EB-5 Immigration Investments: Startup Visas Discussed in Congressional Hearing
On September 14, 2011, the Subcommittee on Immigration Policy and Enforcement of the House Judiciary Committee, directed by House Judiciary Chairman Rep. Lamar Smith (R-TX), heard testimony from two venture capitalists in favor of Congress enacting the "EB-6 Startup Visa." The EB-6 Startup Visa would be in addition to the already existing EB-5 Immigrant Investor Program, otherwise known as the "EB-5 Investor Visa." The proposed EB-6 Startup Visa is contemplated as a complement to the current EB-5 Investor Visa program that granted 2,480 green cards in 2010 to foreigners who invested in U.S. businesses. Such number fell short of the 10,000 green cards the EB-5 Investor Visa program is allowed to grant each year. EB-6 Startup Visa proponents hope to fill many of those unused green card openings with foreign entrepreneurs starting a business in the United States.
Numerous EB-6 Startup Visa bills are currently in various stages in both the House and the Senate. The most recent of which is The Startup Visa Act of 2011, which was introduced in the Senate on March 14, 2011 by Sen. John Kerry (D-MA) and cosponsors Sen. Richard Lugar (R-IN) and Sen. Mark Udall (D-CO) under the bill S. 565, with Senators Kirsten Gillibrand (D-NY), Michael Bennet (D-CO) and Mark Warner (D-VA) joining on later as additional co-sponsors. The Startup Visa Act of 2011 would provide EB-6 Startup Visas to the following individuals under certain conditions.
- Foreign entrepreneurs, provided a qualified U.S. investor agrees to financially sponsor their entrepreneurial venture with a minimum investment of $100,000. Two years following the issuance of the visa, the startup must have created a minimum of five new jobs in the United States and have either: (1) raised over $500,000 in financing or (2) generated more than $500,000 in yearly revenue.
- Foreign entrepreneurs who hold an unexpired H-1B Visa or completed a graduate degree from U.S. universities in science, technology, engineering, mathematics or computer science, provided they (a) have an annual income of at least $30,000 or assets of at least $60,000 and (b) have had a qualified U.S. investor commit at least $20,000 to their venture.
- Foreign entrepreneurs whose business has generated at least $100,000 in sales from the United States. Two years following the issuance of the visa, the startup must have created three new American jobs and either have raised over $100,000 in financing or be generating more than $100,000 in yearly revenue.
Notwithstanding the support of the Obama Administration, the National Venture Capital Association and the Small Business Administration, congressional action on the EB-6 Startup Visa does not appear imminent. Rep. Smith, who has jurisdiction over immigration legislation, appeared skeptical in the hearing. After extolling the virtues of the EB-5 Investor Visa, Rep. Smith stated: "While we can benefit by bringing entrepreneurs to America with their bold ideas, such a program [EB-6] could be susceptible to fraud and abuse. How is the government to determine which economic vision is feasible and which is pie in the sky? How will it root out schemes proposed simply to procure a visa?" In addition, the EB-5 Investor Visa program is undergoing major changes to increase the number of visas granted each year. On August 2, 2011, the Department of Homeland Security ("DHS") issued a press release outlining a series of policy, operational and outreach efforts made by Secretary of Homeland Security Janet Napolitano and U.S. Citizenship and Immigration Services ("USCIS") Director Alejandro Mayorkas to streamline the intake and review process of the EB-5 Investor Visa, including a phased-in implementation of the May 2011 proposed EB-5 streamlining process, which phased plan will likely begin in September 2011. The EB-5 streamlining process includes: (1) extending the availability of premium processing for certain "shovel-ready" EB-5 applications and petitions, (2) implementing direct lines of communication between EB-5 applicants and USCIS, and (3) providing EB-5 applicants with the opportunity to interview in-person or by telephone with a USCIS panel of experts to resolve outstanding issues in an application.
© 2011 Perkins Coie LLP