Trump Booted Foreign Startup Founders. Other Countries Embraced Them

(Bloomberg Businessweek) -- A master’s degree from Yale and angel investments in his startup weren’t enough to protect Mezyad AlMasoud from Donald Trump. A little more than a year ago, Trump moved to kill a nascent visa program meant specifically for company founders with capital in hand, such as AlMasoud. The Kuwaiti’s immigration lawyer called his Wall Street office to tell him that without the startup visa, which could have been granted under a plan known as the International Entrepreneur Rule, he had two weeks to leave the U.S. That afternoon, AlMasoud spent hours sitting by the East River, looking out at the Brooklyn Bridge. The thought running through his mind: “How do I tell my 5-year-old daughter I failed?”

Trump Booted Foreign Startup Founders. Other Countries Embraced Them

As it turned out, he didn’t have to. Flair Inc., his financial technology startup, incorporated in June and is starting to hire engineers who can develop its money-management web services for pro athletes. It’s just not in the U.S. Flair is hiring in Vancouver, where AlMasoud was one of the first people accepted to a startup visa program that looks a lot like the fast-track Obama plan Trump blew up. In the past 18 months, similar programs with a range of perks have sprung up in at least a dozen countries, including the U.K., China, Japan, Israel, Germany, Estonia, Australia, and New Zealand. As with many of his peers, the first choice was always America, says AlMasoud, whose startup is among 130 created by people admitted to Canada’s new visa program since February.

Immigrant founders and co-founders have a strong track record in Silicon Valley (see Google, Tesla, EBay, Stripe), as do the children of immigrants (Apple, Oracle, Amazon.com). But the Valley’s fabled Sand Hill Road is no longer the center of the venture capital world, and as the Trump administration continues to increase restrictions on most forms of immigration, other locales are even more eager than usual to frame themselves as the next great innovation hub. Startups are doing a lot more venue-shopping than they used to, says Merilin Lukk, who runs Estonia’s recruiting program and has brought at least 160 founders to the country since last year, creating about 440 jobs.

Countries have offered all kinds of perks to differentiate themselves. A new program in Israel throws in $20,000 relocation bonuses, a local accountant, Hebrew classes, yearly flights home, and paid cellphones. Other offers include low-interest loans, six-day visa processing, and, most important, the equivalent of a green card. “The fight over tech talent is not something that is coming in the future. It’s happening right now,” says Kate Mitchell, the founder of Scale Venture Partners in Foster City, Calif. “And we are losing.”

That’s a bit of an overstatement for the time being, but the U.S. certainly isn’t trying to match those offers. The Trump administration derailed the legacy Obama program a week before its planned rollout last year, and although a lawsuit by the National Venture Capital Association managed to force the feds to eyeball an initial handful of applications, a spokesman for U.S. Citizenship and Immigration Services says the program “does not adequately protect U.S. investors and U.S. workers” and that the agency intends to officially scrap the program as soon as it has finished reviewing public comments on the matter.

The move is part of a broader set of moves to restrict visa immigration, including the H-1B visas that have historically gone overwhelmingly to tech workers. Critics of the program, including labor advocates as well as Trump-style nationalists, say the visas have too often been abused by outsourcers and companies that simply want to pay workers less. There may be some truth to that: More than 50 percent of the country’s working science and engineering Ph.D.s are foreign-born. But another way to look at those numbers is that America needs immigrants.

Canada is one of many countries that seem less conflicted, says AlMasoud, who’s enjoying his weekend hikes in the Vancouver area without looking over his shoulder. The Canadian immigration agency says it has approved 200 applicants for permanent residency since February, and AlMasoud is hoping he’ll be on that list soon, too. For now, he’s trying to get Flair to a point where he can apply for approval from American financial regulators and start showing it off publicly. Only occasionally, as when he reminisces about NBA games or his bygone ’67 Pontiac GTO, does he grow wistful about the opportunities he left behind. “It had always been my dream to start a business in the U.S.,” he says. “Because of what Trump has done, now I have to hire Canadians.”

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