Judge Rejects DHS Delay on Foreign Entrepreneur Startup Visa Immigration Program

December 5th, 2017

A federal judge ordered the Department of Homeland Security (DHS) to rescind its delay of a rule allowing certain foreign entrepreneurs to work in the US to grow their startup companies. The National Venture Capital Association filed a lawsuit in the US District of Columbia challenging the delay of the International Entrepreneur Program (IEP). It argued that the Trump Administration violated the Administrative Procedures Act (APA) by ignoring the proper procedures in postponing implementation of the International Entrepreneur Program (IEP), which was scheduled to go into effect on July 17, 2017. Several technology companies later joined the suit.

The rule, proposed by President Obama, would allow for foreign entrepreneurs to work in the US for five years to direct and develop their business. In July 2017 before the effective date, the Trump Administration pushed back the implementation to March 14, 2018, stating that it was “highly likely” that the rule would be revoked. Judge Boasby held that the government violated the APA, which requires that the government provide the public with a voice during the rule-making process, and in particular, with the opportunity to provide comments in advance of the proposed delay.

The International Entrepreneur Program (IEP), often called the startup visa, will allow foreign entrepreneurs to grow innovative companies, stimulate the economy and create jobs. The US economy has thrived in part because of the significant contributions of immigrant entrepreneurs.

Although the NVCA is victorious in its suit, it is not clear whether or when DHS will begin accepting IEP applications. It is also possible that DHS will appeal the District Court ruling.

USCIS Delays Implementation of International Entrepreneur Final Rule

July 13th, 2017

According to the Federal Register, Vol. 82, No. 131, Tuesday, July 11, 2017, the Department of Homeland Security (DHS) is temporarily delaying the effective date of the International Entrepreneur Final Rule (82 FR 5238). During this time, DHS will obtain comments from the public regarding a proposal to rescind the rule pursuant to Executive Order (E.O.) 13767, ‘‘Border Security and Immigration Enforcement Improvements.’’ The effective date of the original regulation entitled International Entrepreneur Rule, published in the Federal Register on January 17, 2017, 82 FR 5238, is delayed from July 17, 2017, to March 14, 2018. Written comments must be received on or before August 10, 2017.

The original regulation authorizes parole for foreign entrepreneurs who can demonstrate that they will provide a significant public benefit to the United States as a result of economic growth or job creation resulting from their entrepreneurial activities. To qualify, the applicant must be an entrepreneur connected with a start-up entity who is well positioned to advance the entity’s business. The entrepreneur must own at least 10% of the entity at the time of the application and demonstrated that s/he plays an active and central role in the operations and future growth of the entity. Also, the “start-up” entity must have been formed within the five years immediately preceding the date of filing the initial parole application and it must have lawfully done business since its creation and have substantial potential for rapid growth and job creation. There are three ways that an applicant can demonstrate substantial potential for rapid growth and job creation, including any one of the following:

1. Investments from Established U.S. Investors: Investments of capital must be at least $250,000 from U.S. investors (such as venture capital firms, angel investors, or start-up accelerators) with a history of substantial investment in successful start-up entities.

The U.S. organization or individual investor must (1) have made qualified investments of at least $600,000 in start-ups over the prior five-year period; (2) show that subsequent to such investment at least two such start-up entities created at least five qualified jobs or generated at least $500,000 in revenue, with average annualized revenue growth of at least 20%. A qualified job means full-time employment in the U.S. that has been filled for at least one year by a qualifying employee. A qualifying employee includes a U.S. citizen, lawful permanent resident, or other immigrant lawfully authorized to work in the U.S. who is not an entrepreneur of the start-up entity or the parent, spouse, brother, sister, son or daughter of such entrepreneur. Independent contractors do not qualify as employees.

2. Government Grants: Awards or grants of at least $100,000 from Federal, State or local government entities with expertise in economic development, research and development, or job creation;

3. Alternative Criteria: If the applicant only partially meets one or more of the above criteria relating to capital investment or government funding, s/he may still succeed with the parole application if s/he can provide additional reliable and compelling evidence that s/he would provide a significant public benefit to the U.S. upon receipt of the parole status.