Blow for entrepreneurs as US plans to rescind start-up visa

29 May 2018

Image: g0d4ather/Shutterstock

Policymakers are proposing an end to the International Entrepreneur Rule.

The US Department of Homeland Security (DHS) is considering plans to rescind the International Entrepreneur Rule that would have allowed immigrant founders of start-ups to stay in the US for up to five years.

The initiative – introduced during the Obama era – was designed to give entrepreneurs a two-and-a-half-year window to get their company up and running and create US jobs. An extension would be granted once the founders reached certain milestones.

The policy was in response to global initiatives by countries around the world that were inviting savvy entrepreneurs to their shores to build companies and generate jobs.

However, in Trump-era America, the move to rescind the International Entrepreneur Rule is part of a broader crackdown on immigration.

Trumping entrepreneurship

In recent weeks, we reported on fears that the H-1B visa – which allows US companies to employ graduate-level workers in areas such as IT, science and medicine – may be in Trump’s sights.

More than 70pc of the H-1B visas approved in 2016 were given to Indian workers, and the second-largest group was Chinese workers. In fact, the CEOs of tech giants Microsoft and Google happen to hail from India and would have come to the US on such visas.

But, in an entrepreneurial society such as the US, surely even the most hard-nosed Republican would appreciate the exchange of a visa in return for job creation?

Afraid not. According to the San Francisco Chronicle, the DHS has published a draft proposal to officially rescind the International Entrepreneur Rule, also known as the start-up visa rule.

After various stops and starts, the rule has been in place for just several months and now it faces being axed.

It is unclear how many start-up founders have used it but, for most entrepreneurs, getting out to Silicon Valley or other centres of US commerce is a key objective. Not only that, but US investors see establishing in Silicon Valley as evidence of commitment by founders.

The DHS has argued that the International Entrepreneur Rule is not the “appropriate vehicle for attracting and retaining international entrepreneurs, and does not adequately protect US investors and US workers employed by or seeking employment with the start-up”.

The DHS cited administrative complexities as the reason for the decision. It also pointed out that the scheme was set up using executive power rather than through congressional approval.

Critics of the decision to rescind the rule, such as, warn that it will mean fewer immigrants and fewer new American jobs.

“Eliminating this vital policy is a clear step in the wrong direction that will hurt job creation and middle-class wage growth in the US,” it warned.

In economic nerve centres such as Silicon Valley, where it is estimated that two-thirds of workers come from outside the US, these Trump-era policies could prove disastrous in the long run.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years