On November 20, 2014, President Obama announced his planned executive actions on immigration. The big focus was on the relief for undocumented immigrants who are parents of U.S. citizens. If they meet certain requirements, they can get employment authorization under the DACA program. The less discussed is the business side of immigration, especially the executive actions that will affect the startup community.
In President Obama’s Thursday announcement, he said, “Second, I will make it easier and faster for high-skilled immigrants, graduates, and entrepreneurs to stay and contribute to our economy, as so many business leaders have proposed.” However, this was all he said about this 2nd action in his whole speech. The memorandum released by the Department of Homeland Security gives a little more detail. The memorandum with the subject of “Policies Supporting U.S. High-Skilled Businesses and Workers” lists 5 policy changes, 3 of which have important effect on entrepreneurs who want to start a company.
1. Modernizing the Employment-Based Immigration Visa Systems
USCIS will work with the Department of State to ensure that all authorized immigrant visa will be issued, and to improve the system for determining when immigrant visas are available to applicants during the fiscal year. Currently, the guidance for immigrant visa number availability is put on the Visa Bulletin which is published and updated by the Department of State every month. Green card applicants look at the charts on the Visa Bulletin to see whether their priority date has become current so that they can apply for either adjustment of status in the U.S. or an immigrant visa at their home country. However, there were many instances in the past where the estimates for visa number availability was wrong, and therefore causing someone who expected his/her priority date to become current in a month to wait for another few years. This could cause severe damages to the applicant if he/she decides not to extend the current nonimmigrant visa because of the expectation that his/her priority date will become current soon. Therefore, the current practice of immigration lawyers has been to file the probably-unnecessary-extension of nonimmigrant visa just in case the estimates on the Visa Bulletin is wrong.
With this new policy of modernizing the system, the hope is that there will be little, if any, mistakes on the estimation of visa number availability, so that applicants do not need to spend unnecessary money, time and energy. This will enable all green card applicants, including entrepreneurs to make better decisions not only on whether or not to extend the current nonimmigrant visa, but also on how to plan and execute the business strategies, and on the whereabouts of the spouse and children.
2. Expanding Optional Practical Training (OPT) program
The OPT program will be further extended for students and graduates in science, technology, engineering, and mathematics (STEM) fields. Currently, all foreign students graduating or are expected to graduate from certain degree programs are given one year work authorization under the OPT program. STEM graduates are eligible for an additional 17 months extension. The new policy will give further extension to STEM students and graduates. However, the length of the additional extension is not announced yet.
Depending on the length of the additional extension, this could be a very helpful policy change for the startup community, because more people can start a business and bring it up to a level that leads to the next visa status or even green card. An under-emphasized fact is that people can be self-employed during OPT and start their own business in the U.S. The challenge has been, though, that OPT last only for one year, or two and half years under STEM, and that is not enough time to make the business successful enough to qualify one for a different type of visa after the OPT expires. If one started OPT by working with an employer, the remaining time is even less. The fear of having to give up on one’s own business after OPT expires significantly discourages entrepreneurs to start their own business. Therefore, if OPT can be extended for 2 or 3 more years, entrepreneurs will have better chance succeeding on their business, and thus higher motivation to start a company. The frustrating thing though, is that the new policy only applies to STEM students and graduates, even though the people with non-STEM degrees can equally be innovative and bring business to the U.S. Probably the most frustrated people are the co-founders of a technology company, having a non-STEM degree and contributing to the business side of the company, but are under the threat of having to leave the country or the company after one year.
3. Expanding National Interest Waiver (NIW) petitions
First, USCIS will issue guidance to clarify the standard for NIW petitions “with the aim of promoting its greater use for the benefit of the U.S. economy.” NIW is a self-petitioned green card application under the EB-2 category. In order to qualify for NIW, one must show, among other things, that one will serve the national interest of the U.S. to a substantially greater extent than the majority of one’s colleagues and that one has a degree of influence on one’s field that distinguishes one from one’s colleagues. If one has a company and is creating jobs in the U.S., one needs to show that the creation of jobs domestically for U.S. workers may serve the national interest to a substantially greater degree than the work of others in the same field. NIW is of a great interest to entrepreneurs because it does not need a sponsoring employer, and the lengthy and costly Labor Certification process is waived. However, the difficulty comes from the lack of clear guidance on the standard, i.e. how much greater is “substantially greater.” Therefore, clarification on the standard will definitely help petitioners preparing for a more successful petition. And supposedly the standard will not be too high to “promote its greater use for the benefit of the U.S. economy.”
For people born in mainland China or India, however, this new policy will not grant immediate relief, since there is still 5 to 10 years of long wait before they can get a green card, because NIW falls under EB-2 category. The 2nd proposed policy change, on the other hand, will be a great benefit for everyone, including people born in mainland China or India.
Second, USCIS will create a parole status to inventors, researchers, and founders of start-up enterprises who may not yet qualify for NIW, but who have been awarded substantial US investor financing or otherwise hold the promise of innovation and job creation through the development of new technologies or the pursuit of cutting-edge research. Although the details of this parole status has not been announced yet, the memorandum does say that there will be income and resource requirements. Moreover, since it is a parole status and not a green card, it can be expected to have a validity of a limited number of years with work authorization, and probably travel authorization.
Under this new policy, entrepreneurs who can’t quite yet show that they are “substantially greater” than their peers, but have secured fundings or have attracted investors will be able to stay in the U.S. and keep developing their business. And hopefully, their business will be successful enough to qualify the founders to a different type of visa or green card before their parole status expires.
The executive actions mentioned above are seen as the alternative to the StartUp Visa Act of 2013 which has not been signed into law. The details of these actions still remain unclear. However, it can be expected to create important relief for many entrepreneurs. In particular, it will be a big relief for entrepreneurs who are current or former international students of a STEM major. If you are in STEM major and will be OPT, or are already on OPT, you can expect a longer period of time for you to develop your business, so that by the time your OPT expires, you can apply for the pre-NIW parole status. This is not the only way to remain in the US with your company, but this will be the easiest way, until Congress passes a more comprehensive StartUp Visa Act.