Written by attorney Sweta Khandelwal

Immigration Incentives for Foreign Entrepreuners

On August 2, 2011, United States Citizenship and Immigration Services (USCIS) announced incentives that would promote start-ups and spur job creation. These incentives are provided to foreign entrepreneurs who seek to start their own ventures in the US. The need for these reforms are obvious: the government is trying to revive the slow economy and attempting to set right its flawed immigration policy, at least so far that it related to innovation and entrepreneurship.

These changes have been summarized below:

I. Changes to the EB-2 category

Foreign Entrepreneur can now qualify for the Employment Based Second Preference (EB-2) category of immigrant visas if (i) he/she has an advanced degree; or (ii) if he/she is a person of exceptional ability. This means that the company that is founded by the Entrepreneur can now sponsor his/her Green Card.

The relevant question is, how can one demonstrate that the entrepreneur has exceptional ability? There is no rule of law that a specific kind of evidence is required. It is the quality of evidence submitted and its relevance that matters. Example: a successful track record in obtaining venture capital funding, participation in prestigious incubators, can all evidence that the immigrant entrepreneur qualifies as one with exceptional ability.

The National Interest Waiver can now apply to the entrepreneur that will exempt him/her from having a job offer in the US. Entrepreneur can petition for himself if he/she can demonstrate that his or her business enterprise will create jobs for U.S. workers or otherwise enhance the welfare of the United States. For example, the entrepreneur may not be taking a job opportunity from a U.S. worker but instead may be creating new job opportunities for U.S. workers. The creation of jobs domestically for U.S. workers may serve the national interest to a substantially greater degree than the work of others in the same field. So this exempts the entrepreneur and his company from filing the Labor Certification.

There is a 3 pronged test to determine when it is in the national interest for the entrepreneur to be exempt from the requirements of a job offer:

  1. The entrepreneur must seek employment in an area that has substantial intrinsic merit – the focus is on the area of employment rather than qualification of the entrepreneur
  2. The proposed benefit is national in scope (e.g. jobs created locally will also create related jobs elsewhere in the country)
  3. The proposed employment presents a significant benefit in the field of endeavor identified in part 1 above (i.e. area of substantial intrinsic merit

Thus, the entrepreneur will qualify for a NIW if he demonstrate that his business will create jobs for U.S workers or otherwise enhance welfare of the US.

II. H-1B Visa for entrepreneurs:

In January 2010, USCIS issued a guidance (the Neufeld memo) that placed a greater emphasis on documenting the employer-employee relationship than in the past. This made it extremely difficult for individuals with an ownership interest in the petitioner to obtain a H-1B Visa.

USCIS has now recognized that an beneficiary, who is the sole owner of the petitioner company, may be able to establish a valid employer-employee relationship for H-1B purposes. Company’s right to control a sole owner/shareholder employee can be demonstrated through a separate Board Of Directors that can hire, fire, pay, supervise or otherwise control the beneficiary.

III. Premium Processing for certain EB-1 cases

USCIS is introducing premium processing services for Green Cards for executives and managers of Multi National Companies with effect from January, 2012.

IV. EB-5 process streamlined

The Employment Based Fifth Preference visa category (EB-5) makes 10,000 visas available annually to immigrant investors who invest in commercial enterprises that create 10 U.S. jobs. Investors may petition independently or as part of a USCIS designated Regional Center.

USCIS is extending the availability of premium processing for certain EB-5 petitions. It is implementing direct lines of communication between the investors and itself. Investors now have an opportunity for an interview before a USCIS panel of experts to resolve outstanding issues in the petition.

V. Follow-up action by USCIS

USCIS is conducting public engagements with entrepreneurs and stakeholders for their input and feedback on the typical problems that they face in their business so far that it related to immigration. Based on this feedback, they are making modification to their internal policies and guidelines. Further, they are providing internal training to their staff on the unique characteristics of entrepreneurial enterprises and start-up companies.

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