The L-1 Is An Economic Asset For The U.S. –But Currently Policies Are Undermining It

The Intracompany Transferee for Specialized Knowledge, Managerial and Executive Employees (or L-1) visa is one of the foundational mechanisms that supports the United States' position as a global hub for high-growth, high-value multinational enterprise activity by allowing corporations to move talent from overseas locations to the US. When the L-1 system functions well, the United States becomes the natural location for advanced operations. When it breaks down, multinational firms recalibrate: shifting work, projects, and sometimes entire production lines to locations where talent mobility faces fewer obstacles. In 2025, a series of restrictive policy changes and systemic bottlenecks have pushed the L-1 category into crisis, threatening the very advantages it once created.

The L-1 program, established in the 1970s, is unique to other non-immigrant visa programs. Unlike the H-1B program, it does not have an annual cap or a restricted filing window. Employers can submit petitions directly to USCIS, and in many cases, employees may apply for the visa directly at a U.S. consulate abroad. This flexibility makes the L-1 visa a key tool for multinational firms seeking to relocate managers, executives, and employees with specialized knowledge to the United States efficiently.

Despite the L-1 program's economic importance, empirical studies have not yet isolated its effects, so the program's exact impact on the U.S. economy remains largely unknown. Most quantitative studies treat high-skilled immigration as a single category and do not distinguish between different visa types such as L-1, H-1B, or O-1. Nevertheless, research has established a direct link between multinational production, decision making, and ease of high-skilled immigration. For example, in his Richmond Fed working paper, Nicolas Morales develops a structural, general-equilibrium model to examine how high-skill immigration and multinational enterprise (MNE) activity interact and concludes that workforce mobility is a foundational factor for MNEs in selecting sites of production.¹ Although the model is not L-1 specific, it supports the broader conclusion that eased managerial mobility, such as that facilitated by the L-1 program, is at the core of MNE behavior.

Historical trends reinforce this link. The L-1 program was introduced at a time when U.S. inward foreign direct investment (FDI) was beginning to accelerate. According to the Organization for Economic Co-Operation and Development (OECD), the United States' inward FDI position rose sharply, from $14.9 billion (1.2% of GNP) in 1972 to $83 billion (3.0% of GNP) by 1980.² Although multiple factors contributed to this growth, the introduction of the L-1 program likely facilitated the quick transfer of key personnel, enabling foreign firms to expand operations efficiently making the US ideally suited for multinational enterprise expansion.

2025 Policy Changes

Despite the clear economic importance, the L-1 program faced unprecedented disruption in 2025. Processing delays, heightened scrutiny at consulates, and inconsistent adjudication have slowed the transfer of key personnel, leaving multinational firms unable to deploy executives, managers, and specialized knowledge individuals. USCIS has experienced historic backlogs over 2025. USICS data for Q3 indicates that there are currently 11.5 million petitions pending with USCIS.³ From Q1 to Q3, the review time for Form I-129 increased 25%. While many individuals have traditionally leaned on consular appointments to circumvent USCIS backlog, with a slew of new policies, that option is narrowing.

On September 2, 2025, the U.S. Department of State (DOS) ended interview waivers for most non-immigrant categories, including the L-1. Again, on October 1^st, 2025, USCIS updated this policy to make clear that this policy included everyone regardless of age. Whereas previously, those seeking a second or third visa renewal could have the interview waived, this change now requires in-person interviews for the vast majority of L-1 applicants, creating severe bottlenecks at consulates worldwide and producing appointment wait times stretching into several months in key posts.⁴

Additional restrictions have provided even less variety in visa processing options. On September 6^th, 2025, DOS ended third-country nonimmigration visa processing for most applicants.⁵ Individuals are therefore required to travel back to their home country or prove legal residence. Proving legal residence adds complexities to the processes not previously experienced.

Even individuals who technically qualify for third-country exceptions now face their own set of challenges. For example, the U.S. does not conduct routine non-immigrant visa options in Russia. Russian nationals are therefore delegated two options for third country processing, Astana and Warsaw. Poland, however, restricts the entry of Russian nationals. Moreover, a Schengen visa requires a valid U.S. visa, something many L-1 workers in the United States no longer hold, since visa expiration does not affect legal immigration status. As a result, many Russian L-1 employees are forced to apply in Astana, Kazakhstan, a consulate with limited experience processing L-1 cases and correspondingly limited appointment availability. Since Astana processes L-1 visas infrequently, applicants face a complex, limited, and uncertain pathway to obtaining a visa.⁶

The restrictions on third country processing have put increased pressure on not just those consulates with already high-volume L-1 visa processing but those who traditionally process a low volume of L-1 visas. This strain coincides with an administration-wide shift toward heightened scrutiny of employment-based applicants. For example, consulates in India are rescheduling appointments to allow for more social media vetting. Along with the administration's policy shift towards stricter scrutiny of foreign nationals attempting to enter the US for work purposes, this has led to an increased issuance of 221(g) denials for administrative processing. While the issuance of a 221 (g) administrative processing request is not a final denial, it does leave an individual in limbo for extended periods of time, taking anywhere from 60 days to 1 year to resolve. This uncertainty in processing times raises serious operational challenges for L-1 visa holders and their companies as it causes major delays and derails critical time sensitive projects.

These policy changes represent more than bureaucratic inconvenience. They force multinational firms to reevaluate whether the United States remains a reliable environment for deploying critical personnel. Firms must now carefully balance the risks and rewards of U.S. operations, adapt their mobility plans, and build more resilient frameworks for transferring key personnel. The resulting shifts are set to transform the U.S. immigration landscape and its broader economic trajectory for years to come. Unless the United States restores predictability, flexibility, and efficiency to L-1 processing, it will cede ground to global competitors that have already recognized the strategic importance of seamless workforce mobility.

Footnotes

1 Nicolas Morales, 2025. "Understanding the Potential Impact of H-1B Visa Program Changes,"Richmond Fed Economic Brief, Federal Reserve Bank of Richmond, vol. 25(39), October.

2 Organisation for Economic Co-operation and Development, OECD Economic Surveys: United States 1989 28 (1989), https://www.oecd.org/content/dam/oecd/en/publications/reports/1989/01/oecd-economic-surveys-united-states-1989_g1g17151/eco_surveys-usa-1989-en.pdf.

3 https://www.boundless.com/blog/uscis-q2-fy2025-data

4 https://travel.state.gov/content/travel/en/us-visas/visa-information-resources/global-visa-wait-times.html

5 https://bechtel.stanford.edu/news/third-country-visa-application

6 Nonimmigrant Visa Issuances by Post May 2025 (FY 2025) https://travel.state.gov/content/travel/en/legal/visa-law0/visa-statistics/nonimmigrant-visa-statistics/monthly-nonimmigrant-visa-issuances.html

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