Startup Visa Act Opportunities For Entrepreneurs
Despite the overall US economy still being in a recovery phase, it is spring in Silicon Valley and the buzz seems to be back. Companies such as Facebook, Twitter and thousands of startups have led to a hiring boom in the Valley and skilled workers are in demand. One of the key issues is that talented entrepreneurs are not able to obtain visas. Industry leaders such as Bill Gates, Fred Wilson of Union Square Ventures and Brad Feld of Foundry Ventures have been supporting a visa for entrepreneurs. John Doerr of Kleiner Perkins said that he was in favor of "stapling a green card to the diploma of an any foreign science or engineering graduate of a US university".
As a result of industry lobbying, Senators John Kerry and Richard Lugar, reintroduced the Startup Visa Act of 2011 (the "Act") last month with the intent to create more jobs and to increase US global competitiveness. This new legislation proposes to grant a two year visa, called the EB-6 visa, to eligible immigrants (i.e., foreign students in US universities and workers on H-1B visas and entrepreneurs living outside the US) for starting new entrepreneurial ventures in the US.
US Startup Visa
This Act would amend the immigration laws in the US by allowing visas to the following groups of immigrant entrepreneurs upon fulfillment of certain conditions: 1.Immigrant entrepreneurs living outside the US - if a qualified US 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.Workers on an H-1B visa, or graduates from U.S. universities in science, technology, engineering, mathematics, or computer science - if they have an annual income of at least $30,000 or assets of at least $60,000 and have had a US investor commit investment of at least $20,000 in their venture. 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 US â€“ if they have a 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 US. Two years later, the startup must have created three new American jobs and either have raised over $100,000 in financing or be generating more than $100,000 in yearly revenue. All three of the above categories open doors for Indian entrepreneurs including those with ideas for new entrepreneurial ventures or existing ventures with US revenues and not already in the US and those already in the US on H-1B or student visas. The US is still the largest angel and venture capital market with the deepest pool of capital. Many products and technologies receive a better reception in the US because the US is an early adapter market for technology. This would be appealing to Indian entrepreneurs and provide opportunities for such entrepreneurs to explore global markets.
UK Startup Visa
The UK has also been making efforts to attract entrepreneurs. The UK Home Office introduced the new Tier 1 visa category which will be effective in April 2011. Tier 1 visa shall be granted to the following groups of people upon fulfillment of certain conditions:
1. Entrepreneurs â€“ Within three years, they must have created 10 jobs or have a turnover of £ 5 million. Further, standard investment threshold is £200,000 with an exception to "high potential" business with £50,000 in funding from a reputable organization.
2. Investors â€“ who invest £5 million will be allowed to settle after 3 years, and those who invest £10 million or more will be allowed to settle after 2 years.
3. Exceptional Talent (those who have already been recognized or have the potential to be recognized as leaders in the fields of science, arts and humanities) â€“ This will be limited to 1000 visas per year. The UK startup visa appears to be quite different from the US because aside from the "Exceptional Talent" category, the financial bar in the UK is much higher.
India is also developing a vibrant entrepreneurial ecosystem attracting talent from all over the world. While NRIs and Persons of Indian Origin/Oversees Citizen of India can apply for OCI cards which provide the right to work in India, persons not of Indian origin face some additional hurdles.
Currently, such entrepreneurs must apply for an Employment Visa from the Indian consulate in their home country. Pursuant to the September 2010 guidelines issued by the Ministry of Home Affairs, employment visas are granted to foreign workers engaging only in high profiled and advanced skilled jobs and drawing an annual salary of not less than USD$25,000. Exceptions are made for ethnic cooks, language teachers (other than English teachers), translators and members of Foreign High Commissions and Embassies. While there is a policy reason to give priority to Indian professionals, it may be time for India to also consider a start up visa and encourage the entrepreneurial ecosystem in India by attracting global talent.