This week, two Senators introduced a bill that would reward foreign entrepreneurs for coming to this country and creating jobs. The Startup Visa Act isn’t a new idea, but expands on an old one. It lowers the investment thresholds and job creation requirements, so that it becomes easier for foreign entrepreneurs to get their reward for starting a successful US business — permanent legal resident status.
The Startup Visa Act works this way: Foreigners would be able to get a two-year visa by securing $250,000 in start-up money, $100,000 of which must come from a qualified US angel investor or venture capital firm. Within two years, the foreign entrepreneur must create five new jobs, raise at least $1 million or generate $1 million in revenue. Do that, and they’ll get their green card.
The bill is designed to increase the number of people getting EB-5-type visas. It would create a new category called EB-6. The current requirements for EB-5s are a $1 million investment and 10 jobs created.
Of course, many venture capital groups support the bill. And immigrants like Vivek Wadhwa:
… the unemployment rate in California is now over 12%, a near record high. The national rate is at 10%. Credit markets are totally frozen and small businesses–the most dynamic part of the U.S. economy are suffocating for lack of operating capital. So slightly tweaking a law to allow smart foreigners to jumpstart our economy would seem to be a really easy decision politically and economically. Rather than listening to the emotion of misguided anti-immigrants, we need to listen to reason.
It would appear difficult to argue against a bill that requires immigrants to create jobs in the US in order to get permanent status. But any bill that makes it easier for immigrants to get a green card will face opposition.
Still, foreign entrepreneurs have more options these days. Econsultancy writes from Chile:
For one, the U.S. has one of the highest corporate tax rates in the world when federal and state taxes are combined. The tax code makes rocket science look like child’s play, and the legal system is extremely costly to navigate. In the most popular cities, the cost of living is very high…
…entrepreneurs with mobility should shop around if they’re considering going overseas to start a new business. Here in Chile, venture capital is available and we also have a program designed to lure foreign entrepreneurs, and on paper the incentives look far more appealing than those offered by the StartUp Visa Act. I don’t personally know anybody who has taken advantage of this program, and I wasn’t even familiar with the program before I read about it, but it just goes to show that those who are ready to start a new business are in the catbird seat. Given the desire of so many countries to spur new business creation, entrepreneurs should probably shop around.
What do you think of the Startup Visa Act?
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