``I wanted to find out how to do business here,'' Mr. Tuan says.

He passed the test. Thirteen years later, Mr. Tuan heads his fourth company, AboveNet Communications Inc. of San Jose, California, which helps Internet service providers and large businesses handle Web traffic. AboveNet went public in December, and its shares have more than quadrupled since then, giving the company a stock-market valuation of more than $1 billion. On Wednesday, Mr. Tuan agreed to sell the company for $1.5 billion in stock to Metromedia Fiber Network Inc.

Taiwan-born Mr. Tuan is just one of the immigrants who have transformed Silicon Valley over the past two decades. Long known for their engineering expertise, these immigrants also are among the region's most active entrepreneurs, according to a newstudy.

Ethnic Chinese and Indian immigrants run nearly 25 per cent of the high-tech companies started in the Valley since 1980, according to the study by Anna Lee Saxenian, a professor of regional development at the University of California, Berkeley. The 2,775 immigrant-run companies had total sales of $16.8 billion and more than 58,000 employees last year. Ms. Saxenian says those figures likely understate the contributions of immigrant entrepreneurs, because many companies they started are run by native-born Americans.

But there's evidence that the traditional pattern is changing. Chinese and Indian immigrants run 29 per cent of the companies founded between 1995 and 1998, a figure Ms. Saxenian thinks is a more accurate reflection of their influence.

``The big change in the 1990s is the recognition of not just the technical, but the managerial capabilities of immigrants,'' says Ms. Saxenian, author of ``Regional Advantage,'' a well-regarded book about the growth of Silicon Valley. Her new study willbe published soon by the Public Policy Institute of California, a non-partisan think tank based in San Francisco.

Sabeer Bhatia is a case in point. No one tried to move him aside when he founded free e-mail provider Hotmail Corp. in 1995 with a colleague from a failed start-up. Funding wasn't easy: Mr. Bhatia and Jack Smith were rejected by 20 venture-capital firms before obtaining a $300,000 seed investment. But Mr. Bhatia attributes the difficulty to their inexperience and Hotmail's unusual business plan, rather than his Indian roots. By the end of 1997, Hotmail had grown to more than 10 million users, and was acquired by Microsoft Corp. for more than $300 million.

``I quickly realised that being foreign born was no barrier, it was only a barrier in my mind,'' says Mr. Bhatia, who intended to return home when he came to the U.S. in 1988 for college. Then he was ``bitten by start-up fever.''

Indeed, Silicon Valley entrepreneurs have become global folk heroes, attracting talent to the region from aroundthe world. Now on his second start-up, Hong Chen longs to be one of the first China-born chief executives of a publicly traded U.S. company. His Gric Communications Inc., a global network of Internet services, has financial backers in the U.S., Singapore and the Netherlands. To boost his management team, Mr. Chen last year recruited as president a seasoned executive from MCI WorldCom Inc.

Immigrant entrepreneurs also strengthen Silicon Valley's bonds with the rest of the world, Ms. Saxenian says. Other Berkeley researchers recently found that U.S. states such as California and New York tend to export more goods to countries from which large numbers of immigrants come.

Researchers and immigrants themselves say immigrants frequently become entrepreneurs because they have already taken big risks by moving thousands of kilometers from home.

``Immigrants have done the start-up of their lives,'' says Dominic Orr, the Macao-born chief executive of closely held Alteon Web Systems Inc., a San Jose, California,company that makes switches that speed the response of Web sites.

Mr. Orr is a Silicon Valley rarity: an Asian-born executive recruited by venture capitalists to run a company started by native-born Americans. Among his first hires was Selina Lo, who had previously co-founded a company of her own. ``I didn't even think about the risk,'' she says. ``If this one doesn't work, I'll do another one.''

To overcome their dearth of connections to the Valley's social structure, immigrants have flocked to professional associations organized along ethnic and regional lines. They also look overseas for funding: Jimmy Lee recruited investors from Singapore and Taiwan when he started Integrated Silicon Solution Inc., a Santa Clara, California, chip maker, in 1988.

Even as a four-time entrepreneur, Mr. Tuan says he knew little about raising money from U.S. venture capitalists when he started AboveNet in 1997. So he raised the first $4.5 million the way he had financed his other companies: from himself and Taiwanesefriends.

These days, however, immigrant status may be an advantage in starting and funding companies, says Vinod Khosla, a co-founder of Sun Microsystems Inc. and a partner at the venture-capital firm of Kleiner Perkins Caufield & Byers.

``It's almost reverse discrimination,'' Mr. Khosla says. ``People almost assume that if you're Indian or Chinese you're smarter, and you get the benefit of the doubt.''

The Asian Wall Street Journal