Making it Easier for New Immigrant Entrepreneurs – Changes in Policy and Law Can Facilitate Job Creation in the U.S.

Written By: Deborah Notkin, AILA Media-Advocacy Committee

For many years, I have received inquiries from foreign students attending U.S. universities about post-graduation employment visa options. What is strikingly different this year is that many students are not interested in visas to fit prospective job offers in the U.S. Rather, they are calling to find out how they can legally start up their own businesses and set down roots here. Many are Science, Engineering, Mathematics or Technology (STEM) graduates and are eager, innovative and willing to risk everything to transform their U.S. educations into American businesses which will create jobs for U.S. workers.

More often than not our current visa system disappoints these creative young minds. America’s limited work visa options for start-up entrepreneurs, coupled with USCIS’s increasingly hostile interpretation of the regulations, inhibit these eager young foreign nationals from achieving their dreams in the U.S. Just last week the media and blogosphere was shocked when USCIS denied a visa to Amit Aharoni, a budding engineer from Israel. Mr. Aharoni had secured $1.65 million in venture capital funding to launch a company called CruiseWise.com, an online cruise booking company. He employed nine U.S. workers and his website was ranked by Business Insider, as one of the “20 Hot Silicon Valley Startups You Need to Watch.”

Mr. Aharoni got his visa after ABC News reported the story. But his petition approval should have happened without going to the media. More tragically, this case is not an isolated circumstance. Denials of these types of petitions have become the norm at U.S. Citizenship and Immigration Services. Many immigration lawyers, including myself, struggle everyday trying to get legal status for these budding entrepreneurs. Unfortunately, USCIS has made the standards stricter rather than being more open to these job creating, innovative foreign entrepreneurs.

Even with our current economic woes, the U.S. remains the country of choice for many to build businesses and set down roots. It might be because of the openness of America or our multi-cultural melting pot traditions, or maybe the perception that class background and government connections are not necessary to succeed here. Whatever it is, by making entrepreneurial options harder we are losing talent and new job opportunities for U.S. workers. A 2006 study by Stuart Anderson and Michaela Platzer, commissioned by the National Venture Capital Association, concluded that 95% of immigrant founders of private companies would choose the U.S. as the country to start new companies if given the choice.

Much has been written recently about this immigrant entrepreneurial power and how the U.S. is losing out. In an article in Techcrunch, Vivek Wadhwa – well-known entrepreneur, academic, and author on immigrant entrepreneurial power – has laid out examples of immigrant entrepreneurs who left the U.S. because of visa problems and established enterprises in other countries which provided hundreds of jobs. In June 2011, the Partnership for a New American Economy published a report about the entrepreneurial track record of immigrants in the U.S.

Our current restrictive policies on non-immigrant visas which have been used for entrepreneurs, along with the inability of Congress to act on productive legislation to improve these opportunities are to blame.

The E-2 Treaty Investor visa is available to nationals of countries that the United States has a treaty of friendship, commerce and navigation, or a free trade agreement that includes the E-2 visa option. But we don’t have treaties with many countries who have eager entrepreneurs. Of particular note is the absence of an E-2 treaty option with India, the People’s Republic of China and Israel (Mr. Aharoni’s country of nationality) which could provide the U.S. with the job-creating innovators we need.

The H-1b visa, commonly used for professional positions, had in the past been used successfully for foreign nationals who were investors in viable businesses employing themselves and others. But a recent change in policy narrowing the technical definition of “employee” has thwarted the H-1b option. Although USCIS has indicated it is in the process of reviewing its policy and educating its adjudicators, there has not been a significant improvement in adjudications reported.

A current legislative proposal, the Immigration Driving Entrepreneurship in America (IDEA) ACT of 2011 introduced by Zoe Lofgren (D-CA), creates new options for foreign nationals wanting to develop start-ups in the U.S. and provides a pathway to U.S. permanent residence predicated on success of the business. But the chances of this bill being given thoughtful consideration by the current Congress, even as a starting point of discussion, are slim to none.

There is no one solution to fix our ailing economy, but clearly facilitating opportunities for foreign entrepreneurs to create businesses and jobs for workers in the U.S. should be a no-brainer. Both the current Administration’s policies and the logjam in Congress preventing meaningful initiatives from getting accomplished are hurting positive economic opportunities and negatively impacting the U.S. position in the global economy.