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Facts about immigrant business owners in the U.S.

by | Nov 17, 2023 | Immigration & Global Mobility Practice

The U.S. Small Business Administration Office of Advocacy has shared surprising insight into the exceptional entrepreneurial spirit of immigrants who settle in the U.S. According to data from 2018 and 2019, the national percentage of immigrant business owners is higher than the national percentage of immigrant workers.

This supports the growing body of evidence that immigrants are responsible for a net gain in U.S. job opportunities in small, medium and large businesses, rather than the outdated theory that immigrants take jobs away from native-born Americans.

By the numbers

The percentage of immigrant-owned businesses with employees was 18%, while the percentage of immigrant-owned businesses without employees was a whopping 22.82%. That’s 740,768 and 6,518,000 immigrant-owned U.S. businesses respectively. The same numbers show that immigrants own businesses at a higher rate per capita than people born in the United States.

The Census Bureau’s annual business survey, a voluntary but reasonably representative source, provided these statistics.

Industries with high immigrant business ownership

While immigrants own businesses across all sectors, they seem particularly drawn to certain industries, like accommodations, food, retail, healthcare, transportation and warehousing. Another surprising statistic shows that immigrants own 36.8% of all accommodation and food-related businesses in the U.S.

Notably, Pfizer, BioNTech and Moderna, three of the top manufacturers of covid vaccines, were all founded or cofounded by immigrants.

Why are immigrants more likely to start their own business?

There are multiple theories pointing to why so many immigrants undertake the risk of opening a business. While experts don’t consider any of these theories as definitive, the following are two of the more popular explanations.

The first involves the limited job opportunities available to immigrants. When they encounter difficulties in finding work, many immigrants simply choose to create their own jobs. The risks associated with running a business likely seem like better odds than the struggle to find consistent work that pays a living wage.

The second explanation relates to immigrants that first arrived in the U.S. as students. Once they complete their education, they are more likely to take the plunge into start-ups, particularly in tech fields.

Furthermore, it’s possible that voluntary immigrants simply have a higher risk tolerance. Relocating to a foreign land, where language barriers, unemployment, underemployment, discrimination and other negative social factors await is a massive personal risk. Once they’ve overcome all those challenges, the risk associated with opening a business must seem comparatively quaint.