Attracting Foreign Entrepreneurs | Business Roundtable

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The State of ImmigrationAttracting Foreign Entrepreneurs

Given the entrepreneurial spirit of the American economy, it is noteworthy that the country lacks an “entrepreneur visa,” meaning  no legal mechanism allows someone with a good idea to obtain both a temporary visa and permanent residence for starting a successful business in the country.

Given the entrepreneurial spirit of the American economy, it is noteworthy that the country lacks an “entrepreneur visa,” meaning no legal mechanism allows someone with a good idea to obtain both a temporary visa and permanent residence for starting a successful business in the country.

While many immigrants are successful entrepreneurs in the United States, they accomplish this only after gaining permanent residence through another part of the legal immigration system, either as a refugee or as a family- or employer-sponsored immigrant. Many years may pass while a foreign national with an idea and even financial backing must wait for that permanent residence status before being permitted to start a business. That delay means many potential entrepreneurs may leave the United States to pursue that dream elsewhere or simply miss out on an opportunity to start a company.

The closest thing is the EB-5 Immigrant Investor visa, which is for investors, not entrepreneurs. Foreign nationals invest usually $500,000 in ongoing projects, such as hotels or casinos. The E-2 visa for treaty investors is for temporary status (not permanent residence) and is not open to entrepreneurs from India, China and a number of other countries. President Obama has proposed expanding the use of “national interest waivers” and granting “parole” to give more foreign-born entrepreneurs a chance to stay in America long term to build their businesses. Given that adjudicators are not known for giving great deference to employer-sponsored immigration, including startup activities, administrative policy changes are likely to be less effective than a legislative solution that establishes an entrepreneur visa.

Australia
In Australia, an individual can use an existing entity in another country to set up a business and obtain a visa, which would operate similarly to what business people in the United States envision as an entrepreneur visa. Similarly, a substantial investment from a venture capital firm in a business is often sufficient for someone to obtain temporary status as the head of the office in Australia, according to Australian registered migration agent Tim Denney.128

Germany, France, the U.K. and Switzerland
Germany, France, the U.K. and Switzerland permit any EU citizen to enter their countries and start a business without contacting immigration authorities. That is a significant advantage over any other type of government program geared to raising particular dollar amounts from outside investors. In addition, Germany maintains a visa category that allows entrepreneurs to submit plans that will be approved if they are “plausible and realistic,” noted Lucy Jacobs of Palladium Mobility Group, and if the individual has sufficient funds to live at least two years in Germany and will later employ at least three German nationals over five years.139

The U.K. allows non-EU entrepreneurs who show the ability to invest 200,000 British pounds (about $300,000) — plus have a business plan to create at least two jobs — to obtain a temporary visa. In addition, although not widely used, provisions in U.K. immigration law allow an international student at a British university to obtain a visa if he or she can raise 50,000 British pounds (about $75,000). In some cases, the universities themselves can even partner with international students.

A non-EU national may be able to obtain a work and residence permit for starting a business in Switzerland, but to gain approval generally the individual needs to demonstrate a track record in business, as well as a realistic business plan benefiting the economy and business diversity of the respective Swiss region, according to attorney Nina Perch.140 Although setting up a company is relatively easy in Switzerland, noted Perch, it does not automatically entitle an individual to obtain a work and residence permit.

In theory, foreign entrepreneurs in France could use the Skills and Talent category to obtain a visa, but few have gained approval to date. A proposal aimed at competing with the United States, Canada and the U.K. would permit a foreign entrepreneur to gain a visa if he or she invests 500,000 euros (about $560,000) and creates 10 jobs. As an EU member, France is open for any member of the EU to enter France and start a business.

Hong Kong
Although the application process has tightened over the past year, according to attorney Magdalene Tennant, a partner with Fragomen Worldwide in Hong Kong, it remains quite possible for individuals to be granted an entrepreneur visa in Hong Kong.141 One of the main criteria for the grant of such a visa lies in whether an individual is able to prove that his or her business will make a significant contribution to the Hong Kong economy. An individual must usually provide details to the Immigration Department that include a two-year business and employment plan. An individual should ideally invest not less than 1 million to 1.5 million Hong Kong dollars (about $130,000 to $195,000). The more unique the business and the greater the likelihood to add unique talent to Hong Kong, the greater chance the visa will be approved, according to legal experts.

Canada
A number of Canadian provinces maintain programs to attract foreign entrepreneurs who bring in substantial sums of money for a new business, similar to America’s Immigrant Investor visa program (EB-5), or by allowing venture capital firms to invest in the new company. However, relatively few individuals immigrate to Canada under these programs. One reason is that other parts of the Canadian immigration system carry a lower burden to gain permanent residence, particularly for talented individuals. The federal government in Canada has experimented with immigrant entrepreneur programs without lasting success.148

Singapore
Singapore permits entrepreneurs to obtain a visa, but given the conditions attached to it, Mark Chowdhry generally recommends clients, such as CEOs, qualify for an Employment Pass to avoid obligations a startup company might not be able to meet.149

Japan
Japan has rules on the equivalent of a temporary visa for entrepreneurs. By law, an investment of 5 million Japanese yen (about $42,000) can be approved for an investor/business manager visa. That reflects changes made to the law in 2014 to liberalize the rules, including permitting a Business Management visa to be used both by foreign investors and foreign business managers hired by a Japanese company that provides investment capital to a venture. Still, the denial rates for such a visa are higher than for other work visas, according to immigration attorney Yoshio Shimoda.150


128. Interview with Tim Denney.
139. Interview with Lucy Jacobs.
140. Interview with Nina Perch.
141. Interview with Magdalene Tennant.
148. Fragomen Worldwide in Canada; interview with Peter Rekai.
149. Interview with Mark Chowdhry.
150. Interview with Yoshio Shimoda.

Score Breakdown by Country on Attracting Foreign Entrepreneurs

Germany
Germany 4.0

Entrepreneurs from the EU can set up a business without immigration processing. A non-EU citizen can submit plans to gain a temporary visa as an entrepreneur.

View Germany Profile
Australia
Australia 3.5

An existing entity in another country or a substantial investment from a venture capital firm allows temporary status as head of office in Australia.

View Australia Profile
Singapore
Singapore 3.5

Entrepreneurs can obtain temporary visas, but obtaining a “general employment pass” to run a company is often easier.

View Singapore Profile
United Kingdom
United Kingdom 4.0

Entrepreneurs from the EU can set up businesses without immigration processing. Non-EU citizens, including international students, can submit plans to gain temporary visas as entrepreneurs provided they can show evidence of sufficient funds to invest in the new businesses.

View United Kingdom Profile
France
France 3.0

Entrepreneurs from the EU can set up businesses without immigration processing. Non-EU citizens have a difficult time.

View France Profile
Hong Kong
Hong Kong 3.0

It is possible to gain a renewable visa as an entrepreneur with reasonable investment minimums on the basis that there is a benefit to the Hong Kong economy.

View Hong Kong Profile
Switzerland
Switzerland 3.0

Entrepreneurs from the EU can set up businesses without immigration processing. Non-EU citizens can submit plans to gain temporary visas as entrepreneurs, although the process is not easy.

View Switzerland Profile
Canada
Canada 2.0

At the federal level, the Canadian government has experimented with entrepreneur visa programs without success. A number of Canadian provinces maintain programs that have brought in a small number of foreign entrepreneurs. 

View Canada Profile
United States
United States 1.5

No genuine immigration category exists for entrepreneurs. Immigrants start businesses in the United States typically only after years of waiting to become family- or employer-sponsored immigrants, not through a visa designed for foreign entrepreneurs. This lack of a visa encourages foreigners with ideas and the ability to attract capital to pursue startup opportunities in other nations when possible.

View United States Profile
Japan
Japan 2.5

It is possible to qualify for the equivalent of an entrepreneur visa in Japan, but denial rates are high. 

View Japan Profile

About the Report

Business Roundtable selected the evaluated countries based on five criteria:

1. Worldwide university rankings;
2. Per-capita income;
3. Gross domestic product growth rate;
4. Net migration rate; and
5. Research and development investment.

After comparing each advanced economy relative to the five criteria, the top 10 countries (including the United States) were selected for the study: Australia, Canada, France, Germany, Hong Kong, Japan, Singapore, Switzerland and the United Kingdom (U.K.). Not coincidentally, these are the countries with which the United States competes most for foreign talent, particularly in science and technology fields.

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