Visas for Entrepreneurs

Overview

In 2016, the National Foundation for American Policy reported that nearly 25% of the billion-dollar startups in the US “had a founder who first came to America as an international student.”[1] Similarly, a 2015 entrepreneurship and innovation study at MIT revealed that foreign-born students were making a disproportionately large contribution to the number of companies founded by MIT alumni—despite the fact that existing US immigration laws limit pre- and post-degree entrepreneurship options for MIT international students and scholars.[2] During the 2016–2017 academic year, 3,003 international students were enrolled in degree-granting programs at MIT, accounting for 26% of all students. International undergraduates numbered 430 (10% of all undergrads) and international graduate students numbered 2,876 (43% of all grad students).

In The Engine Working Group on Visas, we surveyed the current immigration and work permit landscapes for international entrepreneurs and considered the different scenarios and needs that exist within MIT’s international community. We also examined the academic benefits that would flow from increased student participation in entrepreneurship experiences, and explored broad categories of new opportunities and pathways that may require the Institute to rethink or modify its policies and procedures with respect to visas.

Where We Are Today

Compliance and enforcement actions dominate the current US immigration landscape. The new presidential administration is focused on protecting US workers and reexamining visa programs that grant work permission to foreign nationals. Many commentators anticipate increases in enforcement actions and restrictions on employers, including ongoing site visits, audits, and limits on the ability to issue visas for alien entrepreneurs. Recent directives released by the US Department of Homeland Security and US Department of Labor confirm these new enforcement policies.

For reference, more than 3,800 international students currently are enrolled at MIT. In addition, approximately 1,400 postdoctoral associates and fellows are on appointments in more than 60 Institute DLCs. These individuals are responsible for much of the research being conducted at MIT, and some have entrepreneurial ambitions.

Visa Programs Are Outdated

Current US visa types do not meet contemporary business needs. Employment-based visas are not designed for or suited to self-employment or work at a startup. MIT, other large research institutions, and industry must advocate with the new White House Office of American Innovation and with Congress for new job-creating, economy-expanding visa options. Appropriate options will ensure that the most creative entrepreneurs and most highly educated graduates of US institutions will have the opportunity to form companies that improve manufacturing, spur medical advances, revolutionize transportation, maximize natural resources, create new technologies, and improve the world.

In this environment, the greatest impediment to employment for MIT international entrepreneurs is the lack of a straightforward pathway to creating a company in the US. The lack of a startup visa is an important aspect of this problem. In addition, while H-1B Specialty Worker visas can sometimes be used for entrepreneurs, the cases in which H-1B visas apply are limited. Such cases also are restricted by an annual cap on the number of H-1B Specialty Worker visas that can be granted to foreign nationals at non-academic, for-profit employers. Each year, US Citizenship and Immigration Services (USCIS) receives approximately 200,000 applications for 85,000 available visas. Academia is exempt from this cap, but other employers are not. This greatly limits post-graduation career options for MIT international students and post-MIT-employment options for MIT international postdocs, especially those pursuing careers in startups or entrepreneurship.

Entrepreneurs are exploring creative solutions that enable them to work on their startups while simultaneously engaging in other activities that make them eligible for visas—student, business, or university employment, for example, or graduate degrees with a period of practical training. Unfortunately, these options are merely stop-gap measures rather than long-term solutions.

New Rule Faces Implementation Hurdles

In January 2017, the USCIS published a new parole rule that would allow entrepreneurs to enter the US without non-immigrant visas to engage in startup enterprises. The rule, which was scheduled to go into effect in July 2017, is for business activity of “significant public benefit” and “substantial potential for rapid growth and job creation.” If implemented, qualifying international entrepreneurs would have reasonable opportunities to launch and develop their businesses.

To fully implement this entrepreneur exemption, however, the US Department of Homeland Security (DHS) and US Customs and Border Protection (CBP) would have to train their officers to adjudicate lengthy petitions by foreign nationals waiting in lines at airports or land borders. However, the long-term fate of the program is uncertain.

Federal Regulations Hamper Participation in Startups

DHS immigration regulations specify that enrolled students must maintain their full-time course enrollment throughout their program of study. They cannot fall below a full course of study to pursue concurrent employment while under student visa status. Regulations limit the eligibility and number of hours per week that international students can work on campus while school is in session. Even when DHS regulations permit enrolled international students to participate in off-campus internships or experiences, the authorizations are limited. Curricular Practical Training (CPT) and Optional Practical Training (OPT) under F-1 visa regulations, for example, limit such experiences to those directly related to students’ fields of study. CPT requires that these experiences be part of the established academic program curriculum and count toward the fulfillment of graduation requirements.

J-1 Exchange Visitor (student category) visas also offer limited authorizations for students who maintain full-time course enrollment to pursue off-campus employment in their declared major field of study under the J-1 Academic Training authorization. Such authorizations include internships and other experiential learning opportunities. Because the period of authorized off-campus employment is limited for both the F-1 and J-1 student visas, students must be strategic to make the best use of the limited employment authorization periods available under their visa status.

Any immigration infractions by an enrolled student may jeopardize more than their eligibility for a post-degree work authorization in their field. Such infractions also may affect the student’s ability to complete their program of study. Pursuing a work or employment activity without proper authorization is considered to be the most egregious infraction.

Postdoctoral associates and fellows on J-1 visas can participate in outside activities only under very limited circumstances. The J-1 visa is for academic exchange and training. Postdoctoral associates on MIT-sponsored H-1B visas are authorized for employment solely at MIT. They can work for another entity only if that entity is able to secure a concurrent H-1B visa.

MIT Policies Limit Outside Activity

At present, MIT sponsors employment-based visas only for foreign nationals with certain academic qualifications and levels of degree in full-time academic teaching and research positions. Institute policies bar MIT postdocs from consulting activities. MIT postdocs also are prohibited from working for a faculty member’s company while simultaneously working in that faculty member’s MIT lab.

The Institute uses the F-1 student visa primarily for degree students. The F-1 allows both CPT and OPT authorizations for off-campus academic experiential learning opportunities. The MIT International Students Office website provides details about international student employment authorization requirements.

Application Fees Can Be Prohibitive

In addition to policies and regulations that limit the availability of work visas, the cost to entrepreneurs for application and legal fees is significant—and potentially prohibitive. The short-term competitiveness of MIT startups suffers if they do not have the financial resources to secure employment-based visas for their employees and founders. In the longer term, such ventures are similarly challenged by the cost of permanent and immigrant visas for employees.

More Curricular Practical Training Authorizations Are Needed

OPT authorizations, which are elective for students and can be used to pursue internships or direct experiences, generally are limited to a maximum of 12 months per degree program. Because the 12-month allowance can be used either during or after degree completion, MIT students who wish to participate in startups must save as much OPT time as possible for use after they complete their degrees. Given this limitation, students find CPT authorizations much more useful for engaging in entrepreneurial activity prior to degree completion. 

The challenge with CPT authorizations is that they require students to be enrolled in an internship or experiential learning course in their major program. Such internships and experiential learning courses must be for credit or mandatory for all students in their specific academic programs and must count toward fulfilling the requirements for degrees in those programs. From an educational perspective, these opportunities must enhance learning. Very few academic degree programs at MIT, however, require all students to complete an off-campus internship or experience in order to graduate.

In fact, many Institute academic programs lack any required or for-credit elective internship or experiential learning courses in their curriculum that count toward fulfilling degree requirements. Without such offerings, CPT authorizations are not an option for students in those programs. OPT authorizations are available to those students, but the processing time for approval by DHS averages 90 days. By contrast, CPT authorizations can be obtained within two weeks. The timing for receipt of an internship offer, or the advance planning needed to pursue an off-campus activity, can affect a student’s ability to pursue the experience—especially given the processing times for employment authorizations by the US government.

What We Need

To facilitate entrepreneurial activity and academic enrichment for visa-holding international students and scholars, MIT needs to act on two fronts: incorporate entrepreneurial requirements more broadly into academic programs, and revise visa sponsorship policies to allow international students and scholars to participate in entrepreneurship activities.

Multiply Entrepreneurial Requirements

MIT should increase the number of established degrees and programs that incorporate entrepreneurial activities into graduation requirements. Such requirements—applied equally to US and international students—would enable international students to take advantage of F-1 CPT regulations to form or otherwise participate in startups while still MIT students. Mandatory requirements in PhD programs, for example, could support CPT authorizations where testing or application of thesis topics would benefit thesis completion. Any internal MIT policies restricting student involvement in entrepreneurial activities should be reexamined in light of facilitating student participation and learning.

Create New Degrees, Fellowships, and Programs

In tandem with adding entrepreneurial requirements to existing programs, MIT should explore opportunities to create new degrees with built-in experiential training or venture-related components. A bioengineering and innovation degree, for example, would support CPT authorizations provided the training experience is related directly to the field of study. New innovation-focused fellowship programs could provide funding for PhD students, allow them to focus on thesis completion, and not require teaching or research responsibilities during the fellowship term. The Institute also could create more programs like the Translational Fellows Program (TFP) and its standard guidelines for selection, appointment, supervision, and mentoring. TFP generates professional development opportunities for postdoctoral associates while accelerating the transfer of MIT-research-derived technologies into commercial products. Such programs should be open to international postdocs, students, and MIT alumni.

Establish New Partnerships

MIT should engage with potential industry partners to establish ongoing internship and training placements that align with students’ academic endeavors and support industry’s need for qualified student research initiatives. This effort should include outreach to MIT alumni or Institute partners for funds and other resources that support entrepreneurial thesis projects or the startup activities of current students and recent alumni.

Expand Visa Criteria

MIT may want to consider expanding its eligibility criteria for visa sponsorship of international scholars, including recent graduates, to include an assessment of the entrepreneurial experience and potential of applicants. Simultaneously, the Institute should consider sponsoring international employees below the level of postdoc.

To facilitate concurrent employment at a startup while at MIT, the Institute could modify existing student and scholar policies regarding consulting privileges for nonresident graduate students and postdocs on part-time academic appointments. In addition, postdoc development plans could allow more flexibility for postdocs to engage in entrepreneurial pursuits.

Share Best Practices

Given the lack of straightforward pathways to obtaining work authorizations—along with the uncertain future of US immigration policy—MIT should help potential entrepreneurs explore any and all viable options for obtaining such authorizations. To bring startups up to speed on visa issues and processes, our group recommends that MIT share successful practices—digital services center, templates, procedures—as well as lessons learned with The Engine and its participating companies.

How We Get There from Here

MIT should assemble stakeholders from its senior administration, academic units, Office of the General Counsel, Human Resources, students, research staff, the International Scholars Office, the International Students Office, and admissions/recruitment teams to examine the feasibility of our recommendations. Above all, the Institute must consider the practicality, risks, and academic benefits of these suggestions with a mind to preserving the integrity of MIT’s current visa programs and maintaining MIT’s reputation as a compliant and exemplary employer and visa sponsor.

Promote Innovation/Entrepreneurship-Oriented Degree Requirements

MIT could increase opportunities for international students to engage in innovation/entrepreneurial activities under existing visa guidelines if it establishes a campus-wide goal for internship and experiential learning requirements. The Institute should encourage undergraduate and graduate academic programs to offer elective courses that will count off-campus training experience toward the fulfillment of degree requirements.

When creating new degree programs, departments should make every effort to incorporate entrepreneurship requirements that expose students to the business components of that field of study. A new mechanical engineering and entrepreneurship degree, for example, would include business and management classes alongside engineering classes plus a required off-campus experience. To comply with current visa regulations, the experience must be directly related to the mechanical engineering degree. Even an off-campus position such as a financial analyst must require the application of mechanical engineering capabilities and coursework principles. Such experiences will heighten students’ preparation—both during and after degree completion—for the breadth of components involved in innovation or in launching a startup.

In tandem with the creation of these opportunities, MIT must amend its Graduate Student Non-Resident Status policy to allow enrollment in an internship or experiential learning course during the specific Non-Resident Status term.

Sponsor H-1B Visas for Part-Time Positions

MIT could sponsor part-time teaching and research positions for H-1B visa holders when doing so would align with a DLC’s needs. Part-time employees would be permitted to pursue outside opportunities, including those with startups and other employers that file concurrent H-1B applications for them. Such part-time positions could be funded by research agreements with outside companies. Similarly, summer collaborations with industry to fund research appointments within academic programs (including Undergraduate Research Opportunities Programs [UROPs]) could provide either on- or off-campus opportunities for international students.

Coordinate Support Services

MIT should create a suite of support services tailored to international students working on startups, both during and after degree completion. Services could include mentorship and guidance on business structures, taxes, and human resource development. The Institute could provide referrals to qualified immigration counsel who can represent new enterprises and their employees to USCIS. A knowledge database of resources—including immigration lawyers—could be established to facilitate the referral of internationals to experts.

Over time, this resource could be expanded by implementing a digital services center that facilitates referrals to these experts based on the unique background of each international entrepreneur participating in The Engine. To help with legal fees and business expenses related to work visas and green cards, MIT could facilitate favorable arrangements for low-interest loans with financial entities such as the MIT Federal Credit Union.

Coordinate Advocacy to Congress and Government Agencies

At present, MIT’s administration, faculty, and staff advocate to elected officials and government agencies when legislation and regulatory rulemaking affect our academic mission and immigration and visas concerns. To be feasible, many of our group’s recommendations would require changes in federal government policies. Coordinating advocacy efforts for a startup/entrepreneurship visa with other universities and research institutions must be an integral part of MIT’s support for its student and scholar entrepreneurs.

Open Questions

In the current immigration climate, our group expects changes in the interpretation of laws and regulations, as well as modifications to existing government visa programs and agency procedures. Any of these could affect the availability of visas and the way MIT and The Engine facilitate visa sponsorship. To maintain MIT’s integrity and reputation, and the viability of our current visa programs, the Institute must continue to ask the questions we asked within our working group when we began our research:

• How best can MIT include key stakeholders—senior administration; academic units; undergraduate and graduate students; research, admissions, and recruitment staff; DLCs; Human Resources; the Office of the General Counsel; the International Scholars Office; the International Students Office; and The Engine—in investigating the feasibility, practicality, risks, and benefits of our group’s recommendations?
• Who are MIT’s international entrepreneurs, and what immigration options are open to them?
• How can MIT help its international community participate in The Engine and other startup ventures? What Institute regulations and policies restrict their participation in entrepreneurial and other outside activities?