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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