By Anayat Durrani
A bill introduced in Congress proposing a new visa category for migrant entrepreneurs, Let Immigrants Kickstart Employment (LIKE) Act, may be an alternate visa program to the EB-5 investor program. If passed, the LIKE Act encourages the establishment of start-up companies in the U.S. to spur economic growth and create jobs.
“Both the LIKE Act and EB-5 visa give foreign business owners/founders a path to permanent residency if certain conditions are met. However, they are very different as well,” says Ying (Elissa) Lu, Attorney at Law, Law Office of Lu & Associates.
The Like Act, introduced by House Subcommittee on Immigration and Citizenship Chair Zoe Lofgren, would create a new temporary visa for founders of start-ups and a pathway to permanent residence. It would create a new visa category, the W, which would allow immigrant entrepreneurs to remain in the U.S. for a period of three years.
“Under the LIKE Act, the applicants should have at least 10% ownership interest in a start-up entity that has received $250,000 from qualified U.S. investors or $100,000 from government awards or grants. There is no minimum amount set for the applicants regarding how much himself/herself needs to invest,” says Lu.
But for the EB-5 visa, an investor must invest a certain amount in order to be eligible for the EB-5 visa. Currently, the required minimum EB-5 investment amount is $1 million and the minimum investment amount for investment in a Targeted Employment Area (TEA) is $500,000 and investors must prove that the invested capital was obtained through lawful means.
“In a scenario where the alien, for example, a Stanford student who founded a start-up, does not possess a high net worth, the EB-5 visa may not be available to him/her,” says Lu. “However, the LIKE Act may provide a new option. On the contrary, EB-5 visa may be the only option for a foreign investor whose start-up fails to obtain $250,000 from qualified U.S. investors or $100,000 from government awards or grants.”
Jonathan A. Grode, Esq., U.S. Practice Director, Green and Spiegel LLC, says he is very keen on the program, but feels it will not have much of a chance passing through Congress.
“So this is different than the EB-5 in many ways and is more akin to the Entrepreneur in Residence Program that was created by Obama, cancelled by Trump, and revived by Biden. It is a nonimmigrant visa rather than an immigrant visa,” says Grode.
Grode says the LIKE Act is geared toward creating a visa to allow for entrepreneurial activity for those that are unable to get the E-2 visa.
“Personally, I really like this idea and think it could be a great compliment to the myriad of existing nonimmigrant visas,” says Grode. “It should be viewed as another option, but not a replacement for EB-5.”
Lu notes that the processing of EB-5 visa is currently backlogged and as such will not attract innovative immigrant entrepreneurs to come to, and remain in, the U.S.
“However, the LIKE Act not only provides a dual intent W-1 visa which allows the applicants to temporarily work in the U.S. as a nonimmigrant, but also let them seek lawful permanent residency in the United States,” says Lu. “Further, green cards under the LIKE Act would not be subject to numerical limitations under INA sections 201, 202, and 203. Therefore, it may not face severe backlog as the EB-5 visa.”
Lu says the LIKE Act and EB-5 have different legislative purposes and usages. She says she doesn’t see the LIKE Act as replacing the EB-5 visa but, “they can co-exist.”
Mitch Wexler, managing partner of Fragomen's Southern California offices, agrees and says he does not see the LIKE Act replacing EB-5 since each is designed to address a different constituency.
“LIKE is for entrepreneurs and EB-5 is designed for passive equity investors, at least in the regional center program. Direct EB-5 can be for entrepreneurs but still requires a personal investment, not funds raised from VCs,” says Wexler.
Meanwhile, what happens to the LIKE Act and the EB-5 program remain to be seen.
“LIKE just needs to work through the legislative process and we are just patiently waiting for the Regional Center Program to be reauthorized,” says Wexler. "We remain cautiously optimistic.”