Secretary of Homeland Security Janet Napolitano and U.S. Citizenship and Immigration Services (USCIS) Director Alejandro Mayorkas announced today a series of policies and outreach efforts to promote and attract foreign entrepreneurs, particularly in the high-technology sector. The objective of these initiatives is to stimulate investment by attracting foreign entrepreneurs to the U.S. to form start-up companies, create jobs and invest in areas of high unemployment.
The USCIS policy initiatives include 3 major announcements:
- Employment-based second preference(EB-2) Eligibility: USCIS has issued updated Frequently Asked Questions (FAQs) on the availability of employment-based second preference (EB-2) immigrant visas to entrepreneurs. The FAQs confirm that entrepreneurs may qualify for the EB-2 "exceptional ability" classification and may also qualify for the national interest waiver (NIW) classification. Notably the NIW classification does not require a specific job offer to support the immigrant petition, provided the individual is able to demonstrate that his/her business endeavors will serve the United States national interest. The USCIS plans to provide additional internal training to its examiners on the unique characteristics of entrepreneurial enterprises and start-up companies.
- H-1B Visas: With respect to the H-1B classification, the USCIS has also issued updated FAQs to clarify that a sole owner of a petitioning company may qualify for H-1B status. Existing USCIS' policy has been to require an employer-employee relationship to qualify for H-1B status. The recent clarification confirms that a sole owner beneficiary may still be able to establish an employer-employee relationship if, for example, it is established that the petitioner's Board of Directors has the right to control the beneficiary with the ability to hire, fire, pay, supervise or otherwise control the beneficiary.
- EB-5 Immigrant Investor Program: The USCIS' initiatives will also enhance the EB-5 immigrant investor program, taking into account the feedback on the streamlining enhancements previously proposed this May. Enhancements will include a new phased plan to roll out the proposed measures, including the availability of the premium processing service for certain EB-5 petitions, improving the lines of communication between petitioners and the USCIS, and providing the opportunity for an interview before a USCIS panel to resolve outstanding issues in petitions. The first phase should begin within the next 30 days.
Lastly, the USCIS is launching a series of engagement opportunities for entrepreneurs and startup companies to focus on how the USCIS can address the unique circumstances of entrepreneurs, new businesses and startup companies through its policies and regulations in employment-based immigration. Further information regarding the USCIS' public meetings is available at www.uscis.gov/outreach.
The full text of the USCIS' announcement is available at: http://www.dhs.gov/ynews/releases/20110802-napolitano-startup-job-creation-initiatives.shtm.
AnalysisThe policy changes announced today by Secretary Napolitano and Director Mayorkas acknowledge the important role that foreign-born entrepreneurs play in economic growth in the United States. This welcome announcement is due in large part to the efforts of academics, lawyers and entrepreneurs who have long-since advocated for immigration policies aimed at encouraging investment and innovation in the United States. The efforts of Vivek Wadhwa, a leading academic and writer on entrepreneurship, in particular have helped the USCIS see how changing its policies can foster economic growth and create jobs.
While today's announcement is a welcome first step towards recognizing the important role of foreign entrepreneurs, much work remains to be done to level the playing field. It will still be extremely difficult for majority owners of startup companies to obtain H-1B classification due to the USCIS' restrictive view of what constitutes a valid "employer-employee" relationship. Majority owners will need artificially to create Boards of Directors where they are not otherwise needed in order to prove that they are controlled by persons other than themselves. It will also still be difficult for owners of startup companies to obtain permanent residency through the PERM labor certification process due to Department of Labor policy which restricts a person with an ownership interest in a 'closely held' company from being sponsored by that company.
Today's announcement also creates new ambiguities in existing policies. Most notably, the new "EB-2 FAQs" suggest that "Aliens of Exceptional Ability" petitions will in all cases require the sponsoring employer to file a PERM labor certification beforehand. This suggestion is contrary to the language in the regulations, which exempts "Schedule A, Group II" Aliens of Exceptional Ability from the labor certification process. It is also unclear whether a PERM application filed for an Alien of Exceptional Ability must actually state the criteria for the Alien of Exceptional Ability category as requirements for the job opportunity on the application. If so, such requirements may be viewed as unduly restrictive by the Department of Labor, and lead to denial of the application. Until these and other ambiguities are resolved, it will be impossible to assess the impact of the USCIS' policy changes announced today.
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