U.S. immigrants are about twice as likely to become entrepreneurs as native-born Americans. They make up around 13% of the population, yet represent 27.5% of all American entrepreneurs. Immigrant-founded top venture-backed firms have created an average of 150 jobs per company and include several household names such as Google, eBay, Yahoo, Nordstrom, AT&T, Procter & Gamble, and Goldman Sachs. In 2012 alone, a quarter of all tech and engineering start-ups had at least one immigrant cofounder, employed over 560,000 workers and generated $63 billion in sales.
While many immigrants have found great success in the United States, the already uncertain path of entrepreneurship is exceptionally challenging for those learning to navigate the legal and cultural nuances of the American world of business. And even after an entrepreneur figures all that out, they still have to face the US immigration process.
The number one skill of being a startup founder at this point is being an immigration attorney.
— Aaron Levie (@levie) March 16, 2017
Below are the 6 most popular U.S. visa options that are currently available for foreign entrepreneurs:
1. Entrepreneur H-1B
This visa is employer-specific, meaning approved applicants may only work for the specified employer referenced in the application. For entrepreneurs, this means that an employer-employee relationship between the must be demonstrated between the applicant and their business. Even if the individual has an ownership stake in his/her company, the company must be legally permitted to supervise his/her work and fire him/her if necessary. In order to prove a valid employer-employee relationship between an entrepreneur and his/her business, there are several options:
1) Maintain a separate Board of Directors with authority to control the individual’s employment
2) Present evidence of preferred shareholders, investors, etc. and establish their right to control the individual’s employment
3) If dealing with an LLC, provide for a separate manager with control over worker employment in the Operating Agreement
Aside from establishing the employer-employee relationship, entrepreneurs in a start-up company need to keep in mind the other important considerations in order to qualify for H-1B. These are the normal considerations for any company sponsoring an employee for an H-1B visa.
2. L-1 Intracompany Transferee Visa
This visa works best for entrepreneurs who already have an existing business abroad and want to run an affiliate or new business in the United States. Under a subcategory of the L-1 visa, often called the “new office” petition, steps must be made towards establishing a footprint or presence in the United States. These steps include creating the business before applying such as incorporation, securement of office space, and a detailed business plan including financial forecasts and a personnel proposal.
An important condition of the new office L-1 visa is that the business must be active and operational within one year. While this will vary somewhat by company, it usually means hiring new employees, fulfilling contract orders, holding inventory, having a revenue stream, etc.
3. E-2 Treaty Investor
E-2 visas are a possibility for those investing significant amounts in new or existing U.S. companies. Applicants must be native to a country that has a treaty of commerce with the United States or that has been deemed eligible to participate by Congress in the E-2 nonimmigrant visa program. To qualify, applicants must have proof of at least 50% ownership as well as operational control, such as a managerial position. The business must be shown to be able to generate enough income to make a significant economic contribution or provide a sufficient living for the applicant and his/her family.
With this type of visa, it is also required that there is some degree of risk involved. This doesn’t mean that you need to be working in a highly regulated industry or competing against giant multi-national corporations. This is normal business risk that almost all businesses are subject to. Business risk is the possibility a company will have lower than anticipated profits or experience a loss rather than taking a profit. The investment must be firmly committed to the business with the chance of partial or total loss. The source of funds or investment is an important element of the E-2 visa application. Investment must funds must be proven to belong to the applicant, must be considered “substantial” when compared to the total start-up costs, and must be actively used by the business. The source of funds, the amount of investment and the use of capital are all important elements of an E-2 visa. Entrepreneurs applying for an E-2 visa should take extra care to ensure that these requirements are sufficiently met and presented in the correct way in their application.
4. O-1 Extraordinary Ability Visa
For applicants who are highly skilled, trained, experienced, or gifted in a particular field, the O-1A visa might be the best fit. Claims of extraordinary ability must be supported by public recognition. A qualified applicant must answer yes to at least three of the following questions:
- Have you received a lesser nationally or internationally recognized prize or award for excellence in the field of endeavor?
- Are you a member of any associations which require outstanding achievements of their members as judged by recognized national or international experts?
- Is there published material in professional or major trade publications or major media about you which relates to your work in the field?
- Have you participated on a panel or individually as a judge of the work of others in the same or in an allied field of specialization?
- Have you made original scientific, scholarly or business-related contributions of major significance?
- Have you authored scholarly articles in professional journals or other major media?
- Have you been employed in a critical or essential capacity for organizations and establishments that have a distinguished reputation?
- Have you or will you command a high salary or other remuneration for your services?
These questions may not be as relevant to entrepreneurs and must be substituted with other evidence of past personal accomplishments in business, such as number of offices, number of workers hired, amount of revenue generated, sales of a self-designed product, etc. or with evidence of public recognition, for example business prizes, media coverage, important clientele, etc.
Similar to the H-1B visa, an employee-employer relationship must be established between the applicant and his/her company. For many years the O-1 visa has been used by professional athletes, actors, dancers, and scientists, but recently it has become a viable option for accomplished international entrepreneurs.
5. B-1 Business Visitor
For entrepreneurs who are wanting to further explore their new idea, the B-1 visa is a good opportunity for a temporary visit to the United States in hopes of securing funding, negotiating initial contracts, finding office space, etworking, etc. This visa usually lasts at most for 6 months but can be less than that depending on the nature of the approved business activity.
All B-1 visitors must have proof of sufficient funds to cover all their trip expenses while in the U.S. It is helpful for applicants to demonstrate “binding ties” to their native country that will ensure their return home when their business visit is finished.
It is important to note that the B-1 visa is not a work visa and is only meant for activities that are a “necessary incident” to the business not those that would constitute local employment for hire or would provide salary from a U.S. source.
If the visitor successfully secures funding, he/she must apply to change their visa status in order to be authorized to work in the United States. The B-1 business visitor visa is a good option for entrepreneurs that are considering participating in a business incubator or accelerator before a public launch of their company.
6. EB-2 National Interest Waiver
In order to waive the offer of employment and labor certification, the potential immigrant must first qualify in one of the following two categories:
1) Advanced Degree Professional – holds an academic or professional U.S. degree above the baccalaureate level or a foreign degree equivalent above the U.S. baccalaureate level
2) Alien of Exceptional Ability – holds a degree of expertise significantly above that ordinarily encountered in the alien’s profession
If these requirements are met, the applicant must then establish that his/her permanent residence in the U.S. will be in the “national interest”.
There are no official standards for what qualifies as “National Interest” and so each application is reviewed on an individual basis by the USCIS (United States Citizenship and Immigration Services). Since there is some degree of subjectivity in this process, approaches vary by service center and each center should be contacted for more area-specific information. Political climate also affects the interpretation of these applications and recent years have shown an increase in strictness.
All NIW applicants must meet the following 3 criteria:
1) proposed endeavor has both substantial merit and national importance.
This was previously worded as “national in scope”, which limited many activities that were difficult to quantify geographically. For entrepreneurs in particular, this change is significant and has the potential to increase the ease of start-up opportunities.
2) he or she is well positioned to advance the proposed endeavor.
Factors that are considered here include the applicant’s level of education, skills, knowledge, and past success in similar pursuits. To satisfy this requirement, entrepreneurs should have a business plan, detailing any progress achieved so far as well some market research on interest of potential customers, users, investors, etc. Since there is a certain level of risk with any start-up, applicants are not required to “prove” that their idea will succeed; they simply must demonstrate that they are in a good position to pursue it.
3) it would be beneficial to the United States to waive the job offer and labor certification requirements.
Again, this is especially relevant to entrepreneurs, for whom it “may be impractical….when advancing an endeavor on his or her own, to secure a job offer from a U.S. employer”.
Some other factors that could help and may be addressed in a NIW application:
– Will he/she benefit the U.S. economy?
– Will he/she improve the working conditions and wages of U.S. workers?
– Will he/she improve training and educational programs benefiting the U.S. under-qualified workers and children?
– Will he/she create more affordable housing for the young, aged, or poor U.S. residents?
– Will he/she improve the environment and lead to better usage of natural resources?
– Will he/she work on behalf of a U.S. government agency?
– Will he/she improve healthcare?
The debate over immigration policies for high-skilled workers and entrepreneurs remains widespread and unresolved. While there is still much dialogue surrounding special start-up visas, as of now, foreign entrepreneurs must select one of the options outlined above.
Here are two more BONUS immigration options for international entrepreneurs. Although these next two options are controversial and their future is uncertain, they could become incredibly useful tools for the global startup community.
BONUS 1: Start-Up Visa [UPDATE: CANCELED]
[UPDATE July 10, 2017] Although this program was set to begin July 2017, on Monday, July 10th, 2017 the Trump administration announced their intention to rescind the program.
The White House stated that they need more time to do additional reviews of the program. This will postpone the start date of the program until March 2018, but early indications point to the program being fully canceled and scrapped before that date arrives.
Read below to see how awesome this program might have been:
In August of 2016, the Obama administration announced a proposed rule to make it easier for international entrepreneurs to enter the United States, develop their business ideas, accept investment and create jobs.
The USCIS outlined the details of this new rule for international entrepreneurs. These entrepreneurs must prove that they are creating a “significant public benefit” with their startup endeavor. Advancing the United States economy through startup growth and job creation can grant immigrant entrepreneurs up to 2 years of authorized work and stay in the US.
Startup founders and executives who qualify for this program would be authorized to work for their startup while in the US. They can also bring their spouse and unmarried children to the US. An added bonus of this program is that the spouse of the immigrant entrepreneur may also apply for work authorization.
Although this rule was set to go live in August of 2017, this program has not been implemented yet and its future is uncertain. The Department of Homeland Security under direction of the Trump administration is currently reviewing the rule and will most likely delay the program for another 8 months.
BONUS 2: Global Entrepreneur In Residence Programs
This option is a clever hack of the rules surrounding the H-1B visa. The number of H-1B visas that are available to US companies is capped at 85,000 per year (65,000 for the H-1B Regular cap, 20,000 for H-1B Master’s Exemption Cap). However, there is no cap for Universities. The program works like this: a university sponsors an entrepreneur as an employee. The entrepreneur meets with students at the university, teaches classes, etc. They are allowed to informally continue to work on their startup.
The Global EIR program was founded by Craig Montuori, a Caltech rocket engineer, with the help of some impressive supporters and advisors from the startup community. The Global EIR program is currently present in four states across 13 college and university campuses.