Visas for Entrepreneurs?
From Robert Morris to Levi Strauss to Sergey Brin, immigrants have built the businesses which built our nation from colonial times to the current day. The immigrant shopkeeper and restaurant owner are stock characters in American movies, literature, and TV. Here in Chicago, more than 27% of all businesses are owned by immigrants, according to statistics from the American Immigration Council, with immigrants going into business at a higher rate than those of us born in the U.S.
Given the history, prevalence, and cultural influence of immigrant entrepreneurs, most people assume that any person with a strong work ethic, a bright idea, and some money to start things off could come to the U.S. and start a business. The Obama administration has also been promoting the idea of entrepreneur immigration, through an "entrepreneur in residence" program which brought in business leaders to advise immigration bureaucrats on policies and practices to support entrepreneurs, and through the new "entrepreneur pathways" website to guide new business owners through their visa options. As thousands of potential entrepreneurs discover every year, however, money, brains, and hard work are no guarantee of entry to the United States.
Starting a new business is never easy; every entrepreneur must find financing and facilities, must learn local business regulations, tax requirements, and other legal matters. Besides all of this, an immigrant entrepreneur must must plan in advance for how he or she will be able to maintain a lawful immigration status in the United States. All of the many business visas have their own specific requirements. The business structure (partnership, corporation or LLC) can affect which visas may be possible for an owner. The duties and job description of the business owner, the length of time she has worked for the company, her nationality and the nationality of other owners all are factors in determining what sort of visa, if any may be available. How much money the owner has invested in the business, how profitable the business becomes and how many people it employs can all be factors as well.
Let's look at the a few of the visa options on "entrepreneur pathways" through the eyes of a prospective business owner, say a graduate student with a degree in engineering who spent 2 years of "optional practical training" perfecting an improved design for low-flow faucets and showers with an classmate and business partner who was also on a student visa. They have the patents and have formed a corporation. They scraped together $30,000 of their own funds through savings and gifts from family, and also have lined up American investors. They want to stay in the U.S. to start marketing and manufacturing their products. What are their options?
Option 1 on "entrepreneur pathways" is a B-1 visa. This is the classic visa for business travel. Assuming our business partners are admissible (i.e. no criminal issues, immigration violations, or other problems), they could probably get this visa. However, with this visa they could not actually work in the U.S. or earn money here, and they would have to maintain residence overseas. It's a fine option for foreign business owners who want to come the U.S. to negotiate deals or shop for suppliers, but it's not an option for anyone who actually wants to work at a business here.
Option 2 is F1/OPT. Our business partners have already used this option, it is how they were able to get their advanced degrees, and then spend two years (12 months plus 17-month extension for STEM degrees) in rather flexible work arrangements related to their area of study. However, once they have used up their time, this option is gone, unless they deceide to study for another degree. For now, their OPT time is used up.
Option 3 is H-1B. This option could allow our partners to work as employees of their company, provided they are very careful about their business structure, their job descriptions, their pay scale, and the timing of their applications. This visa was really designed for companies looking to fill vacancies in professional and specialty occupations. Much of the work that goes into running a start-up is just not covered by the H-1b visa, if our business owner wants an H-1b visa, he will have to create a position for himself at the new company which matches his professional education and stick strictly to that job description. For example, the new company might seek to hire him as a design engineer, and if he is granted an H-1b for that position, then he can do any work for the company that falls within that job description, but he would not be allowed to spend significant time on other business tasks like bookkeeping, sales, and marketing. The company also must be able to pay him the prevailing wage for a design engineer, his pay cannot be dependent on the company's profit or loss. The company needs to show that it could fire him or replace him like any other employee.
Then, even if the company and the job description and compensation are perfectly acceptable to the Department of Labor and USCIS, our business owner still needs to play the lottery. The government begins accepting H-1b visa petitions for positions at private companies April 1st of each year. Because demand outstrips supply for the H-1b visas, the government usually receives more applications than it can fill within the first few days. So all the petitions received in the first week of April are put in to a lottery. If our business owner is not selected in this lottery, then he's out of the running for the H-1b this year, regardless of how good his business is or how perfect his petition. He will have to scramble for another option, or leave the country.
If he does win the lottery, then USCIS will begin to scrutinize his petition. If they are convinced that this is a bona fide professional employment position paying the prevailing wage for a design engineer, then he may be issued a visa which would allow him to start work in OCTOBER. What is the company supposed to do between April and October? Well, hopefully our entrepreneur timed everything just right so that his OPT time had not expired before the company filed his H-1b petition, that way he can continues to work in "cap-gap" status. Otherwise, the company will need to manage without him for some months, and he may even need to leave the country. If everything goes perfectly, the maximum time he can work for the company in H-1b status is six years.
Option 4 is O-1A. This is only available to those elite few at the very top of any profession. Our hypothetical entrepreneur is not at this level.
Option 5 is an E-2 Treaty Investor visa. This is only available to citizens of certain countries. If our entrepreneur does happen to be from one of these countries, he'll then need to show that he has put in substantial capital investment into the company ($50,000 at the very minumum), and that he has controlling ownership or operational control. Conversely to the H-1b, he'll need to show that he is working in a managerial role, not as a typical employee. He will also need to show that the company is doing substantial business, not just making enough profit to support the owners. This visa is issued for two years, but may be renewed multiple times.
Not mentioned on the website is the E-1 Treaty Trader visa, available to citizens of some countries. Like the E-2 investor visa, this is a two year visa that may be renewed many times. It is only available for businesses owned by citizens of treaty nations doing international trade between the treaty nation and the United States. The visa applicant must be working in an executive role, not just doing low-level work. As with the E-2, the business must be substantial, able to support more than just the visa applicant.
As you can see from the above examples, there is no single perfect visa for an immigrant entrepreneur. The available options are either for executives and investors, or for professional or specialty workers. Unlike a typical start-up owner, the immigrant entrepreneur will not be able to take the "jack of all trades" role at his company. The immigrant will need to be able to clearly define his job and his compensation, and may need to explain details of the business ownership and structure which are not typically included in a business plan. Plus, all of this might need to be done on a very specific schedule.