Not necessarily, but it must be doing business or, if it is a new office, have premises and a credible plan. An affiliate with a lease, a bank account and contracts in negotiation can support a petition; one that exists only on paper cannot.
File when the affiliate is real, not when it is profitable
The requirement is that both entities be doing business, meaning the regular, systematic and continuous provision of goods or services, or, for a new office, that premises have been secured and the entity will be able to support a managerial position within a year. A Torbay logistics company whose Gulf Coast affiliate has signed a warehouse lease, registered for payroll, hired one coordinator and is negotiating supply-base contracts may present a new-office petition, whose initial approval is limited to one year and whose extension depends on the affiliate's actual development. Waiting for the first customer contract can strengthen the file but delays the manager's arrival, which may affect the contract.
One possible sequence is to file once the premises and a credible staffing and funding plan are in place, use premium processing if desired, and have the manager arrive only after approval and admission. Throughout, the manager should remain on the Torbay payroll and should not begin running the affiliate before admission in L-1A status.