Life in an Ivory Tower was once a romantic and attainable pursuit for researchers, professors, and scientists who desired to transform their academic and scientific passions into a profession. Increasingly, however, researchers’ and scientists’ everyday lives are trending away from academia, and towards the private sector. World-famous professors and scientists are frequently assuming the CEO role in new rapidly growing organizations. Graduate students, post-docs, and scientists are frequently invited to join the ranks of various new entities that are, increasingly, turning out to be some of the most successful new ventures of our time. Placing researchers and scientists into high-level, executive roles is undoubtedly a natural step for any scientist attempting to commercialize a new technology or research while, simultaneously, finding practical applications for novel ideas and technology in the real world. Massachusetts, which is an epicenter of highly educated biology and medical researchers with entrepreneurial spirit, accordingly touts pharmaceutical, medicinal, and life sciences as some of its top industries.

If you, however, are an immigrant researcher or scientist whose Visa status is tied up with, or more appropriately tied to, your current employer, then this is not your story. The Visas provided to immigrant researchers and scientists often do not allow an individual to work outside of their employment; the Visa rules do not provide individuals with the freedom to even moonlight for their own ventures. Innovative ideas of researchers and scientists, ideas that often originate at, yet are completely distinct from, an employee’s place of employment, more often than not belong to the employee’s employer in accordance with an Intellectual Property Assignment Agreement or Confidentiality Agreement. While individuals may not mind if their employer actually owns their distinct and novel invention, so long as they are provided with a certain percentage of royalties in connection with future licensing and sales, such individuals often find that their employer will simply act as a passive-entrepreneur. This passive-entrepreneurial role, which is assumed by the employer, unfortunately, is antithetical to how the researcher or scientist himself would have acted if provided with the freedom that is necessary to market and sell their idea.

Therefore, many immigrant researchers and scientists, those with serious intentions to launch a startup entity, will often choose to obtain a green card through either the EB-1 or EB-2 immigration process. EB-1 and EB-2 immigration Visas, while much more flexible in terms of secondary employment, unfortunately require immigrants to endure a prolonged and protracted immigration process. This lengthy process takes not only time, but resources and energy; once this process is complete, many researchers often find that they have run out of both the steam and energy required to launch a business (and they simply end up with a salaried position, which, of course, still pays slightly better than their old position). The flawed prohibitions against secondary employment, and the lengthy time-consuming immigration processes, are plainly against the American ideal; they discourage, and ultimately prevent, significant potential public benefits that would accrue to the citizens of the states. Fortunately, the Obama administration has recognized the pitfalls and hindrances the currents rules pose on potential immigrants, and the American public, and, accordingly, the Department of Homeland Security has released proposed rules surrounding a new entrepreneurial immigration program: the International Entrepreneur Rule(s).  

Immigrant researchers, scientists, and professors, those with ideas, inventions, and technologies that are able to create jobs, advance the economy, and enhance innovation, will soon be eligible to apply for the parole to stay in the United States to develop their businesses. They will have to first, however, prove that they: (i) formed their business within the three years immediately preceding the filing of the parole application; (ii) own at least 15% of the business at the time of the application for parole; (iii) maintain at least a 10% level of ownership through the duration of parole; and (iv) demonstrate the potential for rapid and substantial business growth and job creation (which must be evidenced by the receipt of a significant investment of capital (at least $345,000.00) from certain U.S. private investors with established records of successful investments, or by receiving significant grants (at least $100,000.00) from U.S. governmental entities, or by partially satisfying these criteria and showing other compelling evidence that the business has potential for rapid growth and job creation)

Researchers, professors, and scientists with an entrepreneurial spirit have been long awaiting a so-called entrepreneur Visa since the announcement by the Obama administration of Executive Actions in November 2014. Even though this rule does not amount to a promised Visa status, and is somewhat risky to take, it is clearly a worthwhile opportunity for any immigrant entrepreneur to take. After all, entrepreneurial achievements and risk taking go hand in hand. ​

In 1935 the Austrian government sought to impose Austrian income tax on several employees of the United States whom were working in Austria. The U.S., in an attempt to appease the Austrian government and secure some sort of reciprocal agreement, amended §116 of the Revenue Act of 1934. This amendment, now codified in the Internal Revenue Code (“IRC”) in § 893, provides an important U.S. income tax exemption to certain employees of a foreign government whom are working in the U.S.

IRC § 893 (“U.S. Income Tax Exemption”) gives a U.S. income tax exemption to individuals who are employees of a foreign government, working in the United States, and who: 

1. Are not citizens of the United States;
   
   
2. Perform similar services of a character that employees of the U.S. government in foreign countries would do; and
   
   
3. Are employed by a foreign government that grants an equivalent exemption
   

The usefulness of this exemption is relatively straightforward for most individuals working in the U.S. on behalf of their governments. However, for a few individuals, this exemption is absurd. Why would a tax exemption ever be absurd? Well, the individuals who find it absurd are most likely looking at it in conjunction with the Immigration and Nationality Act (“INA”).

Section 247(a) of the INA requires the Attorney General to adjust the immigration status of an “immigrant” to a “nonimmigrant” if, at any point in time, the immigrant acquires an occupational status entitling him or herself to a non-immigrant status. Such occupational statuses are those which pertain to A (Government Officials), E (Treaty Traders), or G (International Organization Representatives) visas.

The impact of changing someone from an “immigrant” to a “nonimmigrant” is substantial since only immigrants may become permanent residents and obtain permanent residency. Permanent residency is a key requirement for naturalization. The question then became: how can The U.S. government give these individuals some leeway to work around this automatic change in immigration status? The U.S. government knew that many A, E, and G visa holders may want to eventually become U.S. citizens after spending time in the States. Section 247(b) of the INA, consequently, was enacted to provide these individuals some leeway.

Section 247(b) of the INA opens up an opportunity for an individual affected by § 247(a) to file a waiver “of all rights, privileges, exemptions, and immunities...” that would accrue to the individual vis-a-vis their occupational status. By submitting this waiver, the Attorney General does not adjust the individual's status as an “immigrant” to a “nonimmigrant.” A resident employee of a foreign government who is, or becomes, eligible for an A, E, or G visa may file the §247(b) waiver in order to preserve their status as an immigrant and remain eligible for U.S. naturalization – if such individual desires, or believes that one day they may desire, to become a U.S. citizen.

The effect of such waiver, however, results in this individual losing their U.S. Income Tax Exemption as such exemption arises from their occupational status as a non-U.S. citizen employee and the individual, by signing the waiver, has waived all exemptions accruing from their occupational status. Fortunately, there are ways around the loss of the coveted U.S. Income Tax Exemption – mainly U.S.-Foreign government treaties. Many immigrants, however, who are unsure whether they actually want to become a naturalized U.S. citizen in the future find themselves in a tricky situation: to sign the waiver (and possibly lose their U.S. income tax exemption) or not to sign the waiver (and possibly lose their ability to become a U.S. citizen in the future).