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DHS Freezes Implementation of the International Entrepreneur Rule and Threatens to Repeal It

Maria del Carmen Ramos

In a surprising move to the startup community, the Trump administration has moved to delay and possibly repeal a rule that would help foreign entrepreneurs launching foreign startups apply for parole status to work in the United States.

By way of background, U.S. Immigration and Citizenship Services (USCIS) announced last fall a proposed rule that would allow certain international entrepreneurs to enter the U.S. for a period of up to two years so that they could start or scale their businesses if granting such a stay would provide “significant public benefit through substantial and demonstrated potential for rapid business growth and job creation.” In order to be eligible under the International Entrepreneur Rule, eligible entrepreneurs were required to comply with the following requirements:

  1. Have a significant ownership interest in the startup (of at least 15%)
  2. Have an active and central role in the startup’s operations
  3. Startup must have been formed in the U.S. within the last three years
  4. Startup must have a substantial and demonstrated potential for rapid business growth and job creation, as evidenced by:
    • Significant investment capital (of up to $345,000) from certain qualified U.S. investors with established records of successful investments;
    • Significant awards or grants (of at least $100,000) from certain federal, state and local government entities; and
    • Partially satisfying one or both of the above criteria in addition to other reliable and compelling evidence of the startup entity’s substantial potential for rapid business growth and job creation.

According to the U.S. Department of Homeland Security (DHS), the rule has been delayed to allow DHS time to ensure that the rule complies with President Trump’s January 25th executive order to improve border security. That particular executive order called for an end of the “abuse” of parole status.  The problem with that position is that generally parole is granted to refugees or foreign nationals who make significant contributions to the public at large. In the case of entrepreneurs, after presenting eligibility evidence, these foreign nationals would be required to demonstrate that they have hit targets for U.S. job and revenue creation—two things that would definitely help boost the U.S. economy.  For that reason, the administration’s decision to ice the rule has left many scratching their heads.

So while the future of the International Entrepreneur rule is currently uncertain, one thing is not: the current administration is bound to face legal challenges as a result of its decision to both delay and likely repeal the rule. Continue to check back with us for updates on the status of this proposed rulemaking.  For more information, please contact Maria del Carmen Ramos at 813.227.2252 or mramos@slk-law.com.

 

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