What is a Startup Visa?
A startup visa can involve a variety of different characteristics. Simply put, it is a visa specifically for foreign entrepreneurs possessing the resources and capital to immigrate to a country and start a new business. The visa creates a new pathway – separate from employment-sponsored visas – for countries to attract high-skilled foreign talent, encourage business growth and create jobs for native-born citizens.
While countries like Canada, Australia and the U.K. have experienced success with startup visa programs, the U.S. has yet to establish a specific pathway for foreign entrepreneurs to start businesses here.
To remain a top destination for foreign talent, the U.S. should consider adopting a startup visa.
The Success of Startup Visas Abroad
The countries that have already introduced startup visas provide a strong framework for the U.S. to mirror.
Canada launched its startup visa a decade ago as a five-year pilot program, but it later transitioned into a permanent staple of the country’s immigration strategy. The program is designed to target foreign entrepreneurs with the skills and potential to start innovative businesses that can create jobs for Canadians and compete on a global scale.
To qualify for the Canadian startup visa, foreign entrepreneurs must meet four basic criteria:
- Possess a Letter of Support from a IRCC designated organization – such as IRCC angel investor groups, venture capital funds or business incubators – that has been approved to invest in or support the startup;
- Possess a qualifying business, meaning the intended startup must be incorporated and carrying on business in Canada, and the applicant must own at least at least 10 percent of the voting rights (applicant and the designated organization must jointly hold more than 50 percent) in the corporation;
- Possess the ability to communicate and work in English, French or both languages; and
- Show proof of enough personal capital to settle in Canada.
Foreign entrepreneurs who are eligible for the Canadian startup visa are also eligible to include their family members for permanent residence. This category allows the entrepreneurs to put the necessary time and resources into scaling a startup in Canada and turn their businesses into a thriving company that creates new jobs and contributes to Canada’s global competitiveness.
Although the program is relatively new, the Canadian government anticipates granting up to 1,250 startup visas by 2023.
Australia’s Business Innovation and Investment (Provisional) visa mirrors many of the aspects of Canada’s startup visa. It requires that foreign entrepreneurs seeking the visa are competent in English, present a valid business plan and possess agreements to receive investments totaling at least AUD 200,000.
However, before qualifying to apply for the visa in Australia, foreign entrepreneurs must first apply to be nominated by the government of a State or Territory within Australia. This strategy allows localities within Australia to select the foreign entrepreneurs with startups in industries that best address the economic needs of the region.
The U.K. is one of the latest countries to introduce a new startup visa, and its program largely follows the blueprints of its Canadian and Australian counterparts. Other countries with specific visas for startups include Chile, New Zealand and the Netherlands, among others.
Introducing a Startup Visa in the U.S.
For decades, the principal stream of foreign talent entering the U.S. have come on the employer-based H-1B visa. The U.S. does offer options like the E-2 Treaty Investors visa and the EB-5 visa for foreign individuals who make large investments in U.S. businesses. While both programs certainly benefit the U.S., they are nonetheless limited by numerical caps and monetary thresholds. There remains abundant and untapped foreign talent across the globe, but foreign entrepreneurs seeking to start a business in the U.S. are left without a viable path to do so.
That said, Congress did take steps in 2022 to pass legislation that would introduce a startup visa program here in the U.S. The proposed program closely mirrors the Canadian and Australian startup visas. However, this is not the first time Congress has considered a startup visa program. The StartUp Visa Act of 2011 gained momentum and widespread support in Congress before eventually failing to pass into law.
Recently, the Biden administration revived the Obama-era International Entrepreneur Parole (IEP) program, which is designed to help foreign entrepreneurs operate startups in the U.S. The New American Economy (NAE) estimated in a 2017 study that the IEP would create at least 200,000 jobs in the U.S. across all sectors over the course of a ten-year period. However, the IEP's success is subject to the uncertain political nature of the executive branch.
A specific startup visa program is needed to truly capitalize on the economic benefits foreign entrepreneurs can contribute to the U.S.
Foreign entrepreneurs have a proven track record of creating innovative businesses in the U.S. that create jobs for native-born citizens. A 2018 analysis from the National Foundation for American Policy (NFAP) found that more than half of the billion-dollar startups in the U.S. had at least one immigrant founder. These startups employ thousands of native-born citizens, and contribute greatly to the overall competitiveness of the U.S.
The U.S. has the blueprint to introduce a startup visa program. Doing so can have lasting net benefits for the U.S., including innovation and job growth for native-born citizens.
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Envoy is pleased to provide you this information, which was prepared in collaboration with Jim Yang, Global Immigration Manager at Envoy Global.
Content in this publication is for informational purposes only and not intended as legal advice, nor should it be relied on as such. For additional information on the issues discussed, consult an attorney at one of the two U.S. Law Firms working with the Envoy Platform or another qualified professional. On non-U.S. immigration issues, consult an Envoy global immigration service provider or another qualified representative.