As a Silicon Valley immigration lawyer, I received several e-mails from clients and colleagues last week excited about the blog post by the USCIS Director concerning visa options for entrepreneurs, and what it could mean. I often meet with entrepreneurial foreign nationals who want to start their own company but first need to explore their visa options. As our immigration laws don't provide for any type of "start-up visa", their options are usually limited.
Foreign national entrepreneurs still don't have a start-up visa. But based on USCIS Director Mayorkas' recent blog post, maybe we're inching closer to squeezing the realities of Silicon Valley style start-up ventures into the confines of U.S. immigration laws, currently viewed by the USCIS as if they were developed only for traditional, large corporate businesses. His blog post, followed by a joint announcement with U.S. Secretary of Homeland Security Janet Napolitano, and subsequent USCIS Fact Sheets put an entrepreneurial "slant" on current immigration laws. Mayorkas' post and the joint announcement made it sound like existing visa categories could now be used for foreign entrepreneurs wishing to start new U.S. companies.
However, no one has announced anything new and there have been no new laws passed by Congress regarding visas for entrepreneurs. Mayorkas and Napolitano simply highlighted how current visa categories could be used for immigrant entrepreneurs.
One example is the H-1B visa, a work visa for professional workers whose occupation typically requires at least a Bachelor's degree in a particular field. The current USCIS position is that a corporation cannot sponsor the corporation's primary shareholders for an H-1B visa, under the theory that there is no legitimate "employer-employee" relationship. This attitude essentially eliminates the H-1B option for small start-up companies whose founders are often major shareholders. The USCIS articulated this position via internal memorandum back in January 2010. Before that time, the USCIS recognized the corporate tenet that a corporation is a distinct legal entity from its shareholders, and approved H-1B visa petitions for employees who were also the sole shareholder of the sponsoring corporation. The 2010 memorandum included two footnotes that acknowledged these prior decisions, but stated that if the employee reported to no one other than themselves, there may not be an acceptable "employee-employee" relationship to qualify for an H-1B.
Director Mayorkas' post, and the USCIS announcement, explains that as long as there is a Board of Directors that maintains control over the H-1B employee/primary shareholder, then there could be an employer-employee relationship. While this is nothing new, the missive is clear: Foreign nationals who want to start their own company need to set up a corporation that includes other people on the Board of Directors, and the Board needs to have some control over the H-1B employee. How much control, how many Board members, who those Board members are, and what type of documentation will establish the requisite "control", remains to be seen.
Even though Mayorkas and Napolitano, and the corresponding USCIS Fact Sheets simply reiterate current immigration law, it's a positive step towards reconciling small and start-up businesses with immigration laws. We will see if his message goes out to the USCIS adjudicators, and whether they will be able to acknowledge that a new, two-employee corporation with a separate Board of Directors, can still be a legitimate business and sponsor its two employees for an H-1B.