As US President Donald Trump’s border-barring policies raise fears in the global tech community that prospects of work in Silicon Valley may be hit, Israeli firms have in general not been affected but there is concern locally that curbs may be coming.
As a result, relocation candidates have sped up their applications amid a flurry of questions to immigration lawyers and uncertainty in the local industry regarding long-term business plans.
“The impact at the moment is mostly psychological, as Trump’s administration is injecting uncertainty into the visa application process,” said Liam Schwartz, principal at Liam Schwartz & Associates, which specializes in US and Israeli corporate immigration. “There have been a flood of incoming visa petitions and startups and entrepreneurs are in a hurry to get a visa because they fear a crackdown on the availability of visas. People sense there are changes coming down the road quickly.”
US Secretary of State Rex Tillerson has instructed US diplomatic missions to identify populations that need increased visa vetting and has given instructions to toughen screening for visa applicants in those groups, Reuters reported on March 23. The instructions give some insight into how the US government is putting in place the policies of Trump, who has called for “extreme vetting” of foreigners entering the United States, Reuters said.
The guidelines follow Trump’s March 6 revised executive order barring visitors from six Muslim-majority countries and all refugees, as well as a simultaneous memorandum mandating enhanced visa screening. Also in March, the Trump administration decided to halt expedited processing of H-1B visas, used to bring in skilled foreign workers for the technology sector or health care in the US, CNN Money reported.
“The big picture is that Trump is building up a puzzle for a new policy, and stone after stone you see more of the same: he is trying to make it harder for US employers to employ foreign workers,” said Tsvi Kan-Tor, founding partner at Kan-Tor & Acco law firm in Ramat Gan, which exclusively deals in relocation.
Israelis are generally not eligible for the H-1B visas, which allow US companies to offer professional-level employment to foreign experts holding relevant academic degrees. The H-1B visa is subject to an annual worldwide quota. When the quota first began, it stood at 200,000 approvals per year, Schwartz said.
“Because this visa is so politicized, the quota has since been reduced to its current level of only 65,000 per year, a number which doesn’t begin to meet worldwide demand,” he said.
Thus, because of the quota, and the unlikelihood of getting an H-1B visa, Israelis generally apply for the L-1 visa. This visa allows a company to place key workers in managerial or tech positions for three years, with an option to extend the period. But these employees have to be working at the startup or company for at least a year before applying for the visa, Schwartz explained.
Schwartz’s core clientele is Israeli startups and high-tech companies from a range of industries, including cybertech, life sciences and biotech.
“The Trump administration has indicated that it will crack down on the L1 tech knowledge workers — as they believe there are enough people in the US with the knowledge needed,” said Schwartz. That has not happened yet, but “it appears it is going to become increasingly difficult to get these kinds of visas. Even before Trump, the environment had become more hostile, but now since January the visa adjudications seem to have been become even more hostile. We are definitely seeing hostility in the adjudicatory environment.”
In addition, the green card process — the immigration process of becoming a permanent resident of the US — is also “grinding slowly,” Schwartz said. “I represent green card applications for managers and executives, and they are all pressured to finish the process as soon as possible. Since January there has been a dramatic uptick in processing time for green cards. It was six months, and now it is already over a year. People are very concerned.”
There is no impact on Israelis or the L-1 visa application process yet, said Kan-Tor. But “there is a lot of noise, a zillion questions. People are asking ‘what do you think will happen.'”
Kan-Tor is also the chairman of the visa committee at the Israel America Chamber of Commerce.
Things are not likely to get easier, he said.
“There are a lot more changes to come, down the line,” Kan-Tor said. “My advice is, if people think they may need a work visa for the US in the future, then the sooner one applies the better. We are definitely not expecting good news.”
There are some 50,000 Israelis who live in the Silicon Valley area, according to Ogen, a relocation firm that helps Israelis move to the US. Israel’s inter-ministerial Brain Gain program, which seeks to repatriate Israelis with university degrees who live abroad, believes there are some 27,856 Israeli with academic degrees who have been living outside the country for a period of three or more years, 75 percent of them in the US. This compares with 24,503 in 2012, the figures show, based on data from Israel’s Central Bureau of Statistics.
“The lack of knowledge regarding the depth of the implementation of the intentions of the new US administration is leaving the Israeli industry with a feeling of discomfort with regard to long-term business planning,” said Hagit Korine, a partner of EY (a global professional services firm formerly known as Ernst & Young) in Israel and in charge of the global mobility division, which offers customers relocation services.
As the so-called Startup Nation churns out some 1,000 new startups annually, it also creates a new generation of pioneers who set off to conquer foreign markets, armed with their new technologies. Generally, after a startup has been founded, it takes a year to a year and a half before one of the founding partners moves abroad to be closer to a potential market, Korine said.
In addition, international companies, including Google, Apple, Deutsche Telecom and Bosch, have set up research and development centers in Israel, with 278 multinationals operating a total of 327 R&D centers around the country today, compared with about 250 such centers four years ago, data compiled by Tel Aviv’s IVC Research Center shows. This means that employees are often jumping onto planes to attend meetings with colleagues, potential clients and investors or work on new developments in joint teams.
Relocation to the US is “very important” for Israeli engineers because it helps them learn the work methods of the major technology companies that employ them, and once they return to Israel they can bring what they have learned back home, said Erez Tzur, co-chair of IATI, Israel Advanced Technology Industries, an umbrella organization of tech players in Israel and a lobbyist for the industry. In addition, once Israelis achieve positions in US or multinational firms, they often manage to divert projects to research and development centers in Israel, which boosts the local tech scene.
Micha Breakstone, a co-founder and head of R&D at Chorus.ai, a San Francisco and Tel Aviv-based startup that uses artificial intelligence to analyze sales conversation and learn how sales organizations can increase the number of deals, said the company has taken some steps to make sure its workers won’t be affected by any eventual changes to US visa policies.
“Because we are a startup of only a few dozen people, we don’t yet have employees who have relocated to the US,” Breakstone said. “But we do have employees who travel to the States on a regular basis, so we are making sure all of them will receive their necessary visitor visas as soon as possible.”
“In addition, our employees in the US who are still waiting for their green cards have been told by their immigration lawyers that they should by no means leave the country, even for a short while. These concerns don’t allow us to act in an optimal way, but there is no real damage. I believe we would have had a few more trips to and from the US had the atmosphere been a bit different,” he said.
Eyal Waldman, the founder and chief executive officer of Mellanox Technologies Ltd., a Nasdaq-listed $2.5 billion maker of chip-based products used to transfer and store data, set up his firm in Sunnyvale in 1999. The company is headquartered there and in Yokne’am Illlit, in Israel, and employs workers both in the US and in Israel.
Mellanox uses mainly L-1 visas for workers in the US, Waldman said, but it is feeling no impact at the moment from a change in the visa policies. “We use the H-1B visas for our workers from China and India, but at the moment we are still managing to employ the people we need,” Waldman said. He doesn’t expect the visa policy changes to impact Israel or the global high tech industry, he said. “I believe the US will remain an economy oriented market and the administration will do what is in the best interests of the US economy,” making sure the high-tech industry will have access to the highly talented people it needs, he said.
Israel is hoping to soon become eligible for the E2, or so-called investment visas, which allow investors and corporations who invest a minimum of $100,000 in a new business enterprise in the US to send key people to work there.
In January this year the Israeli government approved necessary changes to legislation and the regulatory and procedural requirements requested by the US authorities to achieve reciprocity for this type of visa, Kan-Tor said.
“It is now in the hands of Israeli officials who have to finish the revisions and procedures and take them for review to the US officials to show they have done everything as agreed” to allow Israelis to become eligiable to apply for these visas, said Kan-Tor. The next step will be to get US approval and set a date to start filing for the visas. “My estimation is that that will happen in the last quarter of the year,” Kan-Tor said.
The E2 visa, if allowed, will be better than other visas as it won’t be as easily subject to the whims of the presidential administration, Kan-Tor said; since it is a reciprocal agreement, changes in policy would also affect US workers who want to relocate to Israel. “Governments don’t generally change their attitude on these kinds of visas without negotiations. It is a two-way street,” Kan-Tor said. “I believe the E2 visa is the best solution for Israelis in this environment.”
In addition, the US Consulate in Israel would screen these visa applications and not the US immigration authorities, he said, which could ease the process.
An official of the US Embassy in Tel Aviv said by email on March 15 that there are no updates regarding the L Visas, and Israel “is still in the process of making the necessary changes” for the E2 visa.
Ogen is organizing a conference for people who are interested in relocating to the US in Herzliya on March 27. Schwartz, the immigration lawyer, will be speaking at the conference, telling attendees about the direct and indirect implications of Trump’s visa policies.
“I am sure there will be many questions on this subject,” he said.