Immigration Advisory: Attention Foreign Entrepreneurs: New Startup Visa Act Of 2010 Introduced In Congress

On February 24, 2010, Senators John Kerry (D-MA) and Richard Lugar (R-IN) introduced the StartUp Visa Act of 2010. This proposed legislation, if passed into law, would create a second immigrant ("green card") investor visa category for foreign entrepreneurs.

The current immigrant investor category, known as the EB-5 category, requires an investment of $1 million of the foreign investor's personal, at-risk funds which must be used to create 10 new jobs for U.S. workers. The investment amount can be lowered to $500,000 if the investment is made in an area designated as a high-unemployment area. Very few foreign investors take advantage of this option because of the relatively high amount of at-risk, personal funds needed to qualify.

Senators Kerry and Lugar's proposal modifies the EB-5 requirement and would create a new EB-6 category. Visas allotted for the EB-6 category would come from the existing EB-5 allotment of up to 10,000 per fiscal year. The EB-6 category would allow a foreign entrepreneur to qualify for a two-year conditional permanent residency status with $250,000 in investment funds secured from qualified U.S. investors. The foreign entrepreneur would qualify for lawful permanent residence ("green card") if, during the two-year conditional period, he or she attracts additional investment totaling $1 million or has $1 million in revenue, and creates five new jobs.

As the Chairman and the ranking member of the Senate Foreign Relations Committee, respectively, Senator Kerry and Senator Lugar have heard from numerous foreign entrepreneurs willing to put their talents to work in the U.S., and from U.S.-based venture capital firms willing to invest in their ideas. However, the current immigrant investor category does not allow the foreign entrepreneur to utilize venture-backed funding as part of the investment, because that type of funding is not at the personal risk of the entrepreneur. The result has been that many good ideas from foreign...