Programs like the EB-5 employment-based avenue for gaining a green card have arguably been extremely successful. These programs are designed to attract foreign investors, who are willing to put large sums of money into businesses that will create U.S. jobs. These investors can skip long wait times and do not have to worry about quotas. The U.S. economy benefits by the job creation created by this foreign investment. But why stop here?
With the U.S. economy so desperate for revival we don’t just need jobs, we need innovation- new ideas and talented people to help us regain the reputation for cutting edge and burgeoning entrepreneurship. Recently there has been a lot of buzz for revamping parts of the U.S. immigration policy to create Entrepreneurship Visas. It turns out that research at Duke University demonstrated that between 1995 and 2005, immigrants started roughly half of all of the startups in Silicon Valley. The job creation from these innovative companies can have a bigger impact than those created by the current EB-5 Investor Visa Program.
Why? Because these potential entrepreneurs will be starting businesses of their own, often times businesses with unique and novel ideas, whereas EB-5 applicants are often just investing in existing projects. Investors entering under the EB-5 program are investing with the primary goal of getting citizenship, not necessarily with the primary goal of starting a business. They are not coming to the U.S. just to invest here, because there are plenty of ways for non- citizens to invest in U.S. businesses without getting citizenship or even, for that matter, living in this country. Many would argue that the goal of EB-5 is to attract high net-worth individuals and give them citizenship, as long as they provide short term jobs (typically jobs that last 5 years at a minimum). In contrast, those who would come under the new proposed Entrepreneur Visa program would primarily want to come to this country and get citizenship for the express purpose of starting their business. The difference may seem subtle, but it is significant.
A new category would also allow immigrants on student visas to stay in this country if they start their own business. In this market, this may spur the starting of new business as a way to stay in the country, potentially creating new companies and jobs that would never have otherwise been created. Currently, employment-based types of status would not allow an immigrant to leave a job and start a company. This type of proposed Entrepreneur Visa could potentially create a more dynamic economy through this boost in competition. Immigrants on this type of Entrepreneur Visa would have a lot riding on the line- not just their business and their investment, but also their citizenship, which means they would be even more motivated to have their businesses succeed.
Admittedly, these types of proposed legislation, like those put forth in the Kerry-Lugar proposal, have come across important and relevant criticism for the amounts and types of investment requirements they suggest. Putting impossible restrictions on the amount and types of funding would make such an Entrepreneurship Visa program impractical and ineffective. If the standards for capitalization are so high that most new business would fail to meet them, then it cannot be reasonably expected that the program would attract the types of business innovators that would be needed to strengthen the vitality of the economy.
Critics also rightly argue that even current programs like EB-5 and E-2 visas are far from perfect. This criticism is important because there are real downsides to the current program and much room for improvement. For example the current programs often allow minor children to come to the U.S. on their parent’s investor visa, but this is only till they reach 21. This means that minor children may upon reaching 21 be sent back to a home country they do not know. In theory this problem can be circumvented by the minor child applying for their own visa, however, U.S. officials are so back logged that the visa application for the child may itself take over 12 years. There is a good chance that may not be before the child turns 21. Additionally, visa renewals on E-2s for example, are not guaranteed. This means after sinking substantial funds into a business in the U.S. and creating jobs for U.S. citizens, visa holders risk that they themselves and their children may be sent home even after complying with all aspects of the program. This is a huge potential downside not to be taken lightly.
But the U.S. is not the only country starting programs like these. Other countries like Chile and Singapore have similar programs designed at attracting entrepreneurs as well. With the current political climate buzzing about immigration reform, the need for jobs, and the need to reinvigorate the U.S. economy with new and innovative ideas, this type of proposed legislation definitely gives us something to think about and chew on.
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