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5 min read
USA for eXtrepreneurs
With its vibrant business ecosystem &business-friendly laws, US is considered as one of the most conducive jurisdictions for businesses in the world.
Notably, over 319 of 540 America’s startup companies valued at $1 billion or more, have at least one international founder. While the billion-dollar club founders are from diverse origins, India holds the largest share, with 66 Indian origin eXtrepreneurs (International Entrepreneurs), followed by Israel with 54 eXtrepreneurs from its origin. Collectively, the value of these 319 unicorns in the US with eXtrepreneur founders is over $1.2 trillion.
USA Startup Ecosystem
With the Silicon Valley effect spreading across the country, the US successfully continues to maintain its status of being the startup hub of the world. Holding the largest market share for majority of the sectors & industries, offers an edge to the USA startup ecosystem. The country is home to over 2800 VCs, and over 2400 Accelerators& Incubators, and offers an average funding round of over a $ 0.5 million for an early-stage startup and for Series, A, B & C was an over $15 mn, $35 mn,$55mn. Comparatively, the ticket size is higher than any other nation, globally.
To know more, download our quick read on “USA Startup Ecosystem”,
USA Company Formation
The US has three popular types of entity classifications viz. LLC, C Corp, and S Corp. While most foreign entrepreneurs incorporate LLC, those looking to have a large number of shareholders and eventually go public, prefer C Corp. While, C Corp and S Corp are not entity types per se, but tax status classifications for entrepreneurs to choose from, the option to opt for an S Corp only vests with US citizens or US residents.
To know more about company incorporation in the USA, download our “Company Formation in the USA”
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Overview
The US L-1A Program creates a pathway for founders to set up a company in the US and move themselves there or assign CXOs to run the US operations. The L-1A gateway as was initially introduced owing to the lobbying by large corporations, to enable shifting their key employees from foreign operations to the US, has now been availed by many growing companies to send one of the founders or CXOs to set-up and expand the US operations. The permit under L-1 is generally given to the Applicant for newly incorporated companies in the US and could be renewed for 2 years each for up to 7 years. During the tenure, the US Government expects the company to scale in terms of revenue and employee strength. Upon reaching a sustainable level, the Applicant could apply for Permanent Resident status under the EB-1C Green Card category.
Highlights
1
The L-1 program provides a wide group structuring option to businesses as the US company could be a holding entity, a subsidiary company or even an affiliate
2
Being one of the few options available in the states for entrepreneurs, L-1 remains a high in-demand category for medium and large corporations
3
The benefit to the US is accrued in terms of job creation, as role & responsibilities of the Applicant has to include the management of employee team(s)
4
The EB-1C Category clubbed with L-1 provides the clarity & confidence to Applicants of their permanent status pathway
Eligibility
1
For EB-1C green cards, the US company sponsoring it, must have been in active operations for at least 1 year before filing, and show that it has the ability to pay the wage of the Applicant.
2
The US company must be incorporated with a physical office space in the US and must have sufficient operations within 1year for the Applicant to manage its business.
3
The Applicant must have been employed with the foreign Company for at least 1 year prior to the filing of L-1A petition. Further, the foreign employment must be full-time, for at least 1 continuous year in the last 3 years immediately preceding the L visa.
4
The foreign company must remain operational during the L-1 tenure.
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The foreign company must be engaged in an active business abroad, performing regular and continuous provision of goods and /or services.
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The U.S. company sponsoring applicants must be a holding company, a subsidiary, or an affiliate entity to the operating foreign company.
Renewal
Permanent Status
Process and Timelines
Overview
Highlights
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Eligibility
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Renewal
Permanent Status
Process and Timelines
Overview
On 11th May 2021, the Biden Government, with its continuous immigration reforms agenda, restored the International Entrepreneur Rule ('IER'); also commonly known as US Start-up Visa. Interestingly, IER was formed by the Obama Government in January 2017, just a few days prior to the end of its tenure but was repeatedly kept in abeyance, due to the successor Government's immigration averse policies. Notably, IER provides eligible start-up founders with the right to live in the USA for up to 5 years. After the restoration, the program monitored a considerable traction in the year 2021, with a total of 13 applications as opposed to only a single application received in the preceding year.
Highlights
1
Provide the startup founders with the elusive right to live in the US
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Owing to specific guidelines, VCs/Angel Investors/Accelerators would now be confident and open to fund an immigrant's startup
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The chances of success in the EB category of green cards could be amplified with IER
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Founders who are in the USA on an H1B and with limited entrepreneurship options & opportunities, IER now have specific guidelines offering working rights in the USA
Eligibility
1
The startup should not be more than 5 years old in the USA
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Each Applicant must hold at least 10% shares in the startup with an active role
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Up to three applicants/founders can apply
4
The Startup meets at least one of the following criteria:
- Received funding of $250,000 or more from a VC/Angel Investor/Accelerator of the United States with a demonstrated history of successful investments
- Received grants from United States federal/ State/ local governments of at least$100,000 for economic, research & development, or job creation purposes
- Partially meet one or more of the above criteria and prove a potentially significant benefit to the United States
5
To renew the granted Visa under IER for another 2.5 years, the applicant must hold a minimum stake of 5% with a continuous active role (assuming the dilution in the first phase) and must have met one or more of the following criteria:
- Received additional funding of $500,000 or more from a VC/Angel Investor/Accelerator of the United States with a demonstrated history of successful investments Generated revenue of at least $500,000 annually with a 20% annual growth rate
- Created 5 full-time jobs for the United States workforce
- Partially met one or more of the above criteria and prove a potentially significant benefit to the United States
Renewal
Permanent Status
Process and Timelines
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DG Country Comparison ToolTM
CompareQuick peek at the top countries for eXtrepreneurs.
This tool compares the top nations inviting eXtrepreneurs on over 40 vital parameters to provide a holistic view and a comprehensive perspective of the Entrepreneur mobility options, the start up ecosystem and the policy benefits, to be availed.