Microsoft Corp. said on Thursday it will open a software development center in Vancouver, giving it a place to employ skilled workers snagged by U.S. immigration quotas.

It may signal the start of a new hiring trend, with other U.S. high-tech firms following in Microsoft's footsteps to Canada, where lawyers say it is easier for foreign nationals to obtain work credentials.

U.S. businesses want Congress to lift quotas on the number of visas the government issues to skilled professionals such as the software engineers that Microsoft employs. But as recently as last week lawmakers rejected legislation that would have addressed their concerns. Canada doesn't impose quotas on the number of visas it issues each year.

Microsoft said it plans to open the Vancouver facility by the end of the year. It will initially have about 200 workers, and employ about 900 within a couple years.

Businesses, particularly technology firms, say they need to recruit foreign nationals, many of whom have received their graduate degrees in the United States, to compensate for a shortage of qualified programmers, engineers and scientists.

Evan Green, a Toronto immigration attorney who helps businesses obtain visas for employees, said that other U.S. companies could follow Microsoft's lead.

Lots of companies are looking at (expanding in Canada) because of their frustration with getting U.S. visas, Green said.

But supporters of the U.S. cap say it prevents firms from using temporary foreign workers to displace higher paid American employees.

Microsoft said in a statement that the Vancouver center will allow the company to continue to recruit and retain highly skilled people affected by the immigration issues in the United States.

But company spokesman Lou Gellos said Microsoft's frustration with the U.S. government's visa policy wasn't the only reason for the expansion in Canada.

It is part of a larger program to diversify software development outside of Microsoft headquarters in Redmond, Washington, Gellos said.

The company has operations in North Carolina, Ireland, Denmark and Israel, and has already announced plans for sites in Boston and Bellevue, Washington.

We would be opening this center in Vancouver even if this visa situation didn't exist, Gellos said.

Still, U.S. interest in placing workers in Canada has risen since the beginning of April, when Washington announced there would be a severe visa shortage this year.

The United States grants about 85,000 H-1B visas annually to workers with skills in specialized fields. A record 150,000, requests, or nearly double the annual quota, were filed on just the first day applications were accepted for this year's allotment.

Microsoft and other companies have been saying for a long time, 'If you make it so difficult for U.S. companies to bring in talented foreign national that they need, companies are going to fill those positions abroad,' said Ted Ruthizer, who runs the business immigration practice for the U.S. law firm Kramer Levin Naftalis and Frankel.

This is just the fulfillment of this promise, Ruthizer said.

Green said Vancouver, Toronto and Montreal are poised to get the most jobs as a result of the U.S. visa restrictions.

Vancouver, Canada's third-largest city, is only about three hours' drive from Microsoft's headquarters, and is already a popular destination for immigrants.

Efforts to ease restrictions on the U.S. work visa system were dealt a blow last week when the Senate killed President George W. Bush's planned overhaul of the country's immigration policy.

The bill's supporters say Congress is unlikely to revisit the issue until after the November 2008 election.

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