The United States: Paradise for international entrepreneursOver 40 percent of the 2010 Fortune 500 companies were founded by immigrants or their children, and immigrant-founded companies employ more than 3.6 million people in a country facing a 9.1 percent unemployment rate, according to the Bureau of Labor Statistics (BLS).The “New American” Fortune 500, a study published by Partnership for a New American Economy, reports that, if put together, the revenues of immigrant-founded Fortune 500 companies would constitute the third-largest economy outside the US. In fact, companies we think of as quintessentially “American” — such as Procter & Gamble, Colgate-Palmolive, Yahoo, Google, Pfizer, and Sara Lee (to name just a few) — were founded by immigrants or their children.It is evident that the United States is the “beacon of entrepreneurialism,” as The Econoist wrote in 2009, and the aforementioned examples illustrate how decisive foreign entrepreneurs have been for the success of the American economy. Highly skilled immigrants come to the US with new ideas and approaches, and innovate with companies that create new jobs and stimulate the national economy. Moreover, immigrants allow businesses to grow locally and expand to markets overseas.However, although the US has a history of successful entrepreneurs who have accomplished the “American dream” with the tools available, many immigrant entrepreneurs today lack an easier and more effective way to start a company or extend their operations.In an intervention at the US Chamber of Commerce in Washington, D.C., on September 28, 2011, New York City Mayor Michael Bloomberg noted that “[the US] immigration system has no real path for foreign entrepreneurs, even if they have a bright business idea that has already attracted investors.” As a result, entrepreneurs choose other destinations where getting started is easier.Take, for example, Eric Diep. As Bloomberg recalled at the Chamber intervention, Diep is a Canadian software developer who came to the US looking for capital and opportunities. He created an online quiz program that proved successful at attracting over a million users and interested investors.But Diep was defeated by the immigration system: Unable to get a visa, he had to go back to Canada.Immigrant entrepreneurs face several challenges when coming to the US. Currently there is no special visa for them (even if they already have venture capital to fund their business), and the number of temporary visas for high-skilled workers doesn’t satisfy local demand. In addition, the employment-based green cards are capped equally by country, thereby preventing an influx of Indian engineers from immigrating to the US, for example. The “New American” Fortune 500 says that “an estimated 500,000 highly-skilled workers at US companies face delays that can exceed 10 years to earn permanent residency.”But entrepreneurs are adventurous, love risk, and are willing to go the extra mile. Notwithstanding the difficulties, entrepreneurs have made New York as important as Silicon Valley or Boston in terms of business startups.In 2008, 116 startups attracted investors and received funding in the Big Apple, a number that rose to 150 in 2009. New York startups have also been recipients of important investments. During the third quarter of 2010, $335 million was invested, an increase of 22 percent compared to the same period in 2009. This comes along with a rise from 56 deals in the third quarter of 2009 to 96 in 2010. It’s easy to imagine how much larger these numbers would be if only the startup visa was approved.The entrepreneur visaIn 2009, US Rep. Jared Polis (D-Colorado) introduced the Employment Benefit Act (H.R. 4259), calling for the reform of the EB-5 visa — the so-called $1 million visa — which grants green cards to immigrants who invest in American business ventures. Polis proposed creating a new visa category, the startup visa, to make it easier for immigrant entrepreneurs to start their business in the US.One year later Sens. John Kerry (D-Massachusetts) and Richard Lugar (R-Indiana) presented the Startup Visa Act of 2010 (S. 3029) for consideration by the Senate, which would also establish a new visa category for the entrepreneur. This visa would provide an immigrant entrepreneur with a two-year visa if he or she was able to show that a US investor was willing to provide a minimum of $250,000 towards the immigrant’s startup venture. The immigrant would receive permanent legal resident status if after two years the company generated at least five full-time jobs in the US and attracted $1 million in additional investment capital or achieved that same amount in revenue.That initial act was replaced and improved with the Startup Visa Act of 2011 (S. 565), introduced by Kerry, Lugar, and Sen. Mark Udall (D-Colorado) on March 14, 2011. Two days after the introduction in the Senate, Rep. Carolyn Maloney (D-New York) introduced a similar act in the House of Representatives (H.R. 1114). Both bills have been referred to the respective committees, an early stage in the legislative process. Next steps will be a report by the Committee, a vote in the House, a vote in the Senate, and finally signature by the president.The enhancements on the 2010 bill were threefold. First, the minimum investment was lowered to $100,000 from $250,000, which is more realistic and closer to the expectations of startup companies. Also, the pool of potential applicants was broadened, giving students with advanced degrees and H-1B visas the opportunity to apply for this new type of visa. Finally, the startup visa was put forth as a way for entrepreneurs with companies based outside the US but generating at least $100,000 in sales in the United States to relocate to America.As Sen. Lugar said, the law “[seeks] to establish a way for the smartest and most entrepreneurial individuals in the world to come to the United States and create jobs. Many are already here studying at our great universities.”This initiative has garnered widespread support. Over 100 US venture capitalists and angel investors sent a letter to the Senate in support of the startup visa last February. A social initiative with a Twitter presence called “Startup Visa Movement” is also lobbying for the law to be passed. Its intense social media campaign includes a virtual letter to Congress through the Votizen platform. At the time this article was written, the letter had already been signed by 4,084 people in 45 different states throughout the country.Although the campaign by supporters of the startup visa has been strong and persistent, the current electoral campaign and the debate around comprehensive immigration reform have shadowed the discussion.Brad Feld, managing director of the venture capital firm Foundry Group and an advocate for the startup visa, says he doesn’t know if either of the bills will pass — although it’s a “mystery” to him why there is resistance to the idea. Large opportunities would be missed if the bills were to fail, he believes: Feld estimates between 1,000 and 5,000 people would apply for the new startup visa, resulting in the creation of 25,000 or more new jobs each year.In the meantime …So what are the options while the startup visa is discussed and — hopefully — passed by Congress?Thinking about the different visa options and immigration statuses is overwhelming and confusing. Processes seem complicated, long, and expensive. However, there are plenty of options available, and the one you choose to pursue will depend on your goal, immigration status, long-term plans, and on whether you are single or married, among other factors.The box below provides a much clearer picture of what an immigrant entrepreneur should expect, what the alternatives are, and how the processes work in practice. Keep in mind, however, that due to the complexity of the immigration system, it does not constitute a detailed legal tool. A multi-disciplinary team of labor and immigration lawyers (as well as tax advisors) must accompany every immigration process.Depending on whether the foreigner wants to invest, work, or stay in the US, there are four visa alternatives:
Thanasis Polychronakis, 33, is one of the many experienced and highly skilled entrepreneurs who is working to establish a business in the United States. (He documented his experience in a blog.) In the last two months, he has spent around $10,000 in lawyer and paperwork fees applying for an E-2 visa (treaty investor). He’s currently waiting for his appointment at the US consulate. (Editor’s Note: After this article was written, Polychronakis’s visa application was denied.)Thanasis — a Greek with a background on computer science and business — refers to the application as a “daunting and soul-racking” process. “I had to overcome great challenges, such as founding and operating a company in the US while I was abroad, collecting required valuation letters from credible experts, and raising a fund in the crisis-stricken Greece,” he said in an interview for New York International.With 12 years experience and an understanding of the challenges of investing in new technologies and social media, Thanasis aims at expanding Bootchat, a way to communicate and tell stories. “Using photo snapshots of yourself along with text, you create what we call a ‘set of frames,’ which can then be shared to your friends or anyone interested, like a photo blog,” he explains.When asked about the benefits of the possible startup visa, Thanassis says it would definitely be beneficial for entrepreneurs: attracting capital would be easier through angel investors or venture capitalists.