Read the general business expansion overview
Hypothetical example: a tree and shrub propagation group based in Sainte-Cécile-de-Milton is opening a growing operation in Michigan and intends to fund it through an intercompany loan rather than by subscribing for shares. The transfer of its production manager depends on a new-office petition, which is approved for one year at a time when almost nothing has happened yet. How the money reaches the subsidiary turns out to matter to both the first decision and the second.
What a new office is asked to show at the start
A petition for a new office is decided on evidence of what exists now and what is credibly planned. Sufficient physical premises must have been secured, which means a signed lease or a completed purchase rather than a property under discussion. The petitioner must show that the new entity will support a managerial or executive position within one year, and it must show it has the financial ability to pay the transferee and to commence doing business. Approval is granted for one year, and the extension will be judged on what actually happened during it.
A loan and a subscription do not look the same on a balance sheet
Funding by intercompany loan leaves the subsidiary with a liability and, at the outset, little equity. Funding by share subscription capitalises it. Both are lawful and ordinary, but the second presents a stronger picture of financial ability, particularly where the loan is repayable on demand and could in principle be recalled. If a loan is used, its terms should be documented properly, with a repayment schedule the subsidiary's projections can actually service. An adjudicator reading the accounts should not be left wondering whether the American company could be emptied at the parent's option.
Build the extension file during the year, not at the end of it
The one-year approval is best understood as a period in which the company creates evidence. Payroll records showing staff hired, invoices showing goods sold, the lease being performed, and an organisational chart that has grown real subordinates are all things that either happened or did not. Where hiring runs behind, that is worth knowing in month four rather than in month eleven. The extension asks whether the office is now doing business and whether the transferee is genuinely managing rather than doing the work himself, and both answers are written by the year, not by the petition. Keep the subsidiary's bank statements for the same reason: an entity that never spent what it was lent has an awkward story to tell about capacity.
What else is on your mind?
Does being a business owner or director qualify me for L-1A?What employment history should an L-1 transfer review cover?What makes a new-office L-1A case different?Why does an L-2 spouse’s admission record matter for work?Editorial source review: 2026-09-07. General preparation guidance, not an individual assessment.