Canada as an H-1B Alternative: L-1 Visa Pathway for US Companies
Is a Canada Intracompany Transfer Work Permit a Good Alternative to a U.S. H-1B Visa?
In the United States, companies seeking to fill skilled labor shortages often look at the H-1B visa as a way to hire highly advanced and skilled foreign workers legally. However, the H-1B visa is granted to foreign workers in a lottery that happens once per year. There are only 65,000 general spots available and an additional 20,000 spots available to graduates of U.S. master’s degree programs.
In 2025, the Trump Administration introduced a $100,000 USD fee for companies seeking an H-1B visa for foreign workers, unless the worker qualified for a specific exemption.
This means that U.S. companies that want to hire talent from abroad are restricted by low lottery odds or incredibly high fees.
U.S. companies and workers should consider Canada’s intracompany transfer work permit as an alternative to the H-1B visa.
Canada allows U.S. companies that have workers on direct contract outside of the United States to transfer their workers to Canada. To do so, the U.S. company must show that the worker can be transferred back out of Canada at any time. This makes Canada’s intracompany transfer guidelines unique and distinct from the U.S. L-1A visa or L-1B visa.
If you run a company in the United States, hire workers outside the U.S. on direct contract, and are unable to bring those workers to the U.S. on H-1B visas, you should consider an intracompany transfer work permit for them for Canada.
Mandelbaum Immigration Lawyers can guide you on how to establish your company in Canada to become eligible for intracompany transfer work permits.
Best of all, once those workers have transferred to Canada, they may be eligible after one year of working in Canada to be transferred to the U.S. on L-1A or L-1B visas.
This means that an intracompany transfer work permit for Canada can be an integral part of your company’s global talent recruitment strategy.
Is a Canada Intracompany Transfer Work Permit Available for Workers on Expiring F-1 OPT Visas?
Yes, if your employee has been working for you for one or more years, and their work for you would qualify them for an executive, managerial or specialized knowledge position with your company in Canada, then the Canada intracompany transfer work permit is a great option for your expiring F1-OPT visa employee.
Many U.S. companies rely on the H-1B lottery to retain their F1-OPT workers. Instead, after the F1-OPT worker has acquired one year of work experience in Canada, you can transfer your workers to Canada. After one year of work in Canada, that worker may then be eligible to transfer back to your office in the U.S. on a L-1B work visa.
If you are an F-1-OPT visa holder and are concerned about the odds of your company winning the H-1B lottery, we can guide you and your company on establishing operations in Canada and qualifying you for a Canada intracompany transfer work permit.
My Company in the U.S. Does Not Have an Office in Canada. Can We Qualify?
Mandelbaum Immigration Lawyers assists companies with establishing a new office in Canada for your intracompany transferees. Our law firm collaborates with an advisory group. This includes corporate lawyers, employment lawyers, tax advisors, cross-border accountants, bank advisors, human resource consultants, bookkeepers, and business office centres. We guide clients through our network of advisors to take you step-by-step through the process of establishing a new office in Canada.
Don’t leave the process to guesswork. Our team has assisted countless companies enter Canada and continue operations seamlessly.
Our group of professional advisors can help your company smoothly transition to Canada by adopting best practices in corporate governance, finance, tax, banking, employment, payroll, human resources and administration.
For less than half the annual cost of one software engineer, you can have your office established in Canada and able to accept intracompany transfer workers.
What Advantages for U.S. Companies Are There to Establishing a Company in Canada?
There are many good reasons why your U.S. company should establish a company in Canada. The best reasons are often:
Canada's robust immigration system
Ease of incorporation
Payroll savings and tax incentives
Inter-office coordination
Canada’s Immigration System
Canada has numerous immigration and visa programs for innovative and growing companies to attract top talent. Just as the U.S. has the L-1 visa program, Canada offers the intracompany transfer work permit program for multinational companies seeking to transfer their specialized knowledge and managerial employees. In this respect, the U.S. L-1 visa program and the Canadian ICT work permit program are very similar.
However, the immigration similarities seemingly end there.
After the L-1 visa, the work visa options for U.S. companies to attract foreign talent starts to run thin. The O-1 visa program for persons with extraordinary ability has a high standard that is often difficult to meet. It is not enough to be merely highly talented and skilled. Instead, to qualify for an O-1 visa, you have to stand out amongst the best. This high bar for the O-1 visa program often results in companies looking to the H-1B visa program.
However, the H-1B visa program is not a good option. First, the H-1B lottery occurs once per year. The number of H-1B visas is capped at 65,000 per year under the general category, with an additional 20,000 for graduates of U.S. master’s degree and Ph.D. degree programs. Lastly, the government program fees are extraordinarily high relative to Canada’s work permit program options.
By contrast, in Canada, your company may be eligible for additional work visa options that have no parallel in the U.S.
For example, the Global Talent Stream, or GTS, is an LMIA stream available to companies every day of the year. There are no caps or quotas. And the labor market test is completely unlike the U.S. labor certification process.
To be eligible for a GTS LMIA, your company must simply present a plan to grow in Canada. If you can show benefits to Canada’s labour market, then there’s no need for a standard labour market test. Moreover, the GTS LMIA fee is substantially less than the fees a company would expect to pay for an H-1B visa. For years, the GTS LMIA fee has been set at $1,000 CAD, with work permit and biometrics fees for the Canadian work visa costing only a few hundred Canadian dollars after your GTS LMIA has been approved.
Another work visa option that Canada offers is the C20 Reciprocity Work Permit program. If you have Canadians already working for you in the U.S., or are willing to offer opportunities for Canadians to work for you in the U.S., Canada is willing to offer you LMIA-exempt work permits in exchange. The ratio of reciprocity does not need to be 1-to-1. So long as the general flow is considered reciprocal over time, you can qualify for a C20 reciprocity work permit. The government program fees for a C20 work permit are even less than the GTS LMIA.
L-1 Visa Pathway from Canada to the United States
Perhaps the best advantage of opening an office in Canada is the long-term workforce stability that it brings. Once you move or hire your talented employees to work for you in Canada under an ICT work permit, GTS work permit or C20 Reciprocity work permit, you can transfer them back to the U.S. on a L-1 visa after they have completed one year of work in Canada. If your employees are being transferred back into a L-1A managerial visa position, they may also qualify for an EB-1C international management transfer – a petition for permanent residency. If not, and they continue to be on an L-1B, you can petition for an EB-2 or EB-3, and if necessary, transfer them back and forth between your Canadian and U.S. office while they await their Green Card.
This strategy means long-term talent retention. It’s the strategy that gives global multinational corporations a competitive advantage. However, this strategy is available to small and medium sized businesses too. We have opened a Canadian office for U.S. companies with less than 10 employees on their U.S. payroll.
Thus, by opening an office in Canada and obtaining a Canadian work permit for your employee, you avoid the H-1B lottery system and all the uncertainty it brings, and might even fast-track your employee to a Green Card.
Incorporating in Canada
There are two types of corporations in Canada: standard corporations or Unlimited Liability Corporations (ULCs). Both receive similar tax treatment by the Canada Revenue Agency.
Incorporations can be completed fast: in as quick as 48 hours or less.
Many provinces in Canada allow you to incorporate without a resident Canadian director, parent company. Just like the United States, where many companies will form their corporate parent in Delaware and file extra-state registration to operate elsewhere in the U.S., your Canadian corporation can establish its Canadian headquarters in one province and extra-provincially register to operate in another province.
The corporation can be up to 100% owned by the U.S. parent company, or you can mirror the cap table of shares of the U.S. corporation. These corporations are considered non-Canadian Controlled Private Corporations, or non-CCPC entities. This structure is often needed to qualify for a C61 ICT work permit.
A Canadian ULC, as the name implies, exposes the shareholders to unlimited liability. However, there are sometimes good reasons, such as tax planning, where you would want your company to be a ULC. A province that offers both incorporation without a Canadian resident director and a ULC can be a major tax planning advantage.
Cost Savings: Payroll and SR&ED Tax Credits
Opening an office in Canada as an alternative to the H-1B lottery system is within your budget. The main reason is that you’ll actually save money by establishing a subsidiary in Canada.
Substantial savings are possible for many technology and innovative companies.
First, companies moving their workers to Canada should not think in terms of U.S. dollars and U.S. market rates. Cost of living adjustments are typical. Software engineers, data scientists, product owners, and other advanced tech positions simply command fewer dollars in Canada than they do in the U.S. Employees transferred to Canada gain access to a high living standard that can cost lower than many major U.S. urban centres.
Companies also save payroll costs on health insurance. Because Canada has a publicly funded healthcare system, you do not need to spend tens of thousands of dollars per employee each year on health insurance.
The other advantages are in Canada’s tax incentives programs. Innovative companies may be eligible for Canada Federal Scientific Research and Experimental Development (SR&ED) tax incentives and provincial Research and Development (R&D) tax incentives. SR&ED tax credits and other R&D tax credits turn payroll costs into payroll savings. These credits can vary between 15%-45% on qualifying expenditures. Payroll costs of engineering and other technical employees doing research and innovation are usually eligible for credits.
With payroll cost savings and tax incentives, you can therefore offset engineering team costs from day one.
Our modelling shows that companies can save over $500,000 USD per employee after five years in Canada. These savings come first by reducing payroll costs from the approximately $185,000 USD base salary costs plus 24.5% typically paid in benefits and payroll taxes, to $150,000 CAD and 25% overhead costs, which converts to about $135-$140,000 USD per year assuming an exchange rate of approximately 0.75 CAD = 1.00 USD. Then, assume a minimum 15% SR&ED tax credit for a non-CCPC (Canadian Controlled Private Corporation) on payroll expenditures, and your savings start to accumulate rapidly after year 1.
By opening an office in Canada, you can lower the cost of hiring a software engineer by 40% or more.
Companies may also find tax planning strategies to save them money through transfer pricing. Transfer pricing strategies help companies set the prices of transactions between related entities. Whether the U.S. headquarters is providing management services to the Canadian subsidiary, or the Canadian subsidiary is providing research and innovation to the American parent company, establishing fair market value for the services is essential to ensuring tax compliance.
Moreover, for some companies, it makes sense to establish their Canadian subsidiary as an Unlimited Liability Corporation, or ULC. A ULC can be considered as a disregarded entity by the IRS. This means that income and expenses of the Canadian subsidiary can be ignored, and instead recorded by the parent corporation. But, as the name implies, the liability of the shareholders is unlimited. To protect against the liability, some American companies may establish a subsidiary in the US, and have that subsidiary own the Canadian ULC to “block” the ultimate parent corporation from liability.
When incorporating a subsidiary in Canada, therefore, it is important that you seek professional legal and tax advice to ensure that you have the best strategy to maximize the immigration, tax and corporate benefits that come from opening up an office in Canada.
The combination of cost savings, tax incentives and tax planning may offset the costs of establishing a new office in Canada within the first three to six months. After that, you may start to see savings.
Shared Time Zones, Holiday Schedules and Culture
The shared Canada and U.S. time zones mean cross-border virtual collaboration is easy. While you might save money by hiring workers in India, China or elsewhere, the coordination headaches of a different time zone may not be worth it. Canada offers a clear advantage here.
Moreover, hiring workers in Latin and South America often means acquiescing to long summer holiday break periods, compared to the 9 or 10 annual holiday days in Canada and the U.S., many of which overlap, and in some cases, language barriers can be an issue.
Proximity and visa-free travel of Americans to Canada also means in-person meetings with your Canadian team are a drive or short flight away.
Culture and language are often cited as a major advantage for companies opening up an office in Canada. English is most commonly spoken in Canada outside of Quebec, and that is often an important factor to consider when opening up a business enterprise abroad. However, Canada’s rich cultural diversity, including language diversity in Quebec, where French is the most commonly spoken language, should be explored in its fullest to maximize employee retention, growth and organization fit.
How Can We Help?
Mandelbaum Immigration Lawyers assists companies with establishing a new office in Canada for your intracompany transferees. Our law firm collaborates with an advisory group that includes corporate lawyers, employment lawyers, tax advisors, cross-border accountants, bank advisors, human resource consultants, bookkeepers, and business office centres. We guide clients through our network of advisors to take you step-by-step through the process of establishing a new office in Canada.
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For a complete overview of ICT work permit types, eligibility requirements, and trade agreements, see our Intracompany Transfer Work Permit Guide.