position be "primarily" executive in nature. Sections 101(A)(44)(B) of the Act. Even though the Beneficia~y may exercise discretion over the Petitioner's limited day-to-day operations and possess the requisite_ level of authority with respect to discretionary decision-making, the totality of the record must support the Petitioner's claim that it had and continues to have a reasonable need for the permanent executive position it offered to him and the ability to support the executive position.

For the foregoing reasons, the Petitioner has not established that it will employ the Beneficiary in an executive capacity. ·

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Matter of L-&R- Inc.

m. DOING BUSINESS

The Director originally denied the petition, in part, based on a finding that the Petitioner did not establish that it was doing business as defined in the regulations for at least one year prior to filing

• the petition in November 2016. ·we withdrew that determination, noting that the record included "ledgers, invoices and bank statements reflecting its provision of bookkeeping and other accounting services for several small business in the· United States."

Doing business means the regular, systematic, and continuous provision of goods and/or services by a firm, corporation, or other entity and does not include the mere presence of an agent or otlice. 8 C.F.R. § 204.5(i)(2).

As discussed above, the evidence submitted on motion and in response to our RFE does not show that the Petitioner continues to be engaged in the regular, systematic, and continuous provision of services since the date of filing. Although the Petitioner states that it provides services to its affiliate, the Petitioner only bills the foreign entity for these services, which are actually provided by the foreign entity directly, or by a contractor under the foreign entity's supervision. The fact that the Petitioner issues the invoice and collects the payment is not sufficient to show that it is actually providing a service to the foreign entity.

The Petitioner has not documented its on-going provision of.cloud-based accountancy services to clients who subscribed in 2016 or any new clients in this sector. Lastly, while the record contains evidence that the Petitioner has billed three U.K. clients directly for services provided, these transactions have not occurred regularly. The Petitioner issued a total of only three invoices to such clients between January 2017 and September 2018. ·Accordingly, the Petitioner has not established that it continues to do business as defined in the '.egulations.

IV. CONCLUSION

Our decision to dismiss the appeal is affirmed because the Petitioner has not established that the Beneficiary will be employed in the United States in an executive capacity or that it continues to do business as defined in the regulations.

ORDER: The appeal is dismissed.

Cite as Mauer<~( l-&R- Inc., ID# 1731697 (AAO Jan. 15, 2019)

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