Published on:

Foreign Entrepreneurs are Taking Their Money Elsewhere – to Canada

1416931_untitled.jpgTwo years ago, it seemed that it was only a matter of time before Congress passed comprehensive immigration reform. In June of 2012, the President implemented his Deferred Action for Childhood Arrivals program and the following summer, the Senate passed its own version of the long-awaited immigration bill. However, the bill and the reform progress came to an abrupt halt at the feet of the House of Representatives. In the almost two years that have passed since, the country is no closer to achieving any of its immigration-related goals and continues to lose foreign nationals who could serve the national interest in many areas.

It seems that the U.S.’s loss is Canada’s gain. Recently, CNN Money reported that other nations, most notably Canada, are taking advantage of the U.S.’s fractured immigration system and our stalled reform efforts by implementing their own programs to welcome the world’s professional leaders and entrepreneurs.

What Has the U.S. Lost?

According to the CNN report, many foreign entrepreneurs are opting to launch their new businesses in Canada as opposed to the U.S., because the entrepreneurs have found that the Canadian immigration system is much easier to navigate and much more welcoming. The report specifically points to an Indian engineer who relocated his business to Canada after spending years in the U.S. IT industry, and an American who had to relocate his own tech company because his French partner could not secure a U.S. visa.

What is Canada Doing Right?

The stalled comprehensive immigration reform bill is all the more frustrating when you consider that the Senate’s version contained a startup visa provision. However, the startup visa program was never implemented since the House never passed the bill.

In contrast, Canada launched its own startup visa program specifically aimed at attracting foreign entrepreneurs in April 2013. The Canadian program contains a pathway to citizenship and allots nearly 3,000 such visas every year. Moreover, the program’s requirements are much simpler when compared to the U.S.’s current entrepreneur program which is called the EB-5 program. To qualify for the U.S. program, the foreign national must invest at least $500,000 or $1 million depending on the geographic location of the commercial enterprise receiving the investment. In Canada, the entrepreneur need only invest $200,000 (if the investment is coming from a Canadian venture capital fund) and merely $75,000 (if the investment is coming from a Canadian “angel investor” group).

Moreover, Canada will not rescind the entrepreneur’s permanent resident in the event that the startup business fails. In contrast, the U.S. EB-5 program requires the foreign investor to show that the commercial enterprise has created at least 10 new jobs – a feat that cannot be accomplished if the business fails. If the foreign investor cannot meet this requirement, the U.S. will not let the investor become a permanent resident.

The Rant

The U.S. economy continues to struggle to get back on its feet. The immigration system continues to thwart the capabilities of skilled and talented foreign nationals to come to the U.S. and contribute to American society and the economy. Congress must take action soon before the nation loses any more of the best and brightest entrepreneurs to our neighbor to the north. Continue to check back with our blog for all of the latest immigration-related news.

Additional Blog Posts

What Immigrants Need to Know About the Government Shutdown, ImmigRantings, October 10, 2013
Problems with the H-1B visa: From Work Horse to Show Pony, ImmigRantings, February 13, 2012