MUMBAI: “Unlike many of our international peers, the current US immigration laws do not provide a specific immigration option for startup founders – commonly known as a ‘startup visa.’ Instead, immigrant entrepreneurs are forced to navigate an antiquated system largely rooted in employer-sponsored visas, like for example the H-1B visa.
The existing visa options do not readily accommodate the startup entrepreneur for many reasons, the least of which includes the fact that they were all created over 30 years ago well before we had the internet on our phones, and before social media and apps,” reads a statement by Fiona McEntee, immigration attorney and chairperson, media advocacy committee at the American Immigration Lawyers Association (AILA), which was placed on record by the House subcommittee panel.
The panel was hearing the discussions centred around ‘Oh, Canada! How outdated US immigration policies push top talent to other countries.’ Besides Canada, several countries issue start-up visas for entrepreneurs such as the UK, Ireland, Australia, New Zealand, Germany, Singapore to name a few.
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“This has happened in response to how difficult it is to work in the United States in H-1BMcEntee explained the drawbacks of the options currently available for immigrant start-up founders and the need for a specific visa for this category of talented individuals who can contribute greatly to the US.
Similarly, The National Venture Capital Association has often stressed on the need for a specific visa category for startup founders.
Its report – ‘Immigrant entrepreneurs can drive economic growth in the pandemic recovery’, cites that one-third of the US venture capital companies that went public between 2006-2012 had at least one immigrant founder.
VC-backed companies, with at least one immigrant founder, include household names like AT&T, Google, Intel, Facebook and LinkedIn.
The report refers to a Harvard Business Review piece which stated that 31% of VC-backed founders are immigrants, compared to 25% of entrepreneurs generally.
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Often, an entrepreneur enters the US on an H-1B visa but spends many years attached to that employer before receiving a green card that allows the individual to found a company.
Take Jyoti Bansal who came to the US on an H-1B visa but waited 7 years before starting AppDynamics, an incredibly successful startup that was ultimately sold for $3.7 billion.
It is not economically advantageous to delay founders like Bansal from growing innovative new companies in the US, illustrates the report.15 McEntee in her statement to the House subcommittee panel has also stressed upon this need for a specific visa category for entrepreneurs.
In May, the US Department of Homeland Security (DHS) announced that it is withdrawing a ‘proposed’ rule introduced by the Trump administration that would have rescinded the International Entrepreneur Rule (IER).
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The US Department of Homeland Security (DHS) has announced that it is withdrawing a ‘proposed’ rule introduced by the Trump administration that would have rescinded the InternationalIER enables ‘qualified’ international entrepreneurs (based on prescribed criteria including funds raised, which are a minimum of $ 250,000 from qualified US investors or $ 100,000 from government grants) to obtain immigration ‘parole’ – that is to temporarily enter and stay in the US and nurture their start-up, despite not having a work visa or a green card.
Commonly, IER is known as the start-up visa, but it is actually a permit for eligible foreign entrepreneurs to stay in the US for two and a half years with the possibility of another extension of a similar tenure.
McEntee explained that while full implementation of the IER is welcome, it may not be a readily accessible option for many given the logistics involved and the Department of State’s pandemic-related backlogs.
US Consulates/Embassies globally are also lagging behind in appointments, or are non-functional based on the local lockdown requirements.
The IER is based on the DHS Secretary’s statutory authority to grant parole on a case-by-case basis for ‘urgent humanitarian reasons or significant public benefit.’ Stringent requirements mean that IER is reserved only for those high potential startups and founders.
Immigrant entrepreneurs must not only have received significant funding from seasoned investors or through government grants or a combination of them, but they must also provide a significant public benefit through the substantial and demonstrated potential for rapid business growth and job creation, explained McEntee.
“In the immediate term, Congress could pass a law that enables immigrant entrepreneurs in the US to change status to IER here without the need to leave and be paroled in.
Premium processing should also be available for the IER applications.
Additionally, Congress could remove the boarding foil requirement from the IER procedure thereby allowing all IER approved applicants abroad (not just Canadians) to present the IER approval notice to a US port of entry,” suggests McEntee.
She explained that the H-1B visa is not a feasible option for entrepreneurs, besides having an annual cap and a random lottery selection, an employer-employee relationship is vital.
If the immigrant entrepreneur owns a substantial portion of his company, or his/her role doesn’t fit into the ‘specialty occupation’ requirement the H-1B visa option is completely ruled out.
The E-2 investor visa is only for those from the visa-treaty countries – which rules out both India and China.
The O-1 visa for extraordinary ability immigrants may at the outset not cover all start-up founders.
“I have seen first-hand the gaping hole in our current immigration framework for these would-be entrepreneurs.
The limited and uncertain immigration options often force entrepreneurs to abandon their innovative ventures and find employers who can sponsor their visas – turning job-creators into employees in the process.
Additionally, some immigrant entrepreneurs leave the US or never come here at all – in search of a more welcoming and modern immigration system,” stated McEntee.
“Ultimately, in the long term, only Congress can pass more robust startup visa legislation and create additional immigration pathways to ensure that the United States – and not somewhere else – attracts and retains these innovative international entrepreneurs,” she summed up.