A final rule on international entrepreneurs, issued by the Obama administration on January 17, 2017, and scheduled to take effect July 17, 2017, was recently returned to the Office of Management and Budget for further review. According to new reports, the Trump administration has decided to delay the rule’s effective date until March 2018, and ultimately to rescind it.
The final rule, intended to encourage entrepreneurs wishing to build companies in the United States, would have added new regulatory provisions guiding the use of parole on a case-by- case basis with respect to entrepreneurs of start-up entities who can demonstrate through evidence of “substantial and demonstrated potential for rapid business growth and job creation” that they would provide a “significant public benefit” to the United States. Such potential would be indicated by, among other things, “the receipt of significant capital investment from U.S. investors with established records of successful investments, or obtaining significant awards or grants from certain Federal, State or local government entities.” If granted, parole would provide a temporary initial stay of up to 30 months (which may be extended by up to an additional 30 months) “to facilitate the applicant’s ability to oversee and grow his or her start-up entity in the United States.”
A group of investors and startup founders in 25 states recently sent a letter to President Trump encouraging him to allow the rule to move forward. Noting that immigrant entrepreneurs are a “critical driver of increased economic activity” in the United States, the letter states that the international entrepreneur rule would be a “job creation tool” and is “desperately needed at a time when U.S. entrepreneurial leadership is being challenged by other countries.” Among other efforts, French President Emmanuel Macron recently announced a new technology visa for start-up founders, employees, and investors. “I want France to attract new entrepreneurs, new researchers, and be the nation for innovation and start-ups,” he said. And the United States’ next-door neighbor, Canada, offers an entrepreneur start-up visa program that grants permanent residence to immigrant entrepreneurs.
Bobby Franklin, president and chief executive of the National Venture Capital Association (NVCA), noted the contributions of immigrant entrepreneurship to the U.S. economy. He said that NVCA’s research has found that a third of U.S. venture-backed companies that went public between 2006 and 2012 had at least one immigrant founder. He noted a recent study showing that immigrants started more than half of U.S. “unicorns,” or privately held companies valued at more than $1 billion.
Mr. Franklin’s remarks are at https://techcrunch.com/2017/06/19/ensuring-foreign-born-founders-can-grow-their-startups-in-the-u-s/, The letter from the group of investors and startup founders discussed above is at http://nvca.org/wp-content/uploads/2017/06/Letter-to-President-Trump-on-IER-from-emerging-ecosystems.pdf. The original final rule is at https://www.gpo.gov/fdsys/pkg/FR-2017-01-17/pdf/2017-00481.pdf. A related article about the latest developments is at http://www.sfchronicle.com/business/article/Trump-administration-has-plan-to-scrap-startup-11236692.php.