We are seeing a trend of immigration where rules are being tightened to keep the new arrivals of immigrants more or less constant (in fact it has been fluctuating since 1986) but with no distinctive selection of immigrants and as a result, immigration rules are now so harsh that family based immigration is now taking a bigger part of the cake and it is becoming impossible for smart and skilled people to selectively immigrate to the US.
Welcome to 2010.
Some of the problems
Cap and draw
The main temporary work visa in the US is the H1-B visa (excluding seasonal agricultural workers, top athletes and acrobats -- more on that later) which is limited to 65,000 visas a year (compare that to the annual 1.13 million new legal permanent residents or green card holders in 2009). So how does it work when a visa category reach its cap (quota)? Plain and simple, the USCIS do a lottery between the remaining valid applications. Meaning: you are a skilled engineer, a US company wants to hire you and went through the process of "showing" they cannot find a US citizen with the right combination of skills for the job, and paid more or less $5k in fees to prepare your application. First, you will have to wait until the month of April if the quota has been reached this year (so wait 11 month if we are in May), then they will do a lottery of the $5k pieces of paper to draw who gets to go to his job. If you are a winner, you can start in October, you won't be considered a resident or an immigrant though. You are a non-immigrant and your residency is based upon keeping your job.
Let me go back to the timing: once a company interviewed you and decided to hire you, it can take up to 18 months before you get a temporary work visa that let you start your job. In the tech industry, companies can die and appear in such a lapse of time. As a result, and given the complexity of preparing it, the H1-B only work for very specific areas or large corporations, it is not small business friendly. It however works marvel for fraud schemes who know how to deal with the bureaucracy.
Hopefully, the quotas don't apply to everyone, in particular, it doesn't apply to Canadians and Mexicans, who can simply to a TN visa, which is much simpler than the H1-B, almost immediate, and doesn't require a lawyer. So if you are French and really want to work in the US, it might be easier for you to simply apply for the Canadian Citizenship (more on this bellow), and then come to the US as a Canadian. Or marry a Mexican.
So how does it work in Canada?
It's hard to think about the US immigration rules without comparing it with the Canadians rules. There are several ways to get a Canadian residency (what is known in the US as "green card"), which can convert in Citizenship, like in the US. In Canada, you can either go through the Provincial path or National road. The system works with points, and takes into account a number of factors like language proficiency, years lived in Canada, degree obtained or equivalent experience, weither you already have a job offer from a Canadian company and once you reach a certain score, you know you are most likely eligible for Canadian residency. In the US, an alien who hardly speak English can have more facilities (family-based) to get residency than a PhD. Talk about equal opportunities.
Even worse, Entrepreneurs can't get a visa either
Now as an entrepreneur, there are more or less 2 visas for you:
- EB-5, Investor Green Card
- E-2, Treaty Investor
There is also the extraordinary ability temporary visa (O-1) and residence/green card (EB-1). Although I have created a Web hosting company at age 14, gotten a M.S. at 20 and speak fluently 4 languages, I apparently still don't enter that category. You might as an acrobat if you have had a lot of press coverage (I am not kidding).
Now let's go back to EB-5 and E-2. As their title implies, these are actually investor visas. They basically are for entrepreneurs bringing their own money to start their business. We are talking about minimum $1 million for the EB-5 and $100k for the E-2.
Now EB-5 is out of the picture, not many young tech entrepreneurs have $1 million to invest, unless they have been quite successful before AND want to cope with the restrictions the EB-5 visa will impose them on how to finance and scale their company. Please cite me a self-made tech star who has invested $1 million and hired 10 people full-time in a new tech business on day 1 and has been successful.
That leaves us to E-2. You though the EB-5 is restrictive? Think again. Although $100k can be enough to get an E-2 (which is an indefinite unfair temporary visa), the $100k have to come exclusively from the entrepreneur (it can't even be from friends & family), which still mostly exclude first time young entrepreneurs. Also, the investor need to have a control of 50% minimum in the new venture (alone or in association with other nationals of the treaty country). If you are a skilled and experienced entrepreneur starting an Internet or green tech venture, you most likely have 1 or 2 other co-founders and leave of pool of options for investors and top employees. You also make sure that you have international diversity and/or an American founder. Consequently that 50% requirement can simply eliminate a large quantity of quality companies that have otherwise outstanding teams and sensible funding strategies. The E-2 visa will however work great for you if you want to open a restaurant with your brother.
Why this is so important in the sectors of innovation
According to a recent TechCrunh article:
Fifty-two percent of Silicon Valley’s startups from 1995 to 2005 were founded by foreign-born workers. And in 2006, 26% of America’s global patents—including 40% of those filed by the U.S. government, 72% of Qualcomm’s, 65% of Merck & Co.’s, and 64% of General Electric’s—were invented wholly or partly by foreign nationals residing in the U.S
Let's make sure this doesn't become history. If the US immigration system is not reformed, the US job market and the US innovation mojo is going to learn two hard rules of life when it will already be too late:
- Capital moves freely
- Tech startups want to be able hire people from anywhere
In today's age, it's easy to travel and you can create a company pretty much anywhere. If a startup created in California can't easily hire any skilled engineer (yet alone a founder) from Europe or somewhere else while a competitor in London can hire the best talent from all over the world (including the U.S.) and get their immigration papers done in 3 weeks at the fraction of the cost, guess where new companies are increasingly going to be started?
In the innovation sector the lesson can be very painful for the job market and the economy. Let's take the Consumer Internet industry. It makes no difference from a user if a service is offered by a company based in Palo Alto (Facebook) or Luxembourg (Skype). The difference though, is that the money made by the company is going to it's headquarters and the jobs too. Same thing in green tech the license fees paid for the patents go the the company HQ, which will hire, spend money and pay taxes in its home country.
Jobs are created with incentives, not restrictions.
Some of the solutions
Short term: pass the darn Startup Visa
True entrepreneurs need startup visas, not investor visas. Because they have no money, they already spent it all working on their ideas and others gadgets for their research. Great local investors recognize their value and want to invest with them. It forces brain capital selection as opposed to the current system privileging the short term and fraud-friendly money requirements.
This mini-reform is an urgently needed relief for entrepreneurs. Please support it in any way possible.
Long term: fix the system
One idea: A cap and trade system with Europe
Here I come with a childish dreams. This is not entirely related with entrepreneur/engineer visas, but it is at large, simply a way to free the move of people between two entities with the same living standards: the U.S. and Europe. You know, like it used to be. This would also help the US and Europe in better competing with rising Asian powers.
If next year, more Americans want to move to Europe than Europeans want to move to the U.S. (I have no idea about the current trends), why not save them the costly and hard requirements and just allow them indefinite residency in Europe, in exchange of what the US would allow the same number of European to obtain a cap and trade green card (which is simply a residency permit). And vice-versa. Remember the extensive security and health checks are part of the visa issuance for all visas, so this will still be in place. There should't be any job concerns or competition if the cap and trade quotas are closely adjusted to the demand. There would be competition to attract the brightest though, which is positive and sort of an already established competition.
This is an easy and cheap way to quickly create durable wealth in Europe and in the U.S. and stand up to China.
Oh well, I maybe dreaming. For now I can keep playing the Green Card Lottery. In fact I have statistically more chances to get a green card in a timely fashion just doing that than through many other routes.
This article is certainly not perfect, and I am open to notes and corrections, as well as any data and sources that can support or oppose the points elaborated. Thanks for reading!
, : Data from the Department of Homeland Security: http://www.dhs.gov/xlibrary/assets/statistics/publications/lpr_fr_2009.pdf
: E-2 reform petition: http://www.petitiononline.com/E2Visa/petition.html