USCIS on Use of H1B and NIW by Entrepreneurs: Part 2

In Part I (26.Aug.2011) of this NewsBrief, MurthyDotCom and MurthyBulletin readers were informed of August 2, 2011 policy announcements from the U.S. Citizenship and Immigration Services (USCIS), intended to facilitate immigration benefits for foreign national entrepreneurs. That article discussed the potential use of the H1B category for entrepreneurs. The following sets out the USCIS policy and potential options for permanent residence under the employment-based, second preference (EB2) category – either with labor certification or under the National Interest Waiver (NIW) option for entrepreneurs. As was explained in Part 1, there have been no changes in the law. The USCIS policy announcements are intended to reflect a policy favorable to the use of existing immigration laws and regulations to benefit both the entrepreneur and the U.S. economy.

USCIS Issues FAQs on the EB2 Options for Entrepreneurs

The USCIS issued an updated set of frequently asked questions (FAQs) on August 2, 2011 pertaining to the ability of entrepreneurs to file “green card” (permanent resident) cases in the EB2 category. An entrepreneur potentially may file as a professional holding an advanced degree or as an individual of exceptional ability in the sciences, arts, or business. Individuals who satisfy either criterion may be able to eliminate the need for an employer-sponsored PERM labor certification (LC) if they can qualify for the EB2 under the National Interest Waiver (NIW) category.

EB2 for Members of the Professions Holding Advanced Degrees

The EB2 category includes members of the professions holding advanced degrees. This category potentially could be used by an entrepreneur, provided that all requirements are met. The requirements are: (1) the entrepreneur will be working for a U.S. employer who files a petition on his/her behalf; (2) the underlying position requires, at a minimum, a professional holding an advanced degree or the equivalent; (3) the petitioning employer has obtained an LC from the U.S. Department of Labor (DOL) on behalf of the entrepreneur; and (4) the entrepreneur meets or exceeds all the minimum requirements listed on the LC.

LC Difficult for Owners of Businesses

There is a significant issue in the EB2 advanced-degree category, due to the requirement to obtain a PERM LC. Labor certifications require recruitment of U.S. workers that is not influenced by the sponsored foreign national. The PERM application (Form 9089) asks:

“Is the employer a closely held corporation, partnership, or sole proprietorship in which the alien has an ownership interest, or is there a familial relationship between the owners, stockholders, partners, corporate officers, incorporators, and the alien?”

If the answer to this is “yes,” the case is virtually certain to receive a DOL audit, and the employer would have to demonstrate to the satisfaction of the DOL that the hiring decisions were made in a genuinely independent manner. If the foreign national is a company founder, or there is any significant ownership interest by the sponsored foreign national (or family members), the DOL is likely to deny the PERM case.

As explained below, an individual with an advanced degree potentially may eliminate the need for the PERM LC if s/he can qualify for a National Interest Waiver (NIW).

EB2 for Exceptional Ability in the Sciences, Arts, or Business

The USCIS questions and answers (Q&A) on the subject also identify exceptional ability in the sciences, arts, or business, as a potential basis for qualification by an entrepreneur. An entrepreneur could utilize the EB2 category as a person of exceptional ability if: (1) the entrepreneur will be working for a U.S. employer who files a petition on the entrepreneur’s behalf; (2) the entrepreneur will be working in the sciences, arts, or business; (3) the entrepreneur has exceptional ability in the sciences, arts, or business; (4) the entrepreneur will substantially benefit prospectively the national economy, cultural or educational interests, or welfare of the United States; (5) the petitioning employer has received a labor certification from the DOL; and (6) the entrepreneur meets or exceeds all the job requirements listed on the labor certification.

Since an LC is required in this category, the problems identified above with regard to the advanced-degree options reappear under this option. However, as with the advanced-degree option, foreign nationals interested in owning and running their own businesses may be able to turn to the NIW to waive the requirement of the PERM LC and pursue their respective cases to obtain “green card” approvals under the NIW category.

EB2 for “Exceptional Ability” – Focus on Individual’s Qualifications

If the situation potentially meets DOL scrutiny with respect to the foreign national’s influence over recruitment and hiring decisions (or the case will qualify for an NIW), then the consideration of the EB2 Exceptional Ability option shifts to the individual’s qualifications. This category requires proof of exceptional ability in the sciences, arts, or business by meeting three out of a list of six criteria.

The criteria for “exceptional ability” are: (1) a degree, diploma, certificate, or similar award from a college, university, or other institution of learning related to the area of exceptional ability; (2) letter/s from current and/or former employer/s establishing that the beneficiary possesses at least ten years of full-time experience in the occupation for which s/he is being sought; (3) a license to practice the profession or certification for a particular profession or occupation; (4) evidence that the beneficiary has commanded a salary, or other remuneration, which demonstrates exceptional ability; (5) membership in professional associations; or (6) recognition for achievements and significant contributions to the industry or field by peers, government entities, professional or business organizations.

In the event that the listed standards do not readily apply to the entrepreneur’s area of expertise, other appropriate evidence may be utilized. It would, however, be necessary to explain why the standard proof does not readily apply to a particular occupation.

Must Establish Substantial Prospective Benefit to the U.S.

The exceptional ability category requirements, listed above, necessitate establishing that the entrepreneur will substantially benefit prospectively the national economy, cultural or educational interests, or welfare of the United States. It must be emphasized here that this is ONLY ONE of the requirements; meeting this requirement alone is not sufficient to qualify.

The USCIS gives several examples of substantial benefit to the United States, including the opening of tutoring centers as a benefit to U.S. educational interests. The entrepreneur potentially could demonstrate that U.S. welfare would be substantially better off with the enterprise being located in the United States.

Smaller businesses may have difficulty showing the substantial nature of the benefit. It is necessary to fully analyze the business interests of the entrepreneur, including any history of successful business ventures. The products and services of the business, expenditures and investments, growth and sustainability, and other relevant factors would all have to be carefully considered in the effort to demonstrate the substantial prospective benefit of the particular entrepreneur.

NIW Under the EB2 Category

The USCIS identified the NIW as a potential option for entrepreneurs. This category does not require a PERM LC or a specific job offer. Thus, one of the major hurdles in the two categories covered above is eliminated with this option. While the NIW presents its own set of challenges, this ultimately may be the most viable option for a successful entrepreneur.

As explained, the NIW category first requires that the applicant demonstrates his/her qualification as an EB2 candidate, either based on being an advanced-degree professional or as an individual of exceptional ability. If the applicant can meet either of these requirements, s/he can try to establish eligibility under the NIW category.

Three-Pronged Test Requirement for NIW Candidates

The normal three-pronged test for NIW candidates requires that the applicant (1) must seek employment in an area that has substantial intrinsic merit; (2) must demonstrate that the proposed benefit will be national in scope; and (3) must demonstrate that it would be contrary to the national interest to potentially deprive the prospective employer of the services of the waiver applicant by making available to U.S. workers the position sought by the NIW applicant.

As stated, no actual job offer or employment offer is required. In the case of an entrepreneur, it is necessary to show that her/his presence in the United States would serve the U.S. national interest to a substantially greater degree than would an available U.S. worker having the same minimum qualifications.

First Prong for NIW: Substantial Intrinsic Merit

The substantial intrinsic merit requirement is, essentially, the need to show that the applicant’s contributions are concrete, and not just theoretical. The USCIS Q&A instructs entrepreneurs to focus on the proposed employment itself, rather than the entrepreneur’s qualifications. That is, it is important to show what the applicant is doing or will do as an entrepreneur.

Second Prong for NIW: Benefit is National in Scope

The benefit derived from the applicant’s presence in the United States must be national in scope. Meeting this requirement may be challenging for those entrepreneurs with more locally-based businesses. The USCIS has suggested, however, that entrepreneurs can meet the second prong by demonstrating that the business will create related jobs in the rest of the United States or that jobs created locally have a positive national impact.

We at the Murthy Law Firm believe there is room for thinking creatively with respect to this prong. Many businesses are local, but expand their reach via the internet. Businesses may have customers or suppliers throughout the United States. A product or service provided by an entrepreneur’s business may help other businesses or organizations operate more efficiently or profitably. The requirement is that the benefit be national in scope, not that the business operation itself have multiple offices throughout the United States.

Third Prong for NIW: Overcome LC Requirement

The third prong requires that the individual seeking the NIW provides a benefit to the United States that is significant enough to outweigh the U.S. interest in making the job available to a citizen (and requiring a PERM LC to establish that U.S. workers are not available). The USCIS guidance suggests that the applicant focuses on the job creation aspect of the entrepreneur’s business enterprise. That is, establish that s/he is creating jobs for multiple U.S. workers, rather than taking a single job opportunity from one U.S. worker. This aspect of the case requires an understanding of the entrepreneur’s history and the details of the business’ operations, and may require presenting novel arguments to USCIS in support of the case.


Many entrepreneurs became excited by the USCIS announcement in early August 2011. It is important to understand the potential hurdles that may limit eligibility rather than open the door for all entrepreneurs. For some, however, the USCIS announcement could provide an avenue to permanent residence via entrepreneurship, as discussed in this two-part NewsBrief. We at the Murthy Law Firm have received many numerous inquiries, and are happy to review the possibilities with those who would like to pursue entrepreneurial options.

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Disclaimer: The information provided here is of a general nature and may not apply to any specific or particular circumstance. It is not to be construed as legal advice nor presumed indefinitely up to date.