[caption id="attachment_9002" align="alignnone" width="620"]
Andrew J. Zeltner of Klasko Law Partners.[/caption] A recent federal court decision brings good news to international entrepreneurs hoping to utilize the “start-up visa.” Officially known as the international entrepreneurial rule, the IER provides an important additional path for international entrepreneurs to obtain work authorization in the United States. The IER was originally introduced in the waning days of the Obama administration. The rule was specifically crafted to provide an additional work authorization option for immigrant entrepreneurs working at startup companies. Under the IER, immigrant entrepreneurs would have been eligible to apply for work authorization if they have established a business in the United States and could demonstrate substantial potential for rapid business growth and job creation. The IER was set to take effect on July 17. However, on July 11, the Department of Homeland Security issued a new rule delaying implementation of the program until March 14, 2018, and also indicated that they would likely rescind the rule in its entirety. This prompted the National Venture Capital Association to file a lawsuit claiming that the Trump administration decision to delay the rule was unlawful under the provisions of the Administrative Procedures Act, which, they contended, would have required DHS to provide notice and solicit public comments, as typically required by the APA. In National Venture Capital v. Duke, the court was faced with the question of whether DHS could bypass traditional notice and comment rulemaking to delay the implementation of the start-up visa. In a clear rebuke to the administration’s position, the court granted the plaintiffs’ summary judgement motion and held that DHS did not have “good cause” to dispense with the APA’s notice and comment requirements. Judge James Boasberg (U.S. District Court for the District of Columbia), colorfully noted that “elections have consequences. But when it comes to federal agencies, the Administrative Procedure Act shapes the contours of those consequences.” Indeed, the court’s ruling reiterated the relatively high bar for invocation of the “good cause” exception and held that the government’s last-minute attempt to delay implementation of the rule (mere days before the rule was scheduled to take effect), negated any legitimate governmental claim of good cause. To recap, the key eligibility requirements outlined in the IER are as follows:
-
Must have established a U.S. start-up business within five years before the application for parole;
-
Must hold an ownership interest of at least 10 percent;
-
Must play an active role in the operations of the business, and cannot merely be an investor;
-
The startup must have received a capital investment of at least $250,000 from qualified U.S. investors or at least $100,000 in grants or awards from qualifying U.S. federal, state or local government entities;
-
A qualified investor must have invested a total of at least $600,000 in startups over the last five years and at least two of the startups must have created at least five qualified jobs or generated at least $500,000 in revenue with average annualized growth of at least 20 percent and;
-
Applicants who can only partially meet the funding requirements can attempt to provide additional compelling evidence of the startup’s substantial potential for rapid growth.