Entrepreneurs Excited About Proposed Changes to EB5 Visa
Introduction:
Entrepreneurs around the world are having a hard time finding any applicable visa categories that would allow the entrepreneurs to stay and start their businesses. The perfect solution would be a EB-5 visa, which permits foreign nationals who invest at least $1 million into a U.S. start up or existing business and create 10 jobs, or which invest $500,000 in capital investment and create five jobs in economically disadvantaged areas, to obtain permanent resident status, commonly known as a green card.
Lowering EB-5 Investment Threshold to USD250,000:
Last December, Rep. Jared Polis (D-Colo.), introduced the Employment Benefit Act (H.R. 4259), which included reform of the EB-5. In February, Sens. John Kerry (D-Mass.) and Richard G. Lugar (R-Ind.) introduced the Startup Visa Act of 2010 (S. 3029), which focuses solely on EB-5 reform, reallocating a portion of the 10,000 visas allowed annually under the EB-5 category and creating a new EB-6 category for immigrant entrepreneurs. The bills also amend current immigration law, lowering the investment threshold to $250,000 in equity funding from qualified super-angel investors or venture capital firms.
Requirement of Super-angel Investors:
Qualified super-angel investors need to meet certain Securities and Exchange Commission criteria to be an accredited investor. In addition, the angel investor has to be a U.S. citizen and have made at least two equity investments in the past three years of not less than $50,000 each. Qualified venture capitalists must be U.S.-based VC firms in business for at least two years, and whose partners are primarily U.S. citizens. The firm must have made at least two investments of not less than $500,000 within the past two years. At the end of two years, those immigrant entrepreneurs who employ at least five full-time employees or who have either raised $1 million in new capital or earned $1 million in revenue will be given green cards.
More opportunities for Entrepreneurs In a Wider Range of Fields:
The proposed changes would make it possible for entrepreneurs in a wider range of fields to start business under this provision and qualify for citizenship. Traditionally the EB-5 has benefited entrepreneurs starting retail, hospitality, and commercial construction enterprises. Sectors like technology typically run lean and don’t employ 10 or more employees in the start-up phase.
Since the newly proposed bill is still at an early stage. It is unclear what the specific requirement for job creation could be. When asked for projections, John Kerry (D-Mass.)’s spokesperson, Whitney Smith responded in an e-mail: We don’t have specific jobs numbers. Most who tout this bill emphasize the job-creation aspect rather than the political hot potato of immigration reform. People still want to be in the U.S., Field, managing director of Boulder, Colo.-based venture capital firm says. They still want to start their companies here, and they still want to be involved in entrepreneurial communities here. They still want to build lives here. And we should make that easy.”
-Yi Song-
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