ENTREPRENEURS
Is the U.S. in Danger of Losing Immigrant Entrepreneurs?

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A decision by the Trump administration to delay and possibly rescind an Obama-era rule could cause the U.S. to fall behind other countries in attracting immigrant entrepreneurs who bring investments and create jobs, experts say.

The so-called International Entrepreneur Rule that the Obama administration introduced in August 2016 aimed to grant parole visas for up to five years to qualified immigrant entrepreneurs. The rule was set to take effect on July 17, but a week before that, the Department of Homeland Security (DHS), which oversees the program, announced that its effective date has been delayed until March 14, 2018. That move follows a memo the Trump administration issued in January that froze all new regulations pending reviews.

In continuing with the rule, the potential upsides in investments and jobs more than offset any downsides, including the possibility of fraud and of people attempting to game the system by creating shell companies, according to Wharton management professor David Hsu and immigration attorney Cyrus D. Mehta of Cyrus D. Mehta & Partners, an immigration law firm in New York City. The DHS had in January estimated that 2,940 immigrant entrepreneurs potentially would be eligible annually for visas under the International Entrepreneur Rule.

The requirements immigrant entrepreneurs must meet to qualify on a case-by-case basis are also stiff, Hsu and Mehta pointed out. In order to qualify, foreign entrepreneurs must have raised at least $250,000 in startup capital and received at least $100,000 in U.S. government grants, in addition to bringing “significant public benefit” to the U.S. such as the potential for rapid growth and job creation.

The freeze and the likely elimination of the rule have drawn criticism from Silicon Valley and other technology leaders. “At some level, this is all about how do we create American companies, American jobs and be globally competitive, and in that context, what role can immigration play,” Microsoft CEO Satya Nadella told CNN in a recent interview.

Hsu and Mehta discussed the potential fallout from the elimination of the rule on the [email protected] show on Wharton Business Radio on SiriusXM channel 111. (Listen to the podcast at the top of this page.)

Here are five takeaways from their discussion:

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