Why Does the U.S. Hinder Foreign Entrepreneurs?
March 9, 2023
By: Accel Visa Attorneys, PC
A study conducted by the National Foundation for American Policy in July of 2022 revealed that approximately 55% of America’s startup companies valued at $1 billion or more, have been created by immigrants. Additionally, nearly 64% of U.S. billion-dollar companies were founded or cofounded by immigrants or the children of immigrants, and close to 80% of those companies have an immigrant founder, Chief Executive Officer, Vice President, or similar leading role. The Ewing Marion Kauffman Foundation’s recent report indicates immigrants are almost twice as likely as native-born Americans to become entrepreneurs.
As believers in the immense value of immigrant workers, these statistics paint a proud reality. Foreign investors and startup founders have something that their American counterparts do not. They have the drive to overcome all odds, starting with fighting for a seat at the table in the U.S. workforce. They have a different upbringing and understanding of the world, which enables them to see beyond the limitations that others see. They are resourceful, resilient, and impassioned by ideas.
Yet, U.S. laws and regulations make it so difficult for foreign founders and entrepreneurs to come to the U.S. and start businesses. Every year, we lose those startup entrepreneurs lured away by other countries with softer immigration laws. If the U.S. continues to shut its doors on the innovative business owners, the U.S. will not continue to maintain its economic might in the future.
Today, U.S. immigration rules provide few viable options for entrepreneurs seeking to bring their talent and investments to the U.S. Of the few temporary work visas that ARE available, the U.S. government imposes the most stringent hurdles.
1) E-1 Trader and E-2 Investor Visas:
This visa allows nationals of treaty countries who make a substantial trade in the U.S. or substantial investments in a U.S. business. Notably, access to this visa is limited to a select group of individuals. Treaty countries are generally well-developed countries with infrastructural integrity yet some of the most populated countries globally are still left out of this framework (e.g.: China and India)
2) L-1 Visa:
This visa allows a foreign company to transfer long-time managers, executives, and specialized knowledge employees to work at its U.S. affiliated companies. Sounds easy right? Except the hurdles U.S. Citizenship & Immigration Services imposes on smaller multi-national companies are insane! Denials have increased significantly over the year with no rational reasoning. According to the Cato Institute, the biggest issue regarding the L-1 visa classification are the denials.
3) International Entrepreneur Rule (IER):
Revived by the Biden Administration, the IER is not a visa, rather a discretionary period of authorized stay for up to 30 months, with the ability to renew for an additional 30 months. Among other requirements, the applicant must have substantial ownership of a startup company formed in the U.S. within the last 5 years; the company must receive significant investment from certain qualified U.S. investors or significant awards or grants by a government entity; and the company must have potential for rapid growth. The reality is: this “visa” classification is sadly lacking. It was designed as a way for the U.S. government to investigate U.S. qualified investors and look into their financials and failing to provide a viable pathway towards entrepreneurship for many minority and women immigrant founders. It’s no surprise that fast-forward five years after the announcement of this program, USCIS has yet to release any meaningful application and approval data on this classification. As evidenced in the USCIS Annual Statistical Report for FY 2021, USCIS has shown no reporting for Form I-941 international entrepreneur adjudications.
Sadly, the U.S. has promised progress around start-up visas and while there are many books and articles about a U.S. start-up visa, the reality is that Congress is unable to take action and the Biden Administration lacks the fortitude to take this issue on.
We must keep the American Dream alive and thriving, instead of pushing foreigners to rest their dreams with other nations. Fortunately, Accel Visa Attorneys has been helping start-up founders with brainstorming and exploring other avenues, such as H-1B visas for founders and even O-1 extraordinary ability visas for foreign founders. Interested to learn more? Schedule a consult with our team!