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Battling the Innovation Deficit with Visas for Immigrant Entrepreneurs

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As we shape the future of this country through our Presidential votes this year, we would be well advised to place priority on immigration visas for entrepreneurs. The success of our economy has long depended on innovation. However, our immigration system locks out highly qualified international business leaders and tech innovators who want to bring billions of dollars and thousands of jobs to the U.S. Without needed updates to our immigration rules, we will continue to lose this business, growing our innovation deficit and allowing other countries to throw us into their economic shadows.
The Problem
Recognizing our innovation deficit, the current Administration unveiled their Strategy for American Innovation in 2009, with an update in 2015. The Strategy makes the case for key innovation investments to advance the important emerging technologies it identifies, which are proposed in the President’s 2016 Budget and are critical for ensuring that the United States remains an innovation superpower.
The Strategy focuses on:
  • The importance of investing in research and development (R&D) and the other building blocks of long-term economic growth, instead of locking in harmful sequestration cuts.
  • Strategic areas from advanced vehicles to precision medicine where focused effort can advance national priorities and help create shared prosperity.
  • New efforts to make the Federal government more innovative to improve performance and create a better environment for innovation by the private sector and civil society.
In our opinion, the Strategy for American Innovation fails to address a major problem for so many who want to invest in this country. Entrepreneurs from other countries who want to found their businesses in the U.S. often have difficulty obtaining an appropriate visa for their needs. Sometimes, it’s easier for employees of a company to get a visa than the founder and leader. While the Strategy for American Innovation proposes government spending of taxpayer dollars on R&D and other investment, there are many individuals who already have access to private (not taxpayer dollars) funds to create tax-paying companies with the promise of thousands of American jobs.
More immigrants start new businesses compared to individuals born in the U.S. While 13 percent of the U.S. population is foreign-born, 24 percent of tech and engineering companies created between 2006 and 2012 had an immigrant founder, according to the Kauffman Foundation, a researcher that advocates for entrepreneurs. In Silicon Valley, the figure was 44 percent.
Among those founders are WhatsApp CEO Jan Koum and Instagram’s technical lead, Mike Krieger. Elon Musk, founder of SpaceX, Tesla Motors, and several other companies, is another famous and highly successful immigrant-entrepreneur. However, for every immigrant entrepreneur who was able to get the appropriate visa to establish their American company, there are several others who have had to take their businesses elsewhere. For example, Kunal Bahl had to return home to India to build e-commerce company Snapdeal after failing to secure a U.S. visa after graduating from Wharton. Snapdeal was valued at $5 billion by investors last year and employs more than 4,000 people, economic output and jobs that could’ve benefited Americans.
The Solution
In Washington, most of the debate around tech visas centers on H-1Bs, typically used by big companies and research universities. Lobbying groups such as Mark Zuckerberg’s FWD.us say more H-1B visas would keep U.S. companies from losing out on top talent. Protectionist legislators and Republican front-runner Donald Trump say they depress wages and take jobs away from Americans. Either way, H-1Bs aren’t a practical option for startups because they’re meant for employees, not founders.
Since there is no visa specifically designed for foreigners who start companies in the U.S., we need legislation that changes this reality. A six-year effort to create a startup visa to fix this problem died in Congress last year. Craig Montuori, an advocate for reform, estimates that hundreds of founders in the U.S. are struggling to get federal work authorization. “We got a lot of support on Capitol Hill and very little opposition, but few people were willing to make it a priority,” he said.
Australia, Canada, Chile, and other countries aspiring to create the next tech hub are trying to capitalize on the U.S.’s failure to keep pace with the needs of immigrant entrepreneurs. These countries are appealing to entrepreneurs with special visas and tax breaks, though the programs lack the allure of Silicon Valley. “The U.S. is where these founders really want to be: The market is bigger; the VCs are here,” said reform advocate, Tahmina Watson. “They want to be here, yet our laws are not changing.”
Until our laws do change, our immigration experts are here to advise immigrant entrepreneurs regarding their best choices. Depending on the particulars of your situation, we are here to counsel you regarding your options for establishing your business in the U.S. While we are fighting for immigration reform and a startup visa, we have the experience needed to help you navigate the options that are currently available to you.
Here is a breakdown of potential options, which may or may not be appropriate for your personal story:
B1/B2 – Tourism and business
B1/B2 allows you to stay in the U.S. for up to six months. You can participate in conferences, validate your ideas, talk to potential customers, interview prospective employees and the like. But you can’t work for any American company, including your own.
F1/F2 – Student visas
If you need more than six months and are really early on with a startup, consider one of the post-graduate entrepreneurship programs at Stanford or Berkeley. Both universities have great courses on technology entrepreneurship, strong networks of entrepreneurs, a bunch of events, and mini-ecosystems like Stanford’s startup accelerator. Going to a university may get you a few years in the country on F1 visa. But make sure you’re ready to be a full-time student.
J – Internship visas

Interning at a startup is a great opportunity to gain experience. You can find a paid internship and develop your own ideas while learning from a Silicon Valley company. However, unless you’re a top-notch engineer, it will be hard to find a startup (host company) that will handle J visa applications.

H-1B, L-1A, O-1

If you have enough money to start your business and employ people, and now you’re looking to raise a round of investment, then it’s time to speak to our immigration experts.
Three potential options that may work for you include:
H-1B – Temporary worker visa
H-1B is a non-immigrant visa allowing an American company to temporarily employ a foreign worker for a specific position. H1-B could be a good option for a technical co-founder, but difficult for a CEO because:
  1. There are a limited number of H1-B visas issued each year. There is already a line out the door of companies trying to get H1-Bs for their prospective employees. You need to apply before all the visas are gone. The H1-B cap in 2014 was reached in the first week.
  2. H-1B requires a high salary. The fact that you’re well-compensated by stock won’t impress immigration. Be ready to pay yourself over $80,000 per year (+/- $20k depending on location) with a heavy taxation.
  3. The immigration office needs to be convinced your startup is an active business. You may be asked for such things as a business plan, existing revenue, vendor contracts, last year’s tax papers showing decent cashflow, office leases, etc.
  4. You’ll need a sponsor to sign the H1-B petition. You’ll need to set up a company and hire a US citizen who can act as a sponsor before you can apply for H1-B.
L-1A – International workers visa
The next option is L-1A. L visas are made for transfers within companies. This is ideal if your company is incorporated in your homeland, and you’re looking to transfer someone to the US to open a child company here. L-1A is specifically made for executives within foreign companies opening offices in the US. Immigration officers will need to look at your company’s staff count, current revenue, payroll and cash in the bank. You will need proof of a physical office back home. A lease agreement for an office in the U.S. may also be requested.
O-1 – Individuals with extraordinary abilities visa (aka the “rock star” visa)
Among other more standard requirements, there is a list of things you need to submit – a minimum of four of these pieces – to prove that you’re “extraordinary”:
  1. Copies of articles, papers and other publications you’ve written. Have you written any articles about running a tech startup? Were those articles published in any media outlets? Have you written on the topic of design, software engineering or online marketing? Find all the pieces you’ve written, no matter how small or insignificant you think they are, and let your immigration lawyer determine their value.
  2. Evidence of judging the work of others. Have you judged projects at a hackathon or other startups on some demo day? All those things may count in your favor. Round up all the articles that mention you judging competitions and events to discuss with your immigration lawyer.
  3. Articles written about you. Have you been featured in newspapers, websites or technology blogs? Have you won any pitch sessions that were later written up? Keep those articles scanned and web pages printed as PDFs.
  4. Awards received in recognition of professional accomplishments. If you haven’t yet won any awards, why not to participate in local competitions? It can only help your business to gain press.
  5. Memberships in professional organizations requiring high level of achievement. Likely, there are quite a few business organizations in your homeland that you can join. Can you serve as a mentor or lecturer at an incubator or business organization in your community?
  6. Evidence of original contributions. Many startup founders have original contributions. We can help you decide what counts.
Hiring a good immigration attorney is crucial for success in obtaining the visas above.

E Visas
E visas are treaty trader and investor visas. The E-2 visa requires a moderate investment, but getting E-2 is relatively easy and fast, which makes it a great choice for a founder of a growing startup. Unfortunately, not all countries are on the treaty countries list. If you’re planning to go the E-2 route, please consult us for more details.

If you’re ready to find out about your options as an immigrant entrepreneur, please contact us today to schedule your consultation. Our team is here to help with all of your immigration needs.

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