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Startup Visa Could Create 1.6 Million Jobs According to Kauffman Foundation

February 27, 2013

By Cynthia Herbert :: 10:44 AM

Startup visa could create 1.6 million U.S. jobs.According to a white paper released today by the Ewing Marion Kauffman Foundation, the addition of Startup Visas could have the potential to add between 500,000 and 1.6 million new jobs in the United States over the next 10 years.

The visas, provisions for which are included in the bipartisan Startup Act 3.0 bill that was just introduced in the U.S. Senate, would be made available to a pool of 75,000 foreign-born individuals who are already holders of either H-1B visas or F-1 student visas and who start new companies in the United States.

These foreign-born entrepreneurs would be required to employ at least two full-time, non-family workers during their first year of business, and to invest – or raise an investment – of $100,000 or more.

If they meet these first-year requirements, Startup Visa recipients would then be issued a three-year extension on their visa. During that subsequent three-year period, if the new business hires an average of one additional employee each year, the business owner will be allowed to apply for permanent status.

“There’s hope that 2013 finally may be the year the United States implements comprehensive immigration reform,” said Dane Stangler, director of research and policy for the Kauffman Foundation. “However, that legislation would fall short if it fails to create a new visa for the thousands of potential foreign-born entrepreneurs who are already in the country, particularly those who are likely to start technology and engineering firms.”

Previous research has shown that technology and engineering startups founded by non-US citizens employ an average of 21.37 people per business.

This scenario outlined in the Startup Visa plan coukd create, at minimum, 1.6 million jobs over 10 years, or 1.6 percent of GDP, among companies that age out of the program. Job counts from younger companies, established as new visa slots open, and jobs created after Startup Visa companies come out of the program could raise these job estimates considerably.

In addition to provisions for new business owners, the Startup Act 3.0 bill also creates a new five-year visa for foreign students in STEM disciplines who land jobs in technical fields after they graduate. Students would then have the ability to become legal residents and possibly citizens after that five years.