Alex Nowrasteh

Alex Nowrasteh is a policy analyst at the Competitive Enterprise Institute. Here, he argues that allowing skilled foreigners to work in the U.S. will boost entrepreneurship, and outlines the steps Congress should take to attract and retain these workers.

Homeland Security (DHS) Secretary Janet Napolitano and U.S. Citizenship and Immigration Services (CIS) Director Alejandro Mayorkas recently outlined steps that would lower restrictions and regulations on visas for highly skilled workers, entrepreneurs and investors. But while these changes are a step in the right direction, much more is still needed.

Under the reforms, some immigrant entrepreneurs will be able to employ themselves with an H-1B visa.  Currently all H-1B visas -- temporary work visas for highly skilled workers in specialty occupations -- are sponsored by employers. They run for three years, are renewable once, and are capped at 65,000, with 20,000 additional spots for foreign advanced graduates from American universities. H-1B workers have been instrumental in the growth of the American IT industry.  As of 2008, one-third of all Silicon Valley companies were founded or co-founded by Indian or Chinese nationals who were able to legally work in the U.S. with an H-1B visa or green card.

The DHS and CIS reforms will also affect EB-2 and EB-5 visas. The EB-2 is available to foreigners with exceptional ability, or an advanced degree, and has an annual cap of 40,000. Normally EB-2 petitioners have to fill out the complicated and costly Labor Certificate, which proves to the government that a company actually needs to hire a foreigner. The reforms would make it easier to apply for the National Interest Waiver as an exception to the Labor Certificate. Streamlining the process is a welcome reform, but there is no good reason why any firm should have to justify any business decision to the government. The Labor Certificate should be abolished.

The EB-5 is an investor visa with an annual cap of 10,000. A successful EB-5 petitioner must invest $1 million in a new U.S. commercial enterprise ($500,000 in an economically distressed area); directly create 10 new jobs within two years; or significantly expand an existing U.S. business. Normally it takes the government six months to a year to process an EB-5 application -- a significant bureaucratic hold-up for any investor.

Napolitano and Mayorkas have promised to shorten the process to weeks rather than months. The EB-5 is vastly underused due to the costly bureaucratic approval process and limitations on the definition of a “commercial enterprise.” Streamlining the process and lowering the investment threshold would help tremendously to jump-start American economic growth.

In that light, a proposal from George Mason University economics professor Alexander Tabarrok deserves consideration. Tabarrok suggests that visas like the EB-5 should be adjusted to count home purchases as an investment that earns a green card for the investor. Current EB-5 criteria don’t count noncommercial activities -- such as owning and operating a personal residence -- as investments. Purchasing a home is often the largest investment most Americans make: The definition for the EB-5 should be expanded to include purchases of residential property.

Allowing highly skilled workers, entrepreneurs and investors into the country will harness more of the foreign entrepreneurial talent that built Silicon Valley and many other industries. The DHS/CIS initiative is a good start, despite potential legal landmines. Congress should build on it by raising the caps on visas, lowering fees and removing invasive regulations.

Alex Nowrasteh is a policy analyst at the Competitive Enterprise Institute.