Last reviewed October 7, 2026 · By the NYBACS advisory team
Short answer
A qualifying relationship is the ownership-and-control link L-1 rules require between the foreign employer and the US employer. They must be the same company (a branch), parent and subsidiary, or affiliates owned and controlled by the same parent, the same individual, or the same group of individuals in roughly equal proportions. Ownership and control must both be shown, and the relationship must last for the whole L-1 stay.
Key takeaways
- A parent-subsidiary relationship exists where the parent owns more than 50%, exactly 50% with control, 50% of a 50-50 joint venture with equal control and veto, or under 50% with actual control.
- Affiliates are sister companies owned and controlled by the same parent or individual, or by the same group of people each holding approximately the same share in both.
- Contracts, licensing deals, franchise agreements, non-equity joint ventures and joint ventures below 50-50 do not create a qualifying relationship.
- Changes in ownership or control after approval generally require an amended petition.
- For EB-1C green card purposes, a US branch that is not a separate US legal entity cannot file the petition, even though branches work for L-1.
The four relationship types
| Relationship | What it means | Typical example |
|---|---|---|
| Parent / subsidiary | One entity owns and controls the other under one of the ownership tests | A UK Ltd owns 100% of a Delaware C-Corp |
| Affiliate (common parent or person) | Two entities both owned and controlled by the same parent or the same individual | A founder personally owns 80% of an Indian Pvt Ltd and 80% of a US LLC |
| Affiliate (common group) | Two entities owned and controlled by the same group of people, each holding roughly the same proportion in both | Three partners own 40/30/30 in a Dubai company and 40/30/30 in a US corporation |
| Branch | An operating division or office of the same legal entity in another location | A German GmbH registers to do business in New York without forming a US company |
USCIS treats "ownership" as the legal right of possession with full power and authority to control, and "control" as the right and authority to direct management and operations. Owning more than 50% is treated as evidence of control (de jure control); owning 50% or less can still work if de facto control is proven, for example through board appointment rights or irrevocable voting arrangements.
Set-ups that look related but do not qualify
Commercial closeness is not the same as legal relationship. The following generally fail:
- Distribution, reseller or licensing agreements between independently owned companies.
- Franchises — the franchise agreement governs use of a brand, not ownership; the relationship must instead exist between the foreign entity and the petitioner itself.
- Non-equity joint ventures where no separate entity is formed.
- Joint ventures below 50-50, and 50-50 ventures where the foreign company lacks equal control and veto rights.
- Mismatched group ownership — for example, partners holding 50/50 abroad but 90/10 in the US company. The "approximately the same share" test for group-owned affiliates is applied to each individual.
Ownership held through a holding company can still qualify because the definitions cover indirect ownership, but every link in the chain must be documented.
How ownership and control are proven
USCIS policy states that stock certificates standing alone generally do not establish a qualifying relationship. For a privately held group, expect to provide:
- The US company's stock certificate ledger or membership schedule showing total issued shares and each holder's percentage.
- Bylaws or operating agreement, plus any shareholder, voting or proxy agreements — proxies must be irrevocable from filing to decision.
- Minutes of the board or members approving the share issuance.
- Evidence the ownership interest was acquired: wire transfers, share purchase or subscription agreements.
- The foreign company's registry extract and shareholder register, translated where needed.
- Tax filings that reflect the ownership, such as a US corporation's Form 5472 where it is 25% or more foreign-owned, or a partnership's Form 1065 schedules.
The documents must agree with each other. A ledger showing 1,000 shares issued to the parent, a tax return listing an individual as owner and a bank record showing capital paid by a third party will draw questions.
Keeping the relationship intact after approval
The qualifying relationship is not a one-time test. A related foreign entity must continue doing business, and the relationship must continue for the whole L-1 stay. Events that can break or change it include:
- an investor round that dilutes the parent below control;
- a founder selling part of the foreign company so ownership no longer mirrors the US company;
- a group reorganization, merger or spin-off;
- the foreign company becoming dormant or being wound up.
Changes in approved relationships generally require an amended petition. Before any restructuring or fundraise, check its L-1 effect with immigration counsel, and update the corporate records at the same time so the evidence trail stays complete.
Common mistakes to avoid
- Relying on an exclusive distribution or licensing agreement as if it created a corporate relationship.
- Setting up founder-owned sister companies with different ownership percentages in each.
- Issuing US shares on paper without the parent ever wiring the subscription money.
- Accepting a SAFE conversion or equity round that moves control away from the foreign parent without assessing L-1 impact.
- Assuming a 50-50 joint venture qualifies without equal control and veto rights in its governing documents.
- Relying on a US branch registration for L-1 without considering that a branch cannot file an EB-1C green card petition later.
NYBACS 360° support
How NYBACS helps
- Charts your group's ownership chain, including holding companies, and highlights percentage mismatches before your attorney's review.
- Prepares the US stock ledger, subscription agreements and board minutes, and reconciles them to the parent's capital wire.
- Aligns ownership disclosures across Form 5472, bank KYC files and immigration evidence so each tells the same story.
- Flags corporate events — fundraises, share transfers, reorganizations — that should go to immigration counsel before they happen.
Frequently Asked Questions
Does the foreign company have to be the parent of the US company?
No. The US company can be the parent of the foreign company, the two can be sister affiliates under common ownership, or the US office can be a branch of the foreign company. What matters is that one of the defined relationships exists and can be documented.
Can an individual founder's personal ownership create the relationship?
Yes. If the same individual owns and controls both companies, they are affiliates. The founder must actually control both, and the records for both companies must show it.
Does the US company's salary payment matter for the relationship?
Not for the relationship itself. USCIS treats the source of the employee's salary as generally not controlling. The relationship is about ownership and control of the entities.
What if the parent owns exactly 50% of the US company?
Exactly 50% qualifies if the parent also controls the entity, or if it is a 50-50 joint venture in which the parent has equal control and veto power. The governing documents need to show those rights clearly.
