Foreign entrepreneurs are still waiting for the United States Senate Finance Committee to evaluate the proposed Startup Visa Act of 2015 (or EB-6 Visa) that will allow foreign entrepreneurs to obtain permanent residency in the U.S. by investing and raising capital from a qualified U.S. investor. At present, there is no employment-based immigrant visa available for foreign entrepreneurs. Unfortunately, the Act is currently stuck at the committee level, and, thus, the EB-6 Visa has become somewhat of a myth in the immigration law community.
To determine whether this myth can become reality, it is necessary to review its long legislative history. On February 24, 2010, Senators John Kerry and Richard Lugar introduced the Startup Visa Act of 2010 in an attempt to fill the gap in U.S. immigration. The 2010 Act would have allowed an immigrant entrepreneur to receive a two year visa if he or she could show that a qualified U.S. investor or U.S. venture capitalist was willing to dedicate a minimum amount of capital to the immigrant entrepreneur’s startup venture. The 2010 Act would have created a temporary immigrant visa (i.e. a conditional green card), which would have converted to a permanent residency (i.e. a permanent green card) after two years if certain conditions were met. Unfortunately, the 2010 Act was left to expire in the Judiciary Committee at the end of the 111th Congress and no further legislative action was taken.
On March 14, 2011, a second attempt for the Startup Visa Act of 2011 was introduced to the Senate. Nevertheless, it was once again left to expire in the Judiciary Committee at the end of the 112th Congress. In a third attempt, although the Startup Visa Act of 2013 was introduced on January 30, 2013 during the 113th Congress, it was never enacted. On January 16, 2015, Senators Jerry Moran and Mark Warner introduced the fourth version of the Startup Act in the 114th Congress. For now the bill has been read twice by the Senate and referred to the Committee on Finance.
The new bill is designed to boost growth with a mix of taxation-based regulatory changes and immigration. It includes permanent exemptions from capital gains taxes for some startup stock sales, increased foreign student visas for those educated in the U.S. sciences, technology, engineering, mathematics, or computer science (STEM), and terminates country-based caps on immigration visas.
The new legislation provides conditional permanent resident status to two categories of people. The first category pertains to foreign entrepreneurs lawfully present in the United States and holding a non-immigrant Visa. The foreign entrepreneur must create a company within one-year period after obtaining his non-immigrant Visa, with a minimum investment of at least $100,000. During the 3-year period beginning on the last day of the 1-year period, the startup must create an average of at least five new U.S. full-time jobs.
The second category applies to foreign-born graduates from U.S. universities in science, technology, engineering, mathematics, or computer science (STEM). It would benefit 50,000 individuals that are actually in this situation and it is likely to create 50,000 visas. The foreign worker or STEM graduate must create a business that has an annual income of at least $30,000 or assets of at least $60,000. The business must also include an investment in the minimum amount of $20,000 from a U.S. citizen. After two years, the startup must create three new U.S. jobs, and it must raise either over $100,000 in financing or generate more than $100,000 in revenue per year. This proposed category is interesting because it intents to eliminate caps on the number of work visas that can be granted to individuals from each country.
It is in the best interest of the U.S. to attract highly talented and skilled entrepreneurs. Immigrants have a long history of starting successful businesses in the United States. This list includes the U.S.’s most famous successful companies such as Google, Yahoo, AT&T, Goldman Sachs and EBay. Research and surveys show that immigrant entrepreneurship substantially benefits the growth of U.S. economy by generating services, sales, innovation and above all, employment. Most people find it strange that U.S., the largest economy in the world, lacks a visa category for start up entrepreneurs. In other developed countries, foreign entrepreneurs do not face the same immigration obstacles as they do in the United States. Countries like Australia, the United Kingdom, Canada, Italy, Spain, Singapore and Denmark have visa systems to receive innovative entrepreneurs. Creating a U.S. visa category for foreign entrepreneurs and making access to investment easier will have a positive impact on the U.S. economy.
It is now remains to be seen whether the legislative process will turn the EB-6 myth into a reality.