America Needs an Entrepreneur Visa
February 9, 2021
On his first day behind the Resolute desk, President Joe Biden signaled that immigration reform will be a major priority for the new Administration. Among the 17 executive actions the President signed in the hours after his inauguration were orders halting construction of the southern border wall, ending the travel ban on mostly Muslim and African nations, preserving the Deferred Action for Childhood Arrivals (DACA) program that protects immigrants brought to the United States as children from deportation, and revoking the Trump Administration’s plan to exclude noncitizens from the census count.
But the President made clear that legislation would be needed to complete the Administration’s immigration agenda, which includes a pathway to citizenship for undocumented immigrants.
“There’s a long way to go,” he told reporters present. “These are just executive actions. But we’re going to need legislation for a lot of the things we’re going to do.”
One of those things should be the creation of an entrepreneur visa. In the wake of a pandemic that has closed more than 150,000 businesses and destroyed millions of jobs, accelerating post-Covid economic growth and job creation depends on new business formation – and immigrant entrepreneurs are critical to that objective.
Research shows that immigrants are twice as likely as native-born Americans to start a new business. Though just 14 percent of the population, immigrants account for a quarter of all business owners – and even higher rates among high-tech startups.
To pick up one’s life and move to a different country with a different culture and often a different language – at great personal and financial risk – is a profoundly entrepreneurial act. It shouldn’t be a surprise that such people continue to be highly entrepreneurial once they arrive.
Foreign-born entrepreneurs have been a prominent feature of America’s economic landscape for many decades. Iconic American companies founded or co-founded by immigrants include Dow, AT&T, DuPont, Levi Strauss, Anheuser-Busch, Pfizer, Goldman Sachs, Sun Microsystems, Google, Yahoo, eBay, YouTube, PayPal, Tesla, Facebook, and LinkedIn.
A 2017 study by Ian Hathaway at the Center for American Entrepreneurship found that 43 percent of Fortune 500 companies – and 57 percent of the top 35 companies – were founded by first- or second-generation immigrants. These companies are headquartered in 68 metro areas across 33 states and employ millions of Americans.
Given this reality, it is irrational and self-defeating that the United States is one of only a few industrialized nations that does not have a visa category for foreign-born entrepreneurs. In recent years, many other nations – including China, Canada, Germany, France, New Zealand, Australia and Chile – have overhauled their immigration laws to attract foreign-born entrepreneurs, including American entrepreneurs. Most recently, on June of 2018, the United Kingdom announced the creation of a “startup visa” to attract and retain foreign-born entrepreneurs.
America has been feeling the heat of heightened competition for innovative talent for years now. In 2017 more new technology jobs were created in Toronto than in Silicon Valley, Seattle, and Washington, D.C. combined.
Given this new competitive reality, Congress should create a new visa category – an “entrepreneur visa” – specifically designated for foreign-born entrepreneurs who want to launch new businesses in the United States.
To qualify for an entrepreneur visa, applicants should meet national security requirements and should be required to have raised a certain amount of initial funding from private investors to validate themselves as entrepreneurs and to authenticate their business idea.
Under the terms of the entrepreneur visa, foreign-born entrepreneurs should be admitted on a temporary contingency basis, say for two years.
If by the end of that period an entrepreneur’s business has been successfully launched and has produced jobs for at least two non-family members, the temporary visa should be extended, say, for an additional three years.
If the new business continues to grow and has created jobs for at least five non-family members by the end of the initial five-year period, the foreign-born entrepreneur should be granted permanent residency status – a green card – in order to continue building his or her business and creating American jobs.
A 2013 study by the Kauffman Foundation concluded that an entrepreneur visa would create between 500,000 and 1.6 million new American jobs within 10 years. Other studies have estimated that a new visa category for foreign-born entrepreneurs could create as many as 3 million new American jobs over a decade.
In a post-Covid global economy in which the competition for talent is increasingly fierce, the United States needs an immigration framework consistent with its national identity as a land of opportunity and refuge for the world’s “tired, poor, huddled masses,” but also one that places greater emphasis on attracting and retaining the world’s best and most innovative talent.
Foreign-born entrepreneurs have created many of America’s largest and most successful companies. We want the next generation of great companies launched in America too.