Subscribe to Entrepreneur for $5

Immigration Reform Proposals Hold Promise for Entrepreneurs


President Barack Obama delivered a call-to-action speech on overhauling the U.S. immigration policy from Las Vegas, Nev., Tuesday. In his blueprint for immigration reform, Obama emphasized several changes to the immigration law that would directly impact entrepreneurs.

Entrepreneurship MIT

In particular, Obama called for the creation of a "Startup Visa" for entrepreneurs that create jobs. Those foreign-born entrepreneurs that either secure financing from a U.S. investor or generate revenue from U.S. customers would be eligible for visas, with the potential for those temporary stays turning into permanent residences if their companies continued to grow and create jobs in the U.S.

Also, the President called for green cards to be "stapled" to diplomas of advanced science, technology, engineering and math (STEM) degrees for foreign-born graduates of Ph.D. or master's degree programs. Finally, the President called for businesses to slowly phase in the use of electronic verification of employees and a crackdown on those employees who hire undocumented workers. Obama's blueprint includes exemptions to the system for "certain small businesses."

One big issue drawing attention in entrepreneur circles, but which was only indirectly addressed by the President Tuesday, is the interest in streamlining the burdensome process of applying for H-2B visas, those temporary visas that allow immigrant laborers to come into the U.S. for seasonal jobs. The White House's blueprint calls for "cutting red tape for employers" by eliminating caps on the number of immigrants that can be brought in from specific countries and by adding additional visas to the system.

Related: Steve Case on Fixing the Visa System (Opinion)

The president's speech comes on the heels of the release Monday of a legislative framework for comprehensive immigration reform from a bipartisan group of Senators. Like the President's blueprint, the Senators supported awarding green cards to immigrants who have received advanced STEM degrees. In addition, the bipartisan Senate framework called for cracking down on employers who knowingly hire undocumented workers by hitting business owners with "stiff fines and criminal penalties." Also relevant to entrepreneurs, the Senate framework called for making it less burdensome to hire immigrant labor when U.S. workers are either unavailable or unwilling to do the work.

While the Senate's blueprint and the President's speech are signs that reform is moving closer to top of the Congressional agenda, a group of Republican Senators lead by Marco Rubio (R., Fla.) may put out their own proposal for immigration reform. And later this week, another group of Senators is expected to propose a separate bill, called the Immigration Innovation Act, specifically focused on increasing the number of visas available to highly-skilled immigrants, according to news reports.

Regardless of what the Senate finally passes, the Republican-controlled House is expected to be resistant. While policy watchers are encouraged by the momentum behind the immigration conversation, they also expect something of a fight on Capitol Hill before comprehensive reform finally hits the President's desk.

While there is likely to be an intense battle over how an undocumented immigrant currently in the U.S. should or should not be allowed to gain access to citizenship, there is nearly universal support on both sides of the aisle for the immigration issues relating to entrepreneurship and small-business owners. However, there is little expectation that these measures would be pushed through as independent bills. The President "absolutely" believes any changes to the immigration system need to be part of a broad overhaul, said White House Press Secretary Jay Carney. Obama is expected to press for immigration reform again in his State of the Union Address Feb. 12.

Related: Are Immigrant Business Owners Driving U.S. Growth? (Infographic)

These issues have come to the forefront in the debate over how to revive the U.S. economy and renew its global competitive edge. A 2012 report from Partnership for the New American Economy shows that in 2011 three of four patents awarded to the top 10 most innovative universities in the U.S. went to teams with at least one foreign-born inventor. More than half (54 percent) of those teams had someone likely to struggle with visa issues, including students, postdoctoral fellows and staff researchers. "Continuing to train the world's top innovators and then sending them abroad to compete against us is a self-defeating strategy," the report says.

Ahead of legislative action, the White House sought to help immigrant entrepreneurs better navigate their various visa options by launching an online resource called Entrepreneur Pathways at the end of November.

The AOL co-founder Steve Case, a vocal advocate of the Startup Visa Act, says he is optimistic about the prospects for reform this year. "When the push for comprehensive reform begins in the next few weeks, high-skilled visa reform has to be part of the package if the U.S. is going to compete, and succeed, in the 21st century," Case wrote in an email. Case has been leading the Startup America Partnership, a private-sector alliance with the White House, the Case Foundation and the Ewing Marion Kauffman Foundation, to foster innovative, high-growth firms.

Related: Expand the Startup Visa Act (Opinion)

Eleanor Pelta, immediate past president of the American Immigration Lawyers Association, shares Case's optimism. "Good people on both sides of the aisle are really beginning to talk about the need for overhauling the immigration system this year," she said. "We do have a lot of work to do -- on gun control and so forth -- but I do think immigration reform is going to become a priority."

Here's a breakdown some of the key measures of interest to entrepreneurs and small-business owners.

Startup Visa Act: This amendment to U.S. immigration law most recently proposed in 2011 would allow an immigrant entrepreneur to receive a two-year visa if he or she can show that a qualified U.S. investor is willing to invest in the immigrant's startup venture with the potential for permanent residency if certain business conditions are met. It's currently difficult for foreign-born entrepreneurs to stay in the U.S. legally, says Pelta. For example, the H-1B visa, which is the most common professional visa, requires an employer. In some instances, if an entrepreneur is operating under the tutelage of a corporate board or with the structure of venture funders, an H-1B visa is a possibility, says Pelta.

Without a legal way to stay, despite the attractions of the U.S., entrepreneurs opt to start their businesses elsewhere. Other countries have begun wooing entrepreneurs from around the globe to start up within their borders. Canada recently ran a campaign to attract investors, innovators and entrepreneurs. Its message, says Pelta, amounted to: "Why bother trying to get into the U.S. when you can come in here much more easily." Likewise, Chile has offered entrepreneurs housing and seed money.

STEM Jobs Act: The House of Representatives passed a bill at the end of 2012 called the STEM Jobs Act which would provide visas to American-educated, foreign-born STEM graduates. These math-and-science grads, generally in short supply, are the kind of talent that high-tech companies are in need of most. Despite their desirability for the U.S. ecosystem of innovation technology, foreign-born STEM grads often have a hard time staying once they have graduated. The number of H-1B visas for workers in specialty occupations such as engineers and scientists has been limited. The Democratically-controlled Senate and the Obama administration blocked the House bill to hold out for comprehensive immigration reform.

Another bill has been introduced in the House which would provide green cards to foreign graduates of advanced STEM degrees, either master's or Ph.D. programs.

A streamlined process for seasonal worker hiring: Small-business owners, such as hotels and lawn-care companies relying on seasonal workers, often struggle with the regulatory paperwork involved with bringing these temporary workers into the U.S. Reforming the H-2B visa process would reduce headaches for business owners hiring immigrant laborers to come into the U.S. temporarily for seasonal jobs.

Entrepreneur Editors' Picks