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Program for foreign entrepreneurs to work in U.S. may be scrapped by Trump

Program for foreign entrepreneurs to work in U.S. may be scrapped by Trump

EB-5 Visa, EB5 Visa, EB-5 Investment

Foreign entrepreneurs hoping to found startups in the U.S. will not be able to apply next week for permission to work here as the Trump administration takes steps to rescind a program created for them under former President Barack Obama.

The rule, which would have used “parole” to allow entrepreneurs into the country to work for 2½ years without giving them a visa, was finalized in January and would have gone into effect Monday. This week, President Donald Trump’s administration moved the start date back eight months, to March, reasoning in an announcement in the federal register that that would allow for time to get public comment on the possibility of getting rid of the rule before it goes into effect. The administration believes that the rule contradicts one part of a January executive order on immigration that called for limited use of parole, according to the announcement.

Tim Ryan, co-founder of Startup San Diego, criticized the decision, saying that it would harm the U.S. economy.

“I can’t express in proper, nice terms how short-sighted a view that is,” Ryan said in a phone interview. “It doesn’t help America. It hurts us, and it’s going to widely benefit some other country that makes it easier, more efficient and more friendly to hire tech workers.”

He worried that investors would now shy away from investing in startups with foreign founders even if the rule eventually goes into effect. He said it will seem too risky to count on the rule staying in place.

The people who would be affected the most, he said, are recent college graduates who were here on student visas and hoped to stay and work on startup ideas.

Such workers don’t have many other options, Ryan said. He said most startups, especially in the early and mid stages, don’t have the financial or legal resources to sponsor a visa for an employee. Entrepreneurs who find larger companies to sponsor them would be bound to that company and unable to work on their own ideas for several years, he said.

He said suggestions that foreign entrepreneurs use a program for foreign investors to get green cards, called an EB-5 visa, were “extremely ridiculous.” The program requires investments of at least $500,000, depending on the location and type of project.

“I know very, very few people who are entrepreneurs in their early 20s who have $500,000 cash in their bank accounts,” Ryan said. “I’ve been an entrepreneur for over 10 years, and I don’t have $500,000 cash in my bank account.”

“These are people that want to build companies,” Ryan added. “These are young, talented people that are risk takers. They are not people that roll out with $500,000 cash.”

The entrepreneur program would have required foreign entrepreneurs to show that their U.S.-based companies had received a “significant investment of capital from certain qualified U.S. investors,” awards or grants and that the startups had been created within the past five years.

Groups that have supported Trump’s other immigration policy changes pushed for his administration to get rid of the program.

David North, a fellow at the Center for Immigration Studies, one such group, called it an “unnecessary piece of regulation.”

“It’s like hiring a bodyguard to guard a defensive lineman when he goes to the movies so that he doesn’t get assaulted,” North said in a phone interview. “The program is for well-connected, bright, successful people, and people with access to money or they wouldn’t be entrepreneurs. They don’t need it. If they can’t figure out how to stay in the U.S., it’s sort of like an IQ test.”

North said such entrepreneurs should pursue work visas or go for the investors visa.

“It’s really a waste of government time to make it particularly easy for people who can get in anyway,” North said.

Under Obama, the Department of Homeland Security estimated that about 2,940 entrepreneurs would be eligible for the program annually, according to a press release announcing the final rule.


Source: http://www.sandiegouniontribune.com/news/immigration/sd-me-foreign-entrepreneur-20170711-story.html

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