New Guidance For Immigrant Entrepreneurs And Immigrant Founded Startups Seeking H-1B Visas And EB-2 Based Greencards

Secretary of Homeland Security Janet Napolitano and U.S. Citizenship and Immigration Service (USCIS) Director Alejandro Mayorkas announced new “clarifications” that seek to highlight visa options for entrepreneurs and startup companies who own some or all of the petitioning company, or have no job offer or sponsoring employer at all.

First, they noted a path to applying for an H-1B nonimmigrant visa for entrepreneurs who own all or part of their company. The Agency updated its guidance on establishing “Employer-Employee Relationship” in H-1B petitions to account for a company petitioner that is owned by the shareholder beneficiary but controlled by its Board of Directors.  The USCIS has set forth a scenario whereby a founder petitioner could sponsor his or her own H-1B application. Specifically, the agency states:

USCIS indicates that while a corporation may be a separate legal entity from its stockholders or sole owner, it may be difficult for that corporation to establish the requisite employer-employee relationship for purposes of an H-1B petition.  However, if the facts show that there is a right to control by the petitioner over the employment of the beneficiary, then a valid employer-employee relationship may be established. For example, if the petitioner provides evidence that there is a separate Board of Directors which has the ability to hire, fire, pay, supervise or otherwise control the beneficiary, the petitioner may be able to establish an employer-employee relationship with the beneficiary.

While this is a welcome development, the USCIS’ emphasis on divorcing control from ownership is a major obstacle for actual entrepreneurs, who by definition want to ‘be their own boss’. It is a small step in the right direction, but real legislative change is needed to account for the majority of immigrant entrepreneurs and immigrant founded start-ups in which ownership and control are inseparable.

In addition to addressing H-1Bs for start-ups, USCIS has issued new guidance regarding entrepreneurs seeking an EB-2 immigrant visa. The EB-2 immigrant visa is for members of the professions holding advanced degrees or their equivalent and/or individuals who because of their exceptional ability in the sciences, arts, or business will substantially benefit prospectively the national economy, cultural or educational interests, or welfare of the United States. To obtain an EB-2 immigrant visa, the applicant (i) MUST have a job offer from an U.S. employer and (ii) an approved labor certification from the Department of Labor. Previously, it was necessary for an EB-2 beneficiary to find a U.S.  employer to act as the petitioner.

The new guidance states that entrepreneurs, if they qualify, can obtain a National Interest Waiver which exempts the entrepreneur petitioner from (i) the normal requirement of a job offer from a U.S. employer and (ii) from having to obtain a labor certification from the U.S. Department of Labor. “National Interest” is not defined but the USCIS offers three criteria that must be met to qualify. The criteria are that:

1. The waiver applicant must seek employment in an area that has substantial intrinsic merit.
2. The waiver applicant must demonstrate that the proposed benefit to be provided will be national in scope.
3. The waiver applicant must demonstrate that it would be contrary to the national interest to potentially deprive the prospective employer of the services of the waiver applicant by making available to U.S. workers the position sought by the waiver applicant.

While not a change in the law, the administration’s explicit  emphasis towards  helping  foreign entrepreneurs stay in the United States is long overdue and an exciting development for immigrant entrepreneurs and the start-up community overall. On the other hand, past policies discriminating against small businesses have not been disavowed, so the road to a nonimmigrant visa or legal permanent resident status for entrepreneurs is still fraught with obstacles.

The Startup Visa Act, which offers entrepreneurs multiple options for achieving a greencard is still the best step forward and should be at the top of Congress’ agenda for job creation and economic growth. For the moment these ‘clarifications’ are only a temporary solution.