Startup Visa Act Looks Towards Senate

Senators John Kerry (D-Mass.) and Richard Lugar (R-Ind.), along with Senator Mark Udall (D-Colo.), have reintroduced legislation to drive job creation and increase America’s global competiveness by helping immigrant entrepreneurs secure visas to the United States.

 See full press release:  START UP VISAS

The StartUp Visa Act of 2011 will allow an immigrant entrepreneur to receive a two year visa if he or she can show that a qualified U.S. investor is willing to invest in the immigrant’s startup venture.  And in an expansion from the Kerry-Lugar StartUp Visa Act of 2010, the pool of eligible immigrants would now include holders of H-1B visas and entrepreneurs living outside the United States with a market presence in the country.  To accommodate this new type of visa, adjustments would be made to the existing EB-5 visa – which grants visas to foreign nationals who invest $1 million towards the creation of 10 jobs.  Under a new EB-6 category, a visa would be granted to the innovative entrepreneur with intellectual capital, instead of a wealthy foreign investor who is in a position to buy a visa.  The legislation transfers an allotment of the yearly 9,940 EB-5 visas, of which only 4,191 visas were used in FY 2009, to be granted under the new EB-6 category.

Options for Entrepreneurs —  The StartUp Visa Act of 2011 would amend immigration law to give immigrant entrepreneurs three new options for entry or retention of residency:

Option One: Immigrant entrepreneurs living outside the U.S. would be eligible to apply for a StartUp Visa if a qualified U.S. investor agrees to financially sponsor their entrepreneurial venture with a minimum investment of $100,000. After two years, their business must have created 5 new jobs and raised not less than $500,000 in additional capital investment or generate not less than $500,000 in revenue.

Option Two:  Immigrant entrepreneurs currently in the U.S. on an unexpired H-1B visa; OR immigrant entrepreneurs currently in the U.S. who have completed a graduate level degree in science, technology, engineering, math, computer science, or other relevant academic discipline from an accredited United States college, university, or other institution of higher education would be eligible for a StartUp Visa if:

They 1)  demonstrate annual income of not less than roughly $30,000 or the possession of assets of not less than roughly $60,000; and  2)  have proven that a qualified U.S. investor agrees to financially back their entrepreneurial venture with a minimum investment of $20,000.

After two years, their business must have created 3 new jobs and raised not less than $100,000 in additional capital investment or generate not less than $100,000 in revenue.

Option Three: Immigrant entrepreneurs living outside the U.S. would be eligible to apply for a StartUp Visa if they have controlling interest of a company in a foreign country that has generated, during the most recent 12-month period, not less than $100,000 in revenue from sales in the U.S.  After two years, their business must have created 3 new jobs and raised not less than $100,000 in additional capital investment or generate not less than $100,000 in revenue.

Preventing fraud and abuse:

The investor(s) eligible to “sponsor” immigrant entrepreneurs must be based in the U.S. – with the majority of partners being U.S. citizens – and have made $10 million capital commitments over the course of 2 years, with at least four investments exceeding $500,000 as stipulated in applicable SEC investor rules.

The bill has enjoyed widespread bipartisan support from Congress as well as from members of the venture capital community, who criticized the current U.S. immigrant policies for forcing thousands of high paying jobs into other countries. (The Street).  The Street reports that over 40% of Fortune 500 companies were founded by immigrants or their children, including tech giants like Intel, Google and eBay, according to a report from the Partnership for a New American Economy.