Last week U.S. Reps. Zoe Lofgren (D-CA-19) and Luis Gutierrez (D-IL-4) introduced the EB-Jobs Act of 2015. The bill is meant to augment the present EB-5 immigrant investor program, providing additional visa opportunities for qualified immigrants who are not currently eligible for visas. This bill would create a ‘startup visa’- a new green card category for entrepreneurs who establish businesses and create jobs. While the ‘startup visa’ is certainly a positive for entrepreneurs, it’s not the first time such legislation has been introduced, highlighting the need, but also difficulty of passing similar legislation.
This new bill is important for two main reasons; it highlights deficiencies in immigration avenues for entrepreneurs, and also recognizes the unique role the startup community plays in economic development and job creation. Currently, entrepreneurs and founders seeking to start a business in the US have limited options. The existing EB-5 program provides green cards to individuals who invest in a new commercial enterprise of between $500,000-$1 million (depending on the particular project area). Alternatively, high skilled individuals can enter the H-1B visa lottery, though as we noted in April it’s woefully oversubscribed. This spring saw 233,000 applicants for 85,000 spots- and only for individuals with a sponsoring employer. Lacking significant personal wealth or an existing employer willing to sponsor a visa, foreign entrepreneurs have no pathway to legal residency.
The EB-Jobs Act would change this landscape, allowing immigrants with a clear business plan and outside venture backing into the US on a green card. As written, the bill would provide residency to individuals who have either secured outside venture capital, are accepted into an accredited accelerator program, or have recently started a company that employs American workers. As Rep. Lofgren noted in announcing the bill, immigrants have created “nearly half of America’s top venture-backed companies and those companies in turn have created an average of 150 jobs each.” Research backs up the impact of immigrants on the startup economy: according to a recent report from the Kauffman Foundation, immigrants are nearly twice as likely to be an entrepreneur compared to native born americans. The EB-5 visa would ensure promising individuals can continue to start their businesses in the US, instead of Canada, Ireland, or a host of other countries currently offering startup visas.
Since 2010, Congress and the White House have put forth similar proposals to address this need, though efforts have perennially stalled - most often due to contention around broader immigration reform. While the bill faces an uphill battle in Washington, it’s important for all parties to recognize its benefits and limitations. As Rep. Gutierrez stated upon its introduction, “this bill is intended to address just one aspect: making the U.S. economy more attractive to job-creators and entrepreneurs.” This bill alone will not address the multitude of immigration issues affecting the economy, though for a small, but important subset of entrepreneurs, the legislation offers a new path to the US. For that reason alone, the EB-Jobs Act is good for the startup ecosystem and the American economy.