More than 40 percent of U.S-based Fortune 500 companies were founded by immigrants or the children of immigrants, according to a 2011 report from the Partnership for a New American Economy. Yet too often, entrepreneurs are forced to leave the United States before a business can get off the ground—or, worse, they’re forced to leave while they’re running it.
The Obama administration has proposed a new rule that will make it easier for immigrants who are budding entrepreneurs to remain in the country longer.
The Department of Homeland Security’s (DHS) International Entrepreneur Rule, which isn’t subject to congressional approval, proposes to allow individuals, considered on a case-by-case basis, a temporary initial stay of up to two years and potential for a one-time extension of an additional three years, if they meet certain conditions.
The conditions include:
• The individual owns at least 15 percent of a startup and has a central and active role in its operations;
• The startup was formed in the United States within the last three years; and
• The startup has demonstrated potential for rapid growth and job creation, as evidenced by significant funding (at least $345,0000) from qualified investors; received significant awards or grants (of at least $100,000) from specific government entities; partially satisfied one or both of the other two conditions; or has other compelling evidence of its potential for growth and job creation.
“DHS believes that this proposal would encourage foreign entrepreneurs to create and develop startup entities with high growth potential in the United States, which are expected to facilitate research and development in the country, create jobs for U.S. workers, and otherwise benefit the U.S. economy through increased business activity, innovation and dynamism,” stated the DHS.
It added that there are a high number of immigrant entrepreneurs in STEM (science, technology, engineering and math) fields, and that between 2006 and 2012, one-third of the companies financed with venture capital and that made an initial public offering were founded by immigrants. These same companies have generated 66,000 jobs and $17 billion in sales.
Max Levchin, the co-founder of PayPal and other companies, sent an email to the White House email list Aug. 26, writing that, when he arrived in the United States from the USSR when he was 16 years old, he was grateful for the opportunities America provided.
Levchin built what is now a $45 billion company with nearly 17,000 employees, and has invested in more than 100 startups.
“I believe that the most promising entrepreneurs from around the world should have the same opportunity I had—the chance to deliver on their potential, here in America,” he wrote.
In a Medium post, Tom Kalil, the deputy director for Technology and Innovation at the White House Office of Science and Technology Policy (OSTP), and Doug Rand, the assistant director for Entrepreneurship at OSTP, called the proposed rule an “important step in attracting the world’s best and brightest entrepreneurs to start the next generation of great companies and create jobs here in the United States.”
They also noted that the rule will “complement other Administration efforts to attract talented startup founders from around the world.”
In 2011, President Obama tried to pass a proposed amendment to U.S. immigration law called the Startup Visa, which proposed to provide visas for entrepreneurs who had raised significant capital, created jobs and generated a specific amount in sales. Congress refused to pass it.
This January, Cecilia Munoz, assistant to the President and director of the Domestic Policy Council, and Jeffrey Zients, director of the National Economic Council and Assistant to the President for Economic Policy, called fixing the current immigration system an “economic imperative.”
“That’s why the President continues to call on Congress to pass comprehensive bipartisan immigration reform,” they wrote in a Jan. 28 email to the White House list. “The executive actions announced by the President in November 2014,” they added, “could boost the nation’s economic output by up to $250 billion, while shrinking the Federal deficit by $65 billion over the next ten years.”
The public has 45 days following the document’s Aug. 24 posting to comment on the proposed rule. Comments may be submitted via email, the postal service or the Federal eRulemaking Portal.