As European companies launch operations into Texas and across the United States, transferring senior leaders stateside is among the most consequential steps they’ll take during the expansion process.
In the course of these cross-border moves, foreign companies frequently underestimate four pitfalls that can undermine even well-planned transfers: visa timelines that delay a leader’s arrival, regulatory shifts and transfer structures that affect which executives should be relocated and how, delegated authority that falls short of what the role demands and training gaps that expose their company to legal risk.
1. L-1A Visa Timeline Delays that Derail the New U.S. Leaders’ Integration
European companies often overlook the timeframe for securing an L-1A intracompany transfer visa for a senior leader moving to the U.S. When acquiring U.S. companies that will become their U.S. subsidiaries, many European companies wait until the transaction closes to start the visa process. But with U.S. Citizenship and Immigration Services’ processing times for L-1A visas often taking more than months, this approach can leave the new U.S. operation without on-the-ground leadership during the critical early days of integration when alignment, policy implementation and cultural cohesion are most needed.
To avoid this gap, European companies should begin preparing for the L-1A transfer during due diligence rather than after closing. Early preparation allows for timely coordination with immigration and employment counsel, prompt documentation collection, seamless petition preparation and filing, and immediate or near-immediate deployment of the senior leader post-closing.
European companies that neglect this timeline risk handicapping their U.S. operations in their early days, leaving U.S.-based personnel without local leadership to establish operational cohesion, oversee workforce integration and navigate any unresolved issues. The result is delayed integration, misalignment, and inefficiencies that could easily have been avoided.
(European companies can reduce the L-1A timeline by purchasing premium processing, which offers a 15-business-day adjudication. But that’s still at least a three-week delay that could hamper a company’s efforts to launch its U.S. operations.)
Keep in mind, however, that the L-1A visa is not always the right fit. To qualify, the transferee must have spent at least one continuous year of the prior three working in a managerial, executive or specialized knowledge capacity for the foreign affiliate, parent or subsidiary. An external candidate hired to lead the U.S. expansion has no qualifying prior employment, so an E-2 treaty investor visa (for nationals of qualifying treaty countries) or another inbound option may be a better fit, depending on the company’s structure, ownership and country of origin.
2. Failing to Consider How New European Employment Laws Reshape the Transfer
While U.S. immigration law shapes the inbound path, two European developments now shape which executives move and how. Effective Jan. 1, 2027, the U.K. Employment Rights Act removes the cap on unfair dismissal compensation and cuts the qualifying period from two years to six months, so exposure expands on two axes at once: who can claim and how much. The EU Pay Transparency Directive adds a patchwork of pay disclosure and reporting obligations arriving on staggered timelines. Neither law makes anyone relocate. But for a company already committed to U.S. expansion, they change the structural decision that follows.
The default secondment, where the executive stays on the U.K. contract with a right of return, preserves exactly the exposure the move could have managed, because U.K. courts recognize unfair dismissal rights for employees working abroad whose employment keeps a sufficiently strong connection to Great Britain. Capturing the benefit generally requires localization, re-papering the executive onto U.S. terms with the home-country exit handled under local law and achieved by agreement rather than ultimatum. The choice between secondment and localization is now a legal risk decision, not an administrative one.
3. Sending Leaders to the U.S. Without the Authority to Lead
Even when a European company navigates these statutory considerations successfully, another common failure point awaits. A leader installed in the U.S. without real decision-making power quickly becomes ineffective, leading to organizational friction and paralyzing operations. Time zone misalignment, cultural differences regarding the speed of decision-making and centralized approval requirements exacerbate the problem.
When newly appointed U.S.-based leaders lack sufficient decision-making authority, routine matters get escalated to European headquarters, U.S. employees bypass local leadership for answers from overseas managers, and the formal reporting structure erodes. Local leaders become “figureheads” for the European leaders who retain control, signaling to the U.S. team that local leadership lacks real power, undermining morale and effectiveness.
For U.S. operations to succeed, senior U.S. leaders need a clearly defined scope of autonomy over human resources and business functions, including hiring, firing, promotions, compensation and budget allocation. Additionally, they require authority to adapt company policies to fit local laws and market expectations. Finally, they need the ability to cultivate a culture that aligns with global objectives but reflects the realities of a U.S. workforce.
In practice, the two most consequential hires for a U.S. operation are the head of the U.S. business line and the head of U.S. human resources. If U.S. employees view either as unqualified or incompetent, the local leaders will lose their respect, or the employees will go around them to European managers who know little about U.S. employment laws. Those well-meaning European managers may unwittingly give employees the wrong answers on employment-related issues or interact with them in ways that are unlawful in the U.S., exposing their U.S. operations to U.S. employment law liability.
Cultural differences in decision-making deepen the problems brought about by insufficient authority. U.S. operations tend to move faster than European operations. In Texas, we still have a little bit of cowboy culture in our business operations. Routine matters, such as day-to-day vendor decisions or a discrete performance management call, should remain the province of U.S. leadership. More consequential matters, like capital expenditures or hires exceeding a defined dollar threshold, should be escalated to include European leadership. When that calibration is off, U.S. leadership ends up six working days into a process to terminate an employee that the business wanted gone yesterday. The resulting delay creates both operational drag and legal risk, because the longer the process drags on, the greater the risk that protected class complaints will surface and that the eventual termination will appear retaliatory.
When European executives retain decision-making authority over U.S. operations, they may also subject themselves to U.S. jurisdiction. European executives who participate in employment decisions or investigations may be compelled to sit for U.S.-based depositions or face other discovery requests, incurring significant time, cost and reputational risk. The costs of getting these issues wrong are not theoretical. In our experience, a single cross-border deposition requiring global travel runs into six figures in legal fees and expenses, and Hague Convention procedures for cross-border discovery add additional process and cost. Beyond the direct costs, those experiences may strain the relationships among U.S. counsel, European headquarters and the European outside counsel a company has historically relied on. Secondment structures compound that exposure: a European parent that remains the legal employer may be treated as a joint employer of the U.S. workforce, placing the parent itself within the reach of U.S. courts.
4. Untrained Senior Leaders Creating Legal Exposure
A European company’s failure to train newly installed U.S. leaders on the differences between U.S. employment laws and those of their home countries is an open invitation for those leaders to inadvertently expose their companies to significant litigation and regulatory penalties. Many European executives who lead U.S. operations struggle to adapt to foundational aspects of U.S. employment law, such as “at-will” employment, which allows termination without cause but does not insulate an employer from legal risk. The stakes rise with the transfer structure: A seconded leader’s missteps may create liability that runs directly to the European parent as the employing entity.
Confusion about at-will employment shows up in predictable ways. European executives frequently ask whether they can include probationary periods in U.S. employment agreements. They can, but in an at-will jurisdiction, the period rarely has the operative effect they expect. Documentation of performance and adherence to internal HR processes offers better protection. Skipping a performance improvement plan (PIP) because “we can fire at will anyway” is the kind of action that creates an evidentiary record favorable to a discrimination, harassment or retaliation claim, particularly when the employee bringing that claim is the only member of a protected class on their team, and their prior performance reviews note the employee was meeting expectations.
The cultural mismatch on discipline runs deeper than the PIP question. European executives often come from environments where termination decisions are reached through consultation, with the documentation focused on the rationale for the outcome rather than on the employee’s performance. The documentation that protects an employer in a discrimination, harassment or retaliation claim in the U.S. is different. It is contemporaneous, employee-specific and focused on observable performance against communicated expectations, not on the deliberative process that led management to act.
Multistate operations add further complexity. Though much of U.S. labor law is imposed and regulated at the federal level, many aspects remain the province of the states. A compliance program that’s sufficient for Texas but does not meet the stricter requirements of California or New York increases legal exposure. Even when U.S. leaders are trained on the labor laws of all the states where they operate, they still need assistance in implementing state-specific compliance programs.
An Inflection Point That Exposes Four Pitfalls
When European companies transfer Europe-based executives to the U.S., they face an inflection point that can determine the trajectory of their U.S. operations for years to come. Executed well, a transfer enables rapid integration, strong local leadership and sustainable growth. Executed poorly, the transfer can lead to a delayed start of operations, organizational dysfunction and substantial legal exposure.
For European companies, a thoughtful approach to placing senior leaders in the U.S. that avoids the four pitfalls above can pay sizeable dividends in integration, compliance and long-term success on both sides of the Atlantic.
Joshua Redelman, a partner at Nelson Mullins, is an employment lawyer and legal advisor for international and high-growth companies in Texas. His practice combines employment litigation, day-to-day employment counseling, and international advisory work.