On January 25, 2022, members of Congress proposed the following measures within the America COMPETES Act of 2022, the omnibus funding bill, that among various other measures, would provide visas for immigrants who would positively contribute to technological innovation:
- The “W Visa” or “Non-Immigrant (temporary) Startup Visa” for entrepreneurs with an ownership interest in a start-up entity or essential executive or managerial employees of a start-up entity, and their spouses and children
Congress is seeking to establish the start-up visa, which is an effort that was put into motion by the Obama administration to some degree of success. See: International Entrepreneur Rule (IER). The Let Immigrants Kickstart Employment Act (the “LIKE Act”) is a bill that encourages immigrant innovators to establish and develop their venture capital-backed start-up companies in the United States to spur economic growth, create jobs for American workers, and enhance our competitive advantage on the world stage.
An individual qualifies for a new temporary W visa for an initial three years if:
- The individual possesses an ownership interest of not less than 10% in a start-up entity;
- The individual will play a central and active role in the management or operations of the start-up entity;
- The individual possesses the knowledge, skills, or experience to substantially assist the start-up entity with the growth and success of its business; and
- During the 18-month period preceding the filing of the petition, the start-up entity received at least $250,000 in qualifying investments from one or more “qualified investors”; or at least $100,000 in qualifying government awards or grants.”
The bill allows for an extension of the W (temporary) status for an additional three (3) years if the individual possesses at least a 5% ownership stake, will continue to play a “central and active role” in management or operations, has received at least $500,000 in “additional qualifying investments,” created “at least 5 qualified jobs” or “generated not less than $500,000 in annual revenue in the United States and averaged 20% in annual revenue growth.”
Additionally, the individual may be eligible for two additional extensions in one-year increments to continue to satisfy the aforementioned criteria where “substantial” progress have been made. Even if the start-up entity only partially meets one or more of the aforementioned criteria, other reliable and compelling evidence that the start-up entity has substantial potential for rapid growth and job creation may satisfy requirements for extension. It is also notable that the spouses of W non-immigrants shall be eligible for employment authorization.
An entrepreneur in W status may adjust status to lawful permanent resident without being placed in a green card backlog (i.e., they are exempt from the numerical permanent visa quotas) if the individual has maintained W status, ownership interest in the startup and an active and central role in the company, and the startup has “created at least 10 qualified jobs and . . . has received not less than $1.25 million in qualifying investments . . . or generated not less than $1 million in annual revenue in the U.S. in the two-year period preceding the filing of the petition.”
The startup visa’s impact could be significant. The National Venture Capital Association estimates that Start-ups create an average of 3 million net new jobs per year, more than four times as many jobs as mature companies. Despite widespread evidence that high-skilled immigrants are fueling the next generation of high growth companies, our current immigration laws don’t provide a viable visa option for such individuals to start a new venture. The LIKE Act creates a new temporary visa for founders of start-up entities, as well as the opportunity for lawful permanent residence if the start-up entity meets certain growth-related benchmarks that demonstrate the founder has a proven track record of success in business development.
- The exemption from numerical permanent visa (“Green Card”) quotas For STEM Ph.D.s, and their spouses and children
Congress is seeking to exempt STEM Ph.D.s from numerical permanent visa (“Green Card”) quotas to allow U.S. employers to more expeditiously employ Ph.D’s to engage in work in the United States in a field related to such degree. For purposes of this measure, the bill proposes a broader definition of STEM meaning “a field included in the Department of Education’s Classification of Instructional Programs taxonomy within the summary groups of agricultural sciences, natural resources and conservation, computer and information sciences and support services, engineering, biological and biomedical sciences, mathematics and statistics, military technologies, physical sciences, or medical residency and fellowship programs, or the summary group subsets of accounting and related services and taxation.”
Increasing immigration opportunities for Ph.D’s should be a significant benefit to the U.S. economy. Postdoctoral researchers work at U.S. universities after completing their Ph.D.s and play a significant role in research in the United States. Approximately 56% of postdocs at U.S. universities are on temporary visas, with many in biological sciences, medical sciences and engineering. A large number of PhD.s with foreign degrees assist in research and development.
The new measure would allow many more an opportunity to stay and contribute in the United States. It is also notable that an indirect benefit of this measure is that employment-based green card backlogs should be reduced generally because Ph.D.s who previously would have used a green card number would now be exempt from the numerical limits.
The Congressional House is expected to vote on the America COMPETES Act of 2022 as soon as this week. The legislation, including the new immigration provisions, would need to be reconciled with (and pass) the Senate and signed by President Biden to become law.
Written by Chris Costa, Senior Associate at Drummond Advisors, and Heitor Vitor, Paralegal at Drummond Advisors