Immigrant Entrepreneurship Stalled for First Time in Decades

October 19th, 2012

For almost two decades, immigrant-founded start-up companies — especially high-tech firms in Silicon Valley — have represented slightly more than a quarter of all such entrepreneurships in the United States and have been an important source of economic growth in our country.  However,  a new study from the Kauffman Foundation reports that immigrant-founded companies nationwide have slipped for the first time in decades, and its authors believe that the United States’ unwelcoming immigration system has created a “reverse brain drain.”

The report, The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent, evaluated the rate of immigrant entrepreneurship from 2006 to 2012 and updated findings from the period between 1995 and 2005. Immigrant founders, who are most likely to start companies in the innovation/manufacturing-related services (45 percent) and software (22 percent) industries, employed about 560,000 workers and generated an estimated $63 billion in sales from 2006 to 2012, underscoring the continuing importance of high-skilled immigrants to U.S. The report provides detailed statistical data on immigrant start-ups by region, nationality, and sector.

While the downward trend is still slight nationwide, the report confirms that the U.S. must embrace immigrant entrepreneurs to maintain a dynamic economy:

“The U.S. risks losing a key growth engine just when the economy needs job creators more than ever.” Yet, “[t]he U.S. can reverse these trends with changes in policies and opportunities, if it acts swiftly. It is imperative that we create a startup visa for these entrepreneurs and expand the number of green cards for skilled foreigners to work in these startups. Many immigrants would gladly remain in the United States to start and grow companies that will lead to jobs.”

We couldn’t agree more.


Comment » | Immigration Policy Center, Immigration reform

Highly Skilled Immigrants Can Help Boost the American Economy

October 4th, 2012

The United States of America is a nation built on the skill and ingenuity of people from all over the globe, but its current immigration policy no longer reflects that history. Under current policies, 20,000 American-educated immigrants are forced out of the country every year, which is a massive loss of potential talent. By creating a complex business immigration law system, and thus making it difficult for skilled immigrants to obtain the proper paperwork to work in the United States, our already struggling economy is taking an extra, unnecessary hit.

Loss of Talent, Loss of Jobs

According to the Partnership for a New American Economy, 40 percent of current Fortune 500 companies in the United States were founded by either immigrants or their children. In addition, the same report discovered that those immigrant-founded companies generated more revenue than the GDPs of every country outside of the United States, save China and Japan. These immigrants and their children seem to be more willing to take risks, and those risks have clearly paid off.

Between 1995 and 2005, half of the startups in Silicon Valley were founded by immigrants. And in 2005, American companies that had been founded by immigrants provided over 400,000 jobs in the engineering and technology industries and did $52 billion in sales. But unfortunately, 20,000 American-educated immigrants are forced to leave the country every year by the country’s current caps on immigration—that’s a lot of lost opportunity.

A Potential Solution

The Jumpstart Our Business Startups Act (JOBS), which President Obama signed into law in April of this year, is aimed at making it easier for startups to succeed by legalizing crowdfunding and encouraging small companies to consider an initial public offering. This is a step in the right direction, but the JOBS Act ignores the immigrant demographic.

The Startup Act 2.0, which has bipartisan support, was introduced earlier this year to address that issue. The act is aimed at reforming America’s visa system—it would eliminate the per-country cap for employment-based immigrant visas; put immigrants with a master’s or Ph.D in science, technology, engineering, or math in line for green cards; and allow immigrant entrepreneurs who employ American citizens to be granted visas. While these are all good ideas, the bill could still use some work before Congress considers passing it. For example, giving green cards to those with high-level STEM degrees is a valid proposition, but it ignores entrepreneurial immigrants who earned degrees in non-STEM areas. Under this act, the founders of PayPal, YouTube, and Skype would all have been denied.

In any case, the Startup Act 2.0 is definitely a huge step in the right direction toward taking advantage of the nation’s valuable highly skilled immigrants. However, the current system remains incredibly complicated, making it difficult for businesses to hire immigrant workers. For more information or guidance concerning business immigration law, contact Zulkie Partners LLC, one of America’s top business immigration law firms.

Comment » | Immigration reform

Business Immigration and the Political Climate

August 28th, 2012

In the midst of nationwide turmoil over the issue of immigration in America, several things have been overlooked. While most of the fight arises over illegal entry into the country, there are many citizens who are completely opposed to any kind of immigration. This is where the oft-discounted practice of corporate immigration becomes a larger part of the issue. On top of this, the international legal marketplace has been dealt a sharp blow by recent anti-immigration legislation on the federal government’s part.

Federal Moves

Policymakers have developed a habit of lumping business immigrants in with immigrants who undertake the move for socioeconomic advancement. The distinction lies in the fact that business or corporate immigration is brought about by firms and companies on American soil. They recruit workers from overseas, based on their skills and talents, and bring them into the country by legal avenues (i.e. work visas) on temporary or permanent bases.

The shift in attitude toward immigration, which was always strained but has deteriorated over the last few years, started with the recession and has not been able to take recovery steps since. In an attempt to improve the economic situation, officials from the agencies for U.S. Citizen and Immigration Services and the U.S. Department of Labor have implemented inspections of American businesses in targeted industries that have high rates of non-immigrants working in them.

The goal of conducting these audits is, on the surface at least, to make sure that every firm observes the correct eligibility screening procedures and pay rates. While many companies have certainly cut back on foreign recruitment and reduced the number of foreign born hires coming into the country in the wake of the global financial downturn, the government has taken its methods to a higher level with much stricter checks for background and eligibility and generally higher criteria, making it increasingly difficult for companies (and the business immigration law firms that assist them) to hire workers from outside of the country.

Presidential Election

The current campaign for the White House has already become a battleground over immigration policy, one of this election’s biggest hot-button issues. Evidence of this lies in President Obama’s recent muscle-flexing in the arena, which has drawn diverse reactions across the board. While the Democratic Party has traditionally been more lenient on immigration matters, the Obama administration has developed some fairly intense measures to hinder and deport undocumented immigrants.

Whether Obama wins and serves another term in office or Mitt Romney prevails, the U.S. is sure to see some interesting changes pertaining to the issue. With the enforcement of the Secure Communities directive expected to be nationally implemented in 2013, it is clear that developments in the laws pertaining to immigration are imminent. Whether these upcoming measures are firmer or more permissive, they will undoubtedly have an effect on business immigration practices in law firms as well as in the businesses sector.

For education, guidance, and legal assistance with any issues concerning business or corporate immigration, consult Zulkie Partners.

Comment » | Immigration reform

Nonimmigrant Visa Interview Waiver Program Expands in Mexico

August 28th, 2012

In July, US embassies in Mexico expanded the Department of States program to waive the nonimmigrant visa interview requirement to allow persons to obtain a new visa without scheduling a consular interview if they are applying for same visa within 48 months of their prior visa’s expiration date.  Previously, the visa interview waiver was only available to persons whose valid visas had expired within 12 months of the date of reapplication. The visa interview waiver program was initiated in January on an embassy-by-embassy basis to facilitate international travel to the U.S. by frequent business travelers and tourists. Currently, the program is in effect in only a limited number of countries.

Comment » | Department of State

Why Do Visa Numbers Surge Forward and Then Retrogress? Predicting Visa Availability for Backlogged Categories?

August 28th, 2012

Predicting when a priority date will become current and when the wait on the long immigrant visa queue will finally be over can often be pure guess work. With visas suddenly unavailable or unexpectedly within reach, preference-visa applicants and their attorneys have learned to accept this phenomenon as just another part of the immigration system. In a recent interview with the head of the Visa Control and Reporting Division at the State Department’s Visa Office – the office charged with establishing the monthly priority dates for the Visa Bulletin – Charles Oppenheim sheds some light on the process and provides his predictions for the months to come.

In October 2012, when new visas are allocated for fiscal year 2013, the employment-based second category (EB-2) worldwide will become current but, Mr. Oppenheim warns, the EB-2 category may retrogress or become unavailable for the rest of the year if USCIS adjudicates a significant number of cases in the summer. EB-2 cut-off dates for China (Mainland born) and India, currently “unavailable,” will only move to August or September 2007 and are not likely to move forward for at least six months due to pent-up demand.  Many of these individuals were just two years away from obtaining their green cards in April 2012 when the priority date was May 1, 2010. Now, these foreign nationals can expect at least a five-year wait. Why did this happen?  Why do priority dates move so far ahead and then retrogress so drastically?

Apparently, USCIS had approved many I-140 employment-based immigrant visa petitions but had not received a corresponding number of I-485 adjustment of status applications to adjudicate and thus urged DOS to move these priority dates forward.  Moreover, USCIS expected that adjudication of EB-1 cases would be at the same rate as last fiscal year, and not more. All of these factors led to the forward movement of the EB-2 priority date. The dates then severely retrogressed when demand caught up with visa availability. Another factor for seesawing EB-2 priority dates was the increase in EB-5 investor immigrant visa cases. Unused EB-5 visas trickle down into the EB-1 category, and unused EB-1 visas fall into EB-2. This year, there was less of the normal trickle-down between categories.

Another issue that clouds prediction of visa demand and visa availability, as explained by Mr. Oppenheim, is that neither USCIS nor DOS maintains statistics on upgrades from the EB-3 category to the EB-2 preference category. This can occur, for example, when an applicant applies for an EB-3 visa petition but then advances in his or her career or changes jobs and becomes eligible for an EB-2 visa or marries an EB-2 applicant. In these instances, the individual then has two visa numbers allocated to him. The unused or duplicate visa number (EB-3) is only cancelled when the visa applicant uses the EB-2 visa number during green card issuance. According to Mr. Oppenheim, there are between 10,000 and 15,000 duplicate visas numbers as a result of “upgrades” each fiscal year – a wide variance.  For 2013, that number is already at 17,000, which underscores the difficulty in predicting upgrades and thus visa availability.

Retrogressions are not good for anyone and neither agency likes them.  For USCIS, it means it has to adjudicate more work authorization and travel documents without a fee, and for DOS, it means lack of predictability. For individuals, it means further uncertainty and futures delayed.

Comment » | Department of State, I-485, Lawful permanent resident

Back to top