Start Up Proposal Struggling To Make It Through Congress

President Biden used his recent State of the Union address to call for the House and Senate to reconcile two economic bills so he can sign the final legislation into law. He had in mind the $ 350 billion House of Representatives COMPETES Act that was passed in February 2022, and the $250 billion U.S. Innovation and Competition Act that was passed in the Senate in June 2021. Of special interest for our purposes, is that the House bill added immigration provisions to the older Senate version. The question is whether the immigration provisions proposed amount to a poison pill that will doom the entire legislative effort, or whether Congress can get the reconciled legislation over the finish line with those provisions in tact.

Creation Of W Visas

Among other things, the House bill would create a new immigrant visa category. The “W” visa would particularly benefit three groups of foreign nationals: W-1s, being entrepreneurs with at least a 10 percent ownership interest in a start-up formed within five years of the date of the visa application; W-2s, being essential employees of a start-up; and W-3s, being visas for their spouses and children.

Like the International Entrepreneur Rule before them, the W visas have eligibility requirements regarding levels of investment from qualified investors and a showing that the principal applicants have knowledge and skills that would substantially assist the start-up. The W work visas would allow an initial validity period of three years with the possibility of 3-year extensions and 1-year extensions if investments and job creation meet certain standards. One important difference from the International Entrepreneur Rule is that the W work visas allow nonimmigrants to have dual intent, meaning that W nonimmigrants would be able to apply for landed permanent residence if the enterprise meets additional investment and job creation levels. Unlike the proposed W nonimmigrant work visas, there is no direct route to landed permanent residence from the International Entrepreneur Rule since it is only a type of parole.

Benefits for STEM Ph.D.s

The COMPETES Act also provides science, technology, engineering or mathematics (STEM) Ph.D. graduates seeking to work in the United States in a field related to such degree (and their immediate family members) a direct path to legal permanent resident status. Foreign nationals with STEM Ph.D. degrees, whether from the United States or foreign equivalent degrees, would be exempted from the annual green card limits. This would allow these Ph.D.s to circumvent the immigrant visa backlog that so many Ph.D.s, especially those from India and China, currently face.

Applications for the W nonimmigrant work visa, the W immigrant visa and the STEM immigrant visa would require the payment of an additional $1,000 supplemental fee that will be used to fund scholarships for U.S. STEM students.

Step In The Right Direction

Commenting on these immigration provisions, Giulia Imperatrice, the COO of WEVE Acceleration, a business accelerator focused on generating international startups in the U.S. said, “The COMPETES Act marks a step in the right direction for the U.S. immigration system, encouraging entrepreneurs from around the world to bring their business to the U.S. and providing them with a specific work permit to do so.” She added, however, “Although promising, the criteria for this new W visa need to be carefully considered to ensure it will accommodate the talent this Act aims to actually recruit.”

A More Critical View

A more critical voice joined the discussion recently. In a recent article in the Norfolk Daily entitled “Torpedo The Traitorous Visa” American conservative political commentator Michelle Malkin asserted Biden wants the bills reconciled, “so he can commence another massive giveaway to foreign and domestic special interests.” She added that the legislation, “will open the floodgates to more foreign tech workers, wealthy foreign investors and foreign students — while our own homegrown American tech workforce, American business owners and American STEM graduates are still reeling from pandemic disruptions and displacements.” Malkin then calculated that, “if the foreigners’ startups are “successful,” the W visa holders could soon join the already overwhelming annual tide of 1 million green card winners who take up jobs in the U.S. and are then eligible for citizenship.” In short, she said the bill will be, “handing out citizenship for sale to the highest bidders.”

As for the STEM provisions, Malkin said there is no American tech worker shortage. To make her point she turns to statistics.

“Here are the facts, straight from the U.S. government: “Among the 50 million employed college graduates ages 25 to 64 in 2019, 37% reported a bachelor’s degree in science or engineering but only 14% worked in a STEM occupation,” according to the U.S. Census Bureau’s 2019 American Community Survey one-year estimates. “This translates into less than a third (28%) of STEM-educated workers actually working in a STEM job.”

Nor is Malkan keen on the other immigration provisions in the proposed legislation. She concludes, “Any American politician who calls himself “America First” and shills for this traitorous monstrosity should be kicked out of office.”

Permanent Residence For Grad Students Needed

Richard Burke, the CEO of Envoy, a company in the field of global workforce management, was more moderate in his comments. He welcomed the initiative to create a U.S. immigrant investor start-up program but expressed doubts that Congress will be able to reconcile the differences between the House and Senate bills. However, he went on to point out that, “75 percent of U.S. graduate students are foreign born and there is a urgent need to provide them a viable and real path to permanent residence so as not to lose America’s investment in them and to help revitalize America’s economy.”

A Big Step Forward View

Other commentators think that if the immigration provisions make it through the process, the United States would take “a big step toward increased competitiveness for foreign talent with other countries that make entry and permanent residence for select individuals much easier.” Indeed, as a Jackson Lewis blog points out, “The United States is a popular destination for start-up founders, but many other countries (including Canada, the United Kingdom, China, Japan, Israel, Germany, Australia, and New Zealand) are competing to entice entrepreneurs to their shores.”

Francis Simowitz, the CEO of WEVE Acceleration, added,”The W-1 visa for entrepreneurs would be a significant step forward towards easing the immigration process for a group of people that have not had a dedicated visa classification, and who create significant economic opportunities in the US. 55% of unicorn startups, meaning they are valued at over $1 billion dollars, we’re founded by immigrant entrepreneurs. Many other countries, like Canada, already have these types of visa programs in place because it creates a competitive advantage to attract talent to the country. The W-1 still has its challenges though, it has a very limited period of time, and the new prioritization of visas doesn’t increase the amount of visas or green cards given in a year.” But she further added that adoption of this legislation would also be significant, since Congress has not passed major immigration reform in decades.

The fate of this initiative will be decided in the weeks ahead. While the parties may disagree on the merits of what is being proposed, everyone seems to agree that much is at stake for America in the outcome.