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February 15, 2012

Berman’s Israeli investor visa bill: a small (and problematic) fix

http://www.jewishjournal.com/blog/item/bermans_israeli_investor_visa_bill_a_small_and_problematic_fix_20120215/

This entry takes a closer look at a bill mentioned near the end of the run-down of the race in the 30th district that appears in the newest issue of the Jewish Journal.

When Rep. Howard Berman (D-Van Nuys) introduced a bill that would allow certain Israeli entrepreneurs to apply for a type of investor visa currently unavailable to them, he cited two reasons to support the bill: Strengthening the Israeli-American relationship and adding jobs to the American economy.

“Israel is one of our closest allies in the world and a significant investor in the U.S. economy,” Berman said in a statement on Feb. 9, the day he introduced H.R. 3992. “The E-2 investor visa program will strengthen the vital U.S.-Israel relationship, boost the American middle class, and help grow the economies of both countries.”

Sounds great, right? I mean, a lot of people—powerful people—have been saying this lately, that the United States needs to work harder to attract foreign entrepreneurs as a way to improve the economy. Even President Obama made promoting immigration for high-skilled foreigners a major feature of this year’s State of the Union Address.

“It’s now a global competition for talent and America should be doing everything possible to attract immigrant entrepreneurs who want to invest in America and create new jobs,” said John Feinblatt, who runs the Partnership for a New American Economy. That organization was started by New York City Mayor Michael Bloomberg and media mogul Rupert Murdoch to advocate for policies that promote “high-skilled immigration reform.”

And Berman’s bill does this—sort of—but only in a very limited way, and it does so by proposing to extend to Israelis a visa whose problems are already well known to both immigration attorneys and the entrepreneurs themselves.

The E-2 investor visa, which is today available to investors from more than 70 other countries—including Britain, Montenegro and Iran, JTA reported—is a nonimmigrant visa that allows investors who bring substantial amount of money from their home country to start businesses in the U.S., to live in the U.S. for a short period of time while developing those businesses.

But it’s only available to investors who bring money to the United States from their home country. (Nobody says exactly how much money one needs, but it’s at least $50,000 according to Haaretz’s report on the bill.) So Amit Aharoni, an Israeli-born entrepreneur who graduated from Stanford Business School and started a web-based business that employs nine Americans in San Francisco, wouldn’t be eligible.

Aharoni established CruiseWise, a web-based startup that helps consumers choose and buy cruise vacations. He had raised $1.65 million in startup cash—$1 million of it was from outside the United States, but not from Israel—when he was denied a different type of visa in October 2011, an H1-B visa.

Aharoni’s story was featured on ABC News, at which point his visa was quickly approved. But the experience led the 32-year-old to conclude that there are some unnecessary hurdles that stand in the way of entrepreneurs looking to start businesses in the United States.

“There’s no good visa to support entrepreneurs,” Aharoni told me. “H1B is really a ‘Specialty Occupation’ visa.”

Another problem with the E-2 visa is that it has to be renewed frequently—every two years, in the case of Berman’s bill for Israeli entrepreneurs, according to a member of the Congressman’s staff. And the visa offers no path to citizenship for those who start businesses here.

“The E-2 visa is, in the long term, not going to solve the interests of promoting foreign entrepreneurs—coming here risking everything and setting down roots,” said Deborah Notkin, an immigration lawyer in New York. “We really need a entrepreneurship visa that gives those who are successful a pathway to permanent residence, along with their families.”

Zoe Adams of Lakeland, Fla., is one such entrepreneur. She arrived, with her husband and two children, from Britain, in September 2003 on an E-2 visa. They started a pool servicing business that today employs four people.

But being on an E-2 visa, Adams can’t plan for the future in any sustained way. “You can only work in increments of five years,” Adams said, adding that her husband was about to go back to England, hoping to get his visa renewed. “We can’t really plan anything at the moment until we definitely know that we’re okay for another five years.”

That uncertainty—together with the worry that her daughter, now a college student in Florida on her own student visa, might eventually be forced to leave the United States—led Adams to start E2VisaReform.org.

Adams, together with a few other entrepreneurial foreigners living in the U.S. on E-2 visas, has been pushing for changes to the E-2 visa. And though her business is small, she says that some of those in her coalition—she’s got email addresses for about 500 people—are much larger.

“We clean 250 pools a week,” Adams said. “My husband’s a licensed state contractor. We’re the epitome of a small business.”

“For every person like me,” Adams said, “there’s somebody else who has 25, or 50 employees, or more than 100.”

Nevertheless, Berman’s bill was welcomed by Israeli Ambassador Michael Oren welcomed. In a written statement, Oren appeared to say that the bill—and a companion bill introduced last year in the Senate—was the product of joint work by Israeli diplomats and American lawmakers.

“In working with the Embassy of Israel’s Office of Congressional Affairs and its Economic Mission,” Oren said in the statement, “and with the introduction of this legislation, the U.S. Congress advances shared political and economic interests that will enable the business communities in both countries to expand bilateral investments.”

If the E-2 is so fraught with problems, why are Berman and other lawmakers trying push this bill forward? And why would the Israeli embassy be so enthusiastic about it?

Perhaps because, in the political gridlock of Washington, D.C., it’s a limited, unobjectionable solution.

“It’s a tiny little fix and there’s not a lot to make one oppose it,” said Notkin, the immigration lawyer. “A bigger fix…might meet with some resistance.”

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