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US government proposes removal of the so-called 'startup visa'

The Department of Homeland Security has formally proposed to rescind the so-called startup visa, a program that was e...

Posted: May 25, 2018 4:05 PM
Updated: May 25, 2018 4:05 PM

The Department of Homeland Security has formally proposed to rescind the so-called startup visa, a program that was enacted by the Obama administration.

In a document filed Friday to the Federal Registrar, the government states that it believes the program is "inadvisable, impracticable, and an unwarranted use of limited agency resources."

DHS said the rule lacks sufficient protections for US workers and investors, and believes it to be "out of sync with DHS' current policy priorities."

The rule aimed to help keep foreign entrepreneurs in the United States by giving them a workaround to existing visas. It says foreigners building "fast-growing businesses" could apply for "parole status" to work in the United States. Parole status is typically granted to individuals who need a visa to work on humanitarian or medical relief.

While some nations, such as France and Canada, have special visas intended to encourage foreign entrepreneurs to build companies in their countries, the United States does not. People who come to America and start companies typically have to navigate a complicated web of existing visas, like the H-1B. The H-1B requires individuals to work under the control of an employer, making it difficult to launch a company.

Related: Critics cite 'grave concerns' over government's handling of 'startup visas'

The rule indicates that entrepreneurs must show that their young companies -- no more than five years old -- have the potential for "rapid growth" and job creation, by way of government grants of at least $100,000 or funding of at least $250,000 from a qualified investor. The rule excludes small businesses from consideration. Startups must also be able to operate legally in the country, and founders must own a minimum 10% stake of the firm at the time of the application.

The parole status lasts for 2.5 years and could be renewed for another 2.5 years. It could also be revoked at any time if it's believed the company is no longer benefiting the public.

The program was slated to begin in June 2017, but it never really got off of the ground. The Trump administration delayed its launch just days before it was set to begin. Then in September, the National Venture Capital Association and startup founders sued the Department of Homeland Security, arguing that the agency didn't follow proper "notice-and-comment" procedures before delaying the rule.

In December, a judge said that the Department of Homeland Security did not have reasonable cause to delay the start of the visa program for foreign entrepreneurs. It posted instructions and a form to apply later that month.

United States Citizenship and Immigration Services director L. Francis Cissna wrote in a letter in April that government had not processed any requests for the visa to date and confirmed plans to rescind the rule. The government has received approximately 12 applications for the program, but has not yet issued any final decisions, according to a USCIS spokesperson

DHS said in its filing Friday that it believes the rule focused too much on the economic benefits that potential foreign entrepreneurs may bring without providing a clear pathway for them to remain in the US.

The notice will be officially published on Tuesday, at which point there will be a 30-day period for the public to comment on the proposal to rescind the rule.

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