In November 2012, USCIS created a new Entrepreneur Pathways portal purportedly to make it easier for foreign national entrepreneurs to navigate the immigration system. Previously in 2011, USCIS Director Alejandro Mayorkas announced a new Entrepreneurs in Residence (EIR) initiative to promote better adjudications for entrepreneurs. EIR would also include training adjudicators about real world business scenarios including start up ventures, financing, hiring methods, and other features of the current entrepreneurial space. Director Mayorkas then assembled an EIR “tactical team” made up of USCIS service center adjudicators and administrators, and private sector entrepreneurs. Unfortunately, the Entrepreneur Portal, while a potentially helpful EIR initiative to explain what programs already exist, lacks any new changes to make adjudications easier for entrepreneurs. However, as noted in my blog post, USCIS Entrepreneurs in Residence Update Engagement Session, Mr. Mayorkas stated earlier this week that the portal is a work in progress and that it is intended for individuals abroad so that they can plan their careers as entrepreneurs in advance of coming to the US. This view may not be as helpful to those entrepreneurs who suddenly or by happenstance develop a new idea for a business after they are here under other circumstances. Nonetheless, it appears the portal is intended to be a one-shop stop for any entrepreneur.
The first part of the new portal, “Getting Started,” is billed as “high level,” but it is really just a quick overview of very basic existing immigration concepts with some fancy photographs. Next, entrepreneurs are invited to “engage” with USCIS, of which there will be only four opportunities in a year, with the first meeting set for February 2013 in Austin, Texas. Engagement sessions can vary: a) USCIS explains how they plan to do something or what their policy is, more in the form of announcements; b) some engagement sessions are listening sessions where USCIS wants to hear from the public or stakeholders but USCIS doesn’t offer any its own thinking on positions; and c) some engagement sessions are a little more interactive with stakeholders. Sometimes USCIS posts the notes from these meetings online, and sometimes they don’t.
The portal then offers the “Visa Guide.” This is where the fun begins. The only topics discussed are B-1 Business Visitors, F-1 Students, H-1B Specialty Occupations, O-1 Extraordinary Ability Aliens, L-1 Intracompany Transferees, and E-1/E-2 Treaty Traders. Based on the recent engagement session, it appears EIR will now focus on permanent pathways. Keep in mind that all of this effort by the administration is to focus on job creation by small business while Congress fails to enact meaningful changes to the employment based immigration system. Thus, all of the discussion within the EIR portal is just existing avenues of immigration. While USCIS headquarters does outreach on its initiatives to help entrepreneurs, what happens on the ground in the context of individual application adjudications can be a totally different story. Meanwhile, the EIR portal focuses on just these categories for now:
B-1 Business Visitors You can’t be an entrepreneur in the US in B-1 status since one must work for a company abroad because the visa holder must maintain a permanent home abroad. But, a prospective entrepreneur can come to the US to investigate opportunities, attend meetings and trade shows, take orders for the company abroad, and engage in some other limited activities but not local labor for compensation.)
F-1 Students One can’t work in F-1 status except on campus or toward the end of one’s program, when the work must be related to the subject of the studies, known as practical training. F-1 Optional Practical Training isn’t too helpful for entrepreneurs whose services or capital might be needed for more than a year, or up to 29 months if working in the STEM fields. However, F-1s can be self-employed. For the longer STEM OPT, the employer must use E-Verify. This might be enough to get a business started and off the ground, but the entrepreneur will need to switch to something else to stay longer in the US.
H-1B Specialty Occupations – H-1Bs get the most publicity, bad and good. But, these visas are not even available for first-time applicants in the private sector when the annual cap is reached, often within a few months of the opening of filing season. For example, right now, entrepreneurs/employers cannot even file until April 1, 2013, and only then for jobs that cannot start until October 1, 2013, Depending upon the strength of the economy and hiring trends in April, it could be anywhere from a day or a couple of months when applicants can file before the annual quota is used up for the next fiscal year starting October 1. Will the person be employed by or “at” an “affiliated” institution of higher education or government or nonprofit research organization so that a visa could be obtained all year long? What about the restrictions on the employer-employee requirement in the “Neufeld Memo”? While USCIS purports to suggest that entrepreneurs can get H-1B visas if they are not self-employed, i.e., where there is a board of directors with authority to hire, supervise, and fire the H-1B worker, in actuality, down on the ground, the adjudicators have a very hard time with H-1B entrepreneurs. Many of these cases are denied, or at the least, are subject to extensive Requests for Evidence (RFE) and thus, lengthy delays. And, what about the presumption of fraud that seems to permeate every small business whether or not a new start up resulting in multi-page RFEs and increasing denials? While H-1Bs are not impossible for the start up entrepreneur, they are difficult to get in addition to the timing/cap issues.
Other problems for entrepreneurs seeking H-1Bs are the requirement to be paid a wage (v. equity position), the requirement that the job be a specialty occupation or one that requires at least a bachelors degree in a subject related to the job. A CEO might require a business degree, but many business or marketing degree cases are rejected as being too broad of a program or occupational requirement when there are a lot of CEOs without degrees. In addition, H-1B cases are also governed by US Department of Labor regulations that govern wages and working conditions. For example, the beneficiary has to earn at least a certain wage, and post wage and conditions information in public view for other workers at the site to see. Adjudicators frequently question whether a start up has the ability to pay that offered wage. Moreover, USCIS could say that a CEO position is not needed in a small start up. So, while the headquarters goal of helping entrepreneurs is a lofty one, in reality, down on the ground, the application adjudicators don’t view these cases in the same way. These are just a few of the problems entrepreneurs face these days with H-1B visas. The person with the idea and gumption may be forced to take on investors or advisors thereby diluting the entrepreneur’s position just to meet the employer-employee requirements.
O-1 Visas O-1 visas are for the creme de la creme workers – those of “extraordinary ability.” Not all entrepreneurs are at the top of their fields. Some of the best ideas are coming from people still in school (even high school), not in school, or just graduating who haven’t yet made their mark on their fields. O-1 petitions also require input or advisory opinions from peer groups in the field, plus a host of documentation about the person’s accomplishments in the field. Like the H-1B visa, an employer-employee relationship is required, but unlike the H-1B, an O-1 visa applicant can also show instead a US agent relationship or a foreign employer with a US agent.
Two other more useful categories for entrepreneurs are the L-1 Intra-company Transferee Visa and the E Treaty visa. Like the preceding categories, they both have their pros and cons.
L-1 Visas There must be a foreign company abroad with common ownership and control with a US company. This can be a variety of arrangements, but fundamentally, the foreign national must have been employed for a year in the preceding three years before application by one of the related foreign companies before transfer to the US. In addition, only three types of individuals can have L-1 visas: executives, managers and those with “specialized knowledge.” The applicant must have held one of these positions abroad and will hold one of them in the US. Managers and executives can hold L-1A up to seven years; specialized knowledge applicants hold L-1Bs valid for up to five years. In either case with a new US start up, the person will hold the visa for only one year. To get a new extension, the petitioner must show the company is growing either in revenues or US hires. Changes in ownership down the road can cause the beneficiary to lose status if there is no longer any continued common ownership and control. An IPO or the introduction of other investor/owners down the road may disrupt the required relationship with the company abroad, thereby compromising the L-1 visa holders’ eligibility. L-1Bs in particular can count on a very, very difficult adjudication process, RFEs and the potential for high denial rates. L-1As are also having difficulties these days, even if previously approved for L-1A. Small companies will be heavily scrutinized. So, while the L-1 visa can be a great option for foreign entrepreneurs with experience or track records abroad, what the EIR Tactical Team may envision is not always evident from the adjudication track records. L-1s should be a driver of job growth and entrepreneurship in those cases with existing overseas operations.
E Visas There are two types of E Visas: E-1 Treaty Trader and E-2 Treaty Investor. These visas are only good for individuals who come from, i.e., have citizenship in, one of the treaty countries. No foreign entity is required to exist as in the L-1 context. However, the US company must be primarily owned (at least 50%) by nationals of the treaty country and the applicant must be from that same treaty country. Traders must engage in trade primarily between the US and treaty country (imports, exports or both of goods or services). Investors, on the other hand, are focused on the size of their investment in the US entity, which must be “substantial.” There is no set dollar amount of capital required (cash, equipment or inventory), but the amount required mustl be relative to the nature and type of the business involved. E-1 and E-2 visa holders must be Executives or Managers/Supervisors or Essential Skill employees from the treaty country. E-2 visa holders can also be the direct investors who come to “direct and develop” their investments. The E visas are a good visa for entrepreneurs coming from the right countries, they can meet the trade or investment requirements, and will hold the right position. However, like in the L-1 situation, down the road if the ownership interests (and nationalities) change, the E visa holder can lose status.
It’s unclear what USCIS was hoping to accomplish with the Entrepreneurs Pathways Portal except to lump some of the visa categories into one place if someone can’t navigate the same exact requirements on the USCIS.gov website. It certainly doesn’t discuss the EB-5 immigrant investor program or some of the other employment based permanent residence categories or other work visas. And, of course, it leaves out the possibility that maybe an entrepreneur’s best pathway might be immigration through an existing qualifying relative, being the dependent spouse on a work permit that is generic to allow all sorts of employment arrangements, or perhaps the person is a citizen and doesn’t know it.
Without meaning to sound too negative about each of the categories above, the fact is, we lack a straight-forward “entrepreneurs visa” that doesn’t require an initial investment of $500k or more such as the EB-5 program. Each of the above categories (except the B-1) can work with the right set of facts, qualifying business arrangement(s), staff, advisors or board of directors, the right visa holder credentials, and with careful strategic planning within the letter of the law. Most importantly, managing the entrepreneur’s expectations is essential given the timing or other limitations of each category. This is where engaging experienced immigration counsel can be more beneficial than doing it yourself or using counsel or non-legal advisors who lack the experience, qualifications, and in some states, the legal authority to provide immigration advice.