The administration of Barack Obama is proposing a new rule to allow foreign startup founders who’ve raised money from American investors to come to the United States for two to five years, with the option to apply to stay longer.
TheÂ International Entrepreneur Rule, which is expected to go into effect after a 45-day comment period, is a sort of workaround for President Obama, who has been working hard to create a startup visa that would pave the way for immigrant entrepreneurs looking to start businesses in the United States. But the congressional gridlock has made new immigration legislation impossible, and several attempts to pass a startup visa died.
This new rule takes advantage of the existing Immigration and Nationality Act, which permits the government to grant people temporary entry into the country on a case-by-case basis for urgent humanitarian reasons or significant public benefit. The White House is now arguing that entrepreneurs who create jobs in the United States and contribute to gross domestic product are providing a significant public benefit.
Entrepreneurs have to apply for two tiers of admission.The first grants them entry into the country for two years, but the government can reverse that decision any time. To qualify under that part of the rule, founders must own at least 50 percent of their companies and have raised at least $345,000 from US investors with a track record of US investments, or at least $100,000 from federal, state, or local government agencies.
The second tier grants founders admission for an additional three years. To qualify for that, founders must continue running their businesses in the US, retain at least 10 percent ownership, and either raise at least $500,000 from US investors, generate $500,000 in annual revenue with 20-percent year-over -ear growth, or prove they’ve created at least 10 full-time jobs over those five years.
After that, entrepreneurs looking to stay in the US could apply for other existing visas, like the EB-2 visa, which is employment based.
The tech industry in US has been advocating for comprehensive immigration reform for years, and a startup visa of some kind has been a top priority. And tech-backed lobbying groups like FWD.us have been working with the White House since 2015 to make this legislation possible. More than 40 percent of Fortune 500 companies were founded by immigrants or the children of immigrants, and immigrants have founded one-quarter of high-tech startups across America.