January 15, 2012
President Barack Obama marked the 1-year anniversary of the Start-up America Partnership by announcing his legislative plans for the program. The main idea about Startup America Initiative is to attract and encourage foreign-born entrepreneurs and highly-skilled immigrants so they can start up the next generation of small businesses in the United States. President Obama argues that, entrepreneurship is critical to the country’s long term success. Therefore, he asked Congress to send him a bill that does even more to expand access to capital and cut taxes for America’s entrepreneurs and small businesses.
“Start-Up America” has several implications for both immigrant and non-immigrant visa seekers. One of them is the Treaty Investor (E-2) visa where the applicant must have plans to develop and direct the operations of an enterprise in which he/she has invested, or is in the process of investing a substantial amount of capital in the United States. There is no limit or specification on the type of business or trade that may be carried out by a person seeking an E-2 visa. However, a business cannot be against the laws of the state in the U.S. and the enterprise must be registered.
In order to be qualified for E-2 visa an applicant must be the national of the country that’s has an investor treaty with the U.S. The applicant must be either serving the company in a capacity that is supervisory or executive in nature or involves skills essential to the operation of the business or must be a 50 per cent owner of the company. One of the most important fact about the E-2 visa is the applicant must intend to depart at the conclusion of the duties in the U.S. however there are certain limitations of E-2 Visa such as, the applicant is restricted to work only for the specific employer or self-owned business that acted as the applicant’s E-2 visa sponsor and the visas are approved for two years at a time. Once the applicant approved for E-2 visa his/her spouse may seek employment by applying for Employment Authorization using Form I-765, Application for Employment Authorization. However, applicant’s children are not allowed to work in the U.S.
Unlike E-2 visa, in EB-5 visa (Immigrant Investor Visa) the applicant may qualified for permanent resident status (green card). The EB-5 program requires an alien to invest or be actively in the process of investing, either US$1,000,000 or US$500,000 which is directly or indirectly results in the creation or preservation of ten full time jobs for a two year period. In order to apply for EB-5 visa the principal applicant must prove the source of the investment funds. Funds for the investment must come from a lawful source including, profits from the sales of a property, stocks or bonds, profits from business, business transactions, gifts, and inheritances. To prove the source of investment funds, USCIS requires five years of tax returns, five years of bank records, proof of ownership in any businesses, financial statements for each business and business licenses. If the capital came from a specific transaction, such as sale of a house, inheritance or gift, the applicant must prove the transaction occurred, by providing an official document, such as a closing statement or contract or other official documents.
Start-up America Initiative provides 3 different options for entry or retention of residency to the applicants. These are;
1) Under the proposed legislation, instead of the visa going to an investor, a startup company founder or entrepreneur who receives a minimum equity investment of $250,000 could qualify as an EB-5 visa recipient. Immigrant entrepreneurs living outside the U.S. would be eligible to apply for a Start-up Visa if a qualified U.S. investor agrees to financially sponsor their entrepreneurial venture with a minimum investment of $100,000. After two years, the business must have created 5 new jobs and raised not less than $500,000 in additional capital investment or generate not less than $500,000 in revenue.
2) Immigrant entrepreneurs currently in the U.S. on an unexpired H-1B visa; or immigrant entrepreneurs currently in the U.S. who have completed a graduate level degree in science, technology, engineering, math, computer science, or other relevant academic discipline from an accredited United States college, university, or other institution of higher education would be eligible for a Start-up Visa if; They demonstrate annual income of not less than roughly $30,000 or the possession of assets of not less than roughly $60,000; and have proven that a qualified U.S. investor agrees to financially back their entrepreneurial venture with a minimum investment of $20,000. After two years, their business must have created 3 new jobs and raised not less than $100,000 in additional capital investment or generate not less than $100,000 in revenue.
3) Immigrant entrepreneurs living outside the U.S. would be eligible to apply for a Start-up Visa if they have controlling interest of a company in a foreign country that has generated, during the most recent 12-month period, not less than $100,000 in revenue from sales in the U.S. After two years, their business must have created 3 new jobs and raised not less than $100,000 in additional capital investment or generate not less than $100,000 in revenue.
It is important to note that these are just proposals. We hope to see bipartisan support for these initiatives.
In conclusion, Obama Administration supports legislative measures to expanding access to capital and cut taxes that would encourage immigrants, foreign-born entrepreneurs to start-up small businesses.