A new immigration rule that would allow foreign-born entrepreneurs to stay legally in the U.S. and work on their companies could become a key point of contention between tech execs and the White House, who are meeting this week.
The International Entrepreneur Rule, colloquially called a “startup visa,” was created through an executive order from President Obama and was supposed to launch on July 17th, but now the rule has been sent back for review by the Trump administration.
Prateek Joshi, a startup founder in Palo Alto, California, would directly benefit from the new rule if it goes into effect. Originally from India, he’s been in the country for about eight years. Currently he is here on an H-1B visa, but it’s set to expire soon. If this new entrepreneur rule doesn’t pass he may have to move his company and the potential jobs overseas.
“The headquarters has to move somewhere else right, because all the jobs that are being created here will be created for example in India, or some other country…Canada, where the government is more supportive of setting up businesses,” Joshi said.
Currently there is no clear path for foreign-born entrepreneurs to start companies in the U.S. and founders have to navigate obstacles with the existing visa options to gain legal residency. This includes competing with applicants from large outsourcing firms in the H-1B lottery.
Under the International Entrepreneur Rule, startup founders have to meet strict guidelines: raise at least $250,000 in capital investments from well established U.S. investors and prove they can create U.S. jobs. If they meet those guidelines, entrepreneurs are granted an initial two and half year parole period to stay in country and work on their companies.
Joshi’s company, Pluto AI, came about in March 2016 and Joshi said they have raised the required amount of investment to qualify for the rule. He employs three people at the moment and hopes to expand and hire up to 200 employees in the next five years.
While the U.S. limits opportunities for foreign born entrepreneurs and foreign workers, other countries are expanding opportunities. For example, French President Emmanuel Macron on June 15th announced a new technology visa to make it easier for foreign talent to work, and create companies in France.
Todd Schulte, President of pro-immigration group FWD.us, said delaying this rule is the wrong approach because it has bipartisan support and there currently is no visa or rule that specifically helps foreign-born entrepreneurs.
“This is about entrepreneurship in Wisconsin, in Ohio, in North Carolina. It’s all over the country, not just Silicon Valley,” Schulte said.
On May 23, startup founders, investors and civic leaders from places like Kansas, Iowa and Missouri sent a letter to President Trump urging him to implement the International Entrepreneur Rule, arguing that it is important for innovation and job creation all over the country.
Maha Ibrahim, a partner at Canaan Ventures, said 51 percent of the country’s unicorns have at least one foreign-born founder.
We need to be able to find a way to foster immigration to this country for innovation,” Ibrahim said. “It’s scary, certainly hurts our companies in terms of their ability to hire and retain talent, and innovate, that is not just a Silicon Valley problem, it ends up being one that is country wide.”
But others argue that loosening restrictions on work visas hurts American workers. Judiciary Committee chair Charles Grassley was among the critics of the rule when it was first passed, arguing that President Obama should have passed the measure through Congress instead of an executive order.