Potential Negative Impact of the “Fairness for High-Skilled Immigrants Act” on Job Producing Foreign Nationals in the U.S.

The Fairness for High Skilled Immigrants Act (S. 386) was recently introduced in the Senate and is a companion bill similar to HR 1044, which the House passed on July 10, 2019. Compromise language is being developed in the Senate but the legislation has not been passed there yet. It is questionable whether President Trump would even sign legislation enacted by the Congress.

These two bills give hope to 300,000+ mostly Indian nationals to accelerate their green card process. Many technology workers from India have entered the U.S. on the H-1B visa (temporary employment) and then applied for an employment based green card. HR 1044 would remove the country cap for employment-based visas (currently at 7% for any one nationality). With the current country cap and current backlog, some of these Indian green card applicants could be waiting for over 50 years to receive their green card.

While HR 1044 would benefit the vast Indian population of technology workers, it would disadvantage citizens of other nationalities who have applied or are in the process of applying for an employment based green card. What might have been an expected 12 to 18-month wait could turn to 5 to 6+ years. As of October 2019, only a few countries such as China and India have reached their employment based green card quotas so processing times for most other nationalities are less than one year.

Many of Visa Franchise’s clients, have come to the U.S on a temporary basis under the E-2 visa (an investor treaty visa with 70+ nations) and have created successful businesses in the U.S. Because of the businesses’ success and adaption of their families to the U.S. way of life, many of them later decide to reside permanently in the U.S. Fundamentally, these entrepreneurs create many American jobs and produce American products and services throughout the U.S. A typical E-2 visa entrepreneur will hire approximately five Americans over a 5-year period and many E-2 visa investors create 20 to 30+ jobs over that same period of 5 years. Our clients could be negatively impacted by the “Fairness for High-Skilled Immigrants Act” if it is enacted into law. Before suggesting potential solutions, it is helpful to review the below case studies of our clients. These case studies reflect the difficulties foreign entrepreneurs have in residing in the U.S. on a permanent basis.

Case Studies

Using our data base of 300+ families that Visa Franchise has supported in finding and analyzing franchises throughout the U.S., we have chosen three case studies that reflect our clients’ experience with U.S. business and immigration

*Certain Items Such As The Name, Business Industry And Nationality Have Been Modified To Protect Their Identities

Francisco Martinez
Age: 42
Nationality: Argentina
Visa Category: E-2 visa
Path to Permanent Residence: EB-5 visa

In January 2017, Francisco moved to Houston, Texas with his wife and two young children. Through an investment in a barbershop franchise, he was able to receive his E-2 visa. His first barbershop currently employs two direct employees and ten barbers (as independent contractors). Due to the initial success, Francisco invested in a second location and has plans to invest in other locations.

Back in Argentina, he received his bachelor’s and master’s degrees in engineering.  After working for a large developer for 5 years, he started his own real estate development company with great success.  Given the instability in his home country, he is solely investing in his emerging barbershop franchise chain as well as in U.S. real estate.

His immigration attorney advised him that the best path to receiving a green card would be through an EB-5 visa. The EB-5 visa requires 10 full-time jobs and because the barbers are independent contractors, they do not qualify for the EB-5 visa job requirement. Therefore, he decided to invest $500,000 in a regional center real estate project and is waiting for his visa to be approved.

To date, Francisco has invested $500,000+ in businesses he actively manages and another $1,000,000+ in real estate (including for the EB-5 visa). He expects to receive the green card in one year but this might take over 5 to 6 years if the “Fairness for High-Skilled Immigrants Act” passes the Senate and is signed into law by President Trump.

Charles Martin
Age: 51
Nationality: United Kingdom
Visa Category: E-2 visa
Path to Permanent Residence: Unknown (EB-1A, EB-5 visa?)

In April 2016, Charles Martin and his family left their home in the suburbs of London, to move to Orlando, Florida. Partly motivated by the relatively long winters in London, they had been studying the move for about four years. Charles worked for a major financial institution and his wife, Claire, is an interior designer. He had always dreamed of being his own boss and managed a few rental properties in England on the side. They entertained relocating to Spain or France but given the business environment for entrepreneurs and common language, the U.S. was a clear top choice.

He invested in a property management franchise and obtained his E-2 visa. Although the first 6 to 12 months were a difficult transition for work, he has grown the network of properties under management to 90 apartments in a little over three years. He has hired four full-time American employees and works with many contractors on a part time basis.

To date, he has invested $160,000 into the property management business and another $400,000 in real estate. Charles and his family would like to stay in the U.S. but he has limited options to obtain a green card. His immigration attorney suggested the EB-5 visa but he does not have the liquidity necessary for  the $500,000 minimum requirement.. Another possibility is a special ability green card (EB-1A) but it could be complicated given his current professional background to date. Charles and Claire are worried that their children might have to return to England as once they turn 21 years old, they are no longer eligible to stay in the U.S.

Canh Nguyen
Age: 58
Nationality: Vietnam
Visa Category: L-1 visa
Path to Permanent Residence: EB-1C

Canh Nguyen is a successful Vietnamese businessman who recently relocated to Huntington Beach, California. For years, Canh and his wife, An, owned a home in Orange County, California and enrolled their three children in camp every summer. Canh runs his family’s conglomerate based in Ho Chi Minh City, Vietnam that includes a hotel, a medical device distributor and numerous car dealerships. By the time Canh connected with Visa Franchise through his immigration attorney, he had already reviewed all sorts of businesses including restaurants and gas stations. After Canh analyzed different business options presented by Visa Franchise as well as speaking to many franchisors and franchisees, he decided to invest in a medical spa. Having some familiarity with the medical space in Vietnam, he saw tremendous potential to grow a network of medical spas with the right management, location and latest medical equipment.

Canh initially invested in one medical spa for $500,000 and as part of his immigration business plan, he plans to invest in one more within three years. Canh received his L-1 visa, a visa that allows foreign executives to be transferred to the U.S. to manage the U.S. operations. To date, the spa has 15 full-time employees and with a second spa under management, he will have oversight over 25 to 30+ employees. His immigration attorney has advised him to apply for the EB-1C visa (green card equivalent of the L-1 visa) as his best path to U.S. permanent residency. He plans to apply for the EB-1C visa next month due to his concern that the “Fairness for High-Skilled Immigrants Act” that would derail his green card by another five years.

What Is The Solution? Pending Legislation And Regulations

Legislation and regulations affecting immigrant entrepreneurs should reward their efforts for investing in U.S. businesses and employing Americans. The U.S. should seek policies and enforcement mechanisms that attract foreign business owners and managers to reside in the U.S. Given the merit-based system of immigration in Australia and Canada that prioritize business skills over family connections, the U.S. is losing out on many great individuals who would drive innovation in the U.S. and have an exponential impact on American job growth. There should be legislation and/or regulation to increase the visa cap for certain employment-based visa categories or not have spouses and children count towards the cap.

Another solution to support these immigrant entrepreneurs has already been introduced in the House in the form of HR 2124, which would allow many current E-2 visa holders to adjust their status to permanent residency. HR 2124 was sponsored by Rep. Rutherford of Florida and currently has bipartisan support of another 10 cosponsors. HR 2124 has tremendous potential to create and maintain thousands of American jobs.

Visa Franchise clients have contributed to 2,081 American jobs to date and these jobs would be at risk if the foreign national business owners do not feel secure with their legal status in the U.S. (and more importantly, the legal status of their children). Many Visa Franchise clients have left their home country given political, social and/or economic instability and as Americans we should strive to make these immigrants, who are following the law, feel welcome while we work to limit instability for their families’ legal status in the U.S.

The Fairness for High-Skilled Immigrants Act has merit but should be modified by including H.R. 2124 so that those business owners and managers are not negatively impacted. Instead of creating a quick win for the tech industry that hurts small businesses and American jobs, Congress should enact legislation that does not shift the problem from one group to another.