A recent New York Times article, “Countries Seek Entrepreneurs From Silicon Valley,” shows a picture of a billboard sign on U.S. 101 (the highway that runs through Silicon Valley), which has written on it:


H-1B Problems? PIVOT to CANADA New Start-up Visa Low taxes immigration.gc.ca/startup.


Canada isn’t the only country that recognizes the value in the foreign nationals who are in the U.S. who want to start businesses with angel money or venture capital money. The article indicates that Australia, Great Britain, and even Chile have specific visas for foreign nationals who have investment money for start-up companies. If these countries recognize the potential of these immigrant entrepreneurs, why doesn’t the U.S.?


Apparently some people do recognize the need to keep this talent in the U.S. and there is a provision in the proposed Comprehensive Immigration Reform (CIR) bill for a visa for entrepreneurs with investor money. However, a new specific visa shouldn’t be necessary as the U.S. has sufficient visa categories that foreign nationals should be able to use to start new companies.


The H-1B, L-1, and E visa categories could be used for start-up companies with investor money. However, the H-1B and the L-1 visa categories have been so limited or restricted in recent years that it causes the entrepreneurial foreign nationals to look elsewhere. This opens the door for other countries to recruit them.


Many of these individuals seeking to form companies with investor money are students who have graduated from U.S. universities either with bachelor or master level degrees. The primary visa for them is the H-1B visa category, but H-1B availability has been restricted in many ways in the past several years. First, there are only a limited number of H-1B visas allotted each year, and when the economy is doing well, the demand for H-1B visas is reached in five days or less, which happened this year. In addition, the H-1B visa has been restricted by the United States Citizenship and Immigration Services (USCIS) through a memo that owners cannot generally qualify for this visa category anymore as the employer / employee relationship doesn’t exist. And this memo, while written for H-1B visas, has also been applied to L-1 visas.


In addition, the USCIS has a bias against small companies and issues requests for evidence and denials at a much higher rate for start-up companies or small companies in both the H-1B and L-1 visa categories. This trend in adjudications makes it very difficult, if at all possible, to use them for start-up companies.


Therefore, in accordance with the invisible fence that I believe the USCIS is building through policy memos and adjudications, it has become more difficult for start-up companies to use the existing visas categories. As a result, the foreign talent in the U.S. is being sought after by other countries. If they leave the U.S., their investments, companies, and entrepreneurial spirit leave with them.


Posted by: Linda Rahal