As Trump Delays the U.S. Startup Visa, ‘Another Nail in the Coffin’ For Immigrant Entrepreneurs
Recent data shows that only 10 international founders have applied for the U.S. startup visa program, enacted by former U.S. President Barack Obama back in 2016.
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Fiona McEntee, an Irish immigrant and the founder of her Chicago-based law firm McEntee Law Group, celebrated the 2016 passage of a U.S. startup visa program. That visa, enacted by then-President Barack Obama as part of the so-called International Entrepreneur Rule, was intended to draw thousands of foreign founders stateside to boost jobs and economic growth. In the early months of 2017, McEntee was preparing to help several startup clients file the necessary paperwork to obtain the visa.
Now, due to the Trump administration's planned overhaul of the program, McEntee is dissuading her clients from applying. "From our point of view, it's very difficult to advise a client to choose an option that we don't know will be around much longer," the attorney tells Inc.
Indeed, just days before the U.S. startup visa was to be implemented last July, the Department of Homeland Security published a rule in the Federal Register, delaying the implementation until March 2018 and stating that it intended to rescind the regulation altogether. Although the National Venture Capital Association, a Washington D.C.-based trade group representing the venture capital community, ultimately challenged the DHS and won--allowing the program to remain in place for now--the administration has repeatedly said that it would find a way to discontinue it.
That's sewing uncertainty for entrepreneurs globally. Indeed, U.S. Citizenship and Immigration Services says it has received only 10 applications for the U.S. startup visa, despite the fact that DHS last summer predicted that it could notch nearly 3,000 applications annually, according to a recent Bloomberg report. Meanwhile, those ten entrepreneurs are effectively stuck in limbo; USCIS has not issued a single visa, and says it has no timeline for resolving those applications.
"This is not the welcome mat we need to be putting out for entrepreneurs," says Bobby Franklin, president and CEO of the NVCA. "We're going to continue to push this administration, and frankly everyone in Washington to understand the merits of encouraging more, new company formation in the U.S., and to recognize the strong correlation between immigrant entrepreneurs and successful companies."
The issue is symptomatic of the tension that exists between the technology industry--which increasingly relies on foreign talent, and has lobbied Congress to maintain existing immigration programs--and President Trump, who has repeatedly argued that companies abuse visa programs to avoid hiring American talent. Earlier this month, it was revealed that the number of applications for H-1B visas--a similar, coveted program for companies to onboard specialized foreign labor--declined for the second year in a row, as the administration moves to streamline the program. "It [the change] has absolutely hurt my business," noted Ximena Hartsock, a Chilean immigrant and the founder of the Washington D.C.-based civic technology platform Phone2Action, referring to the H-1B reforms in an earlier conversation with Inc.
Lacking access to the American market, many entrepreneurs are flocking to other areas of the world where they believe their companies have a greater chance at success. In Canada, for instance, a recently introduced Global Skills program allows tech workers to obtain work permits in just two weeks' time, compared with the roughly six months it would take to obtain an H-1B visa stateside. "There are tons of stories about entrepreneurs who are in this limbo, and frankly Canada is taking advantage of that," says the NVCA's Franklin. Immigration lawyer McEntee, meanwhile, notes that a number of her clients are considering relocating to South American countries such as Chile, now that the U.S. startup visa program no longer appears to be valuable.
To be sure, it's not entirely clear that the U.S. startup visa will go away. The administration could move to keep the rule in place, or otherwise tweak the program to be more selective about which entrepreneurs are eligible to begin with, for example. A better solution, in Franklin's view, would be for Congress to pass an actual bipartisan startup visa law. (The current startup visa is a workaround, an aspect of the International Entrepreneur Rule, created after multiple proposals for an official visa category for foreign-born entrepreneurs died in Congress.)
McEntee isn't as optimistic. "I've given up anticipating what their next move is going to be," she says, nodding to surprise steps from the Trump administration such as the implementation of a sweeping travel ban in January of 2017. "This [the delaying of the visa] is another nail in the coffin for immigrants here in the U.S," she adds.