The US government is considering a major change to its immigration regime which would allow startup entrepreneurs from all over the world to live in America for up to five years to try and build their business.
With the Coalition government in Australia trying to stimulate activity in the startup and technology sectors, and pushing the importance of business innovation to help drive future economic growth, the rule changes have the potential to attract ambitious entrepreneurs to give the US a further edge in the war for talent.
The US already has more venture capital funding available and much larger business and consumer markets in which to test new products.
The risk of a so-called “brain drain” is already a significant concern for Australia’s tech sector. Last year, the CEO of online creative work marketplace Freelancer.com, Matt Barrie, said that “anyone mildly interesting with a brain is fleeing the city to go overseas”.
Mike Cannon-Brookes, co-founder of Australia’s best-known technology success Atlassian, has also bemoaned how the US tech sector has been pilfering Australia’s ranks of technology talent.
Australia also faces other headwinds in attracting and retaining talent. The currency has drifted lower over the past three years and many economists expect it to depreciate further against the US dollar, and while this makes tech exports more competitive, it reduces the comparative earnings for startup founders or engineers who decide to move to Australia to join companies here. And it is increasingly in competition with other regional tech hubs like Auckland and Singapore.
The proposed changes, announced on Friday in the US, would allow startup executives – not just founders – to move to America if they meet some basic criteria, including having a 15% stake in their company and having raised $US345,000 from qualified US investors.
Authorities are positioning as a driver of job creation and economic growth. The proposed rule is an extension for US Citizenship and Immigration Services, so it would not need to be passed by Congress.
“America’s economy has long benefitted from the contributions of immigrant entrepreneurs, from Main Street to Silicon Valley,” US Citizenship and Immigration Services Director León Rodríguez said. “This proposed rule, when finalised, will help our economy grow by expanding immigration options for foreign entrepreneurs who meet certain criteria for creating jobs, attracting investment and generating revenue in the U.S.”
Applications would be reviewed on a case-by-case basis but the DHS said it would apply to candidates:
- Who have a significant ownership interest in the startup (at least 15 percent) and have an active and central role to its operations;
- Whose startup was formed in the United States within the past three years; and
- Whose startup has substantial and demonstrated potential for rapid business growth and job creation, as evidenced by:
- – Receiving significant investment of capital (at least $345,000) from certain qualified U.S. investors with established records of successful investments;
– Receiving significant awards or grants (at least $100,000) from certain federal, state or local government entities; or
– Partially satisfying one or both of the above criteria in addition to other reliable and compelling evidence of the startup entity’s substantial potential for rapid growth and job creation.
For many Australian entrepreneurs and startup leaders, these would not be difficult criteria to meet.
It highlights the importance of making Australia an attractive place to build and launch a startup.
Prime minister Malcolm Turnbull again pressed the importance of innovation in laying the foundations for Australian economic growth in his first major policy speech following the July 2 federal election.
Innovation minister Greg Hunt has also been stressing that the need for innovation to apply not just to tech startups but across all small and medium-sized businesses, as well as large corporates.
Business Insider Australia has contacted the USCIS for further comment.