USCIS Delays Implementation of International Entrepreneur Reg, Will Rescind Instead

Homeland Security today published a Federal Register notice delaying for 8 months implementation of an Obama Administration regulation seeking to encourage foreign entrepreneurs to come to the U.S. The regulation required entrepreneurs to demonstrate that their business had received significant capital from U.S. investors with established records of successful investment, or have obtained significant Federal, State or local government entities. Instead of implementing the regulation, DHS will commence a public rulemaking intended to rescind it. It is now unlikely that the entrepreneur regulation will ever take effect.

The entrepreneur regulation, which was scheduled to take effect on July 17, 2017, would have provided qualifying foreign entrepreneurs with a parole (a type of non-visa admission) into the U.S for a stay of up to 60 months in order to pursue their business objectives. When promulgated by the Obama Administration on January 17, 2017, DHS estimated that 2,490 entrepreneurs would be eligible annually for the new parole. It was anticipated that the new regulation would encourage foreign entrepreneurs to use their talents to promote new ideas for economic growth which the U.S. investment community supported with substantial capital infusions. The regulation was issued in part due to an inability of Congress to craft legislation promoting entrepreneur investment.

In delaying implementation in anticipation of rescission, the DHS Federal Register Notice referenced the January 25, 2017 Executive Order stating that parole authority should only be narrowly interpreted and highly limited in its exercise. In a rather strained argument, the Notice also asserted that federal administrative law permits DHS to delay the entrepreneur parole regulation without first providing an opportunity for public comment because the public interest merits the agency killing the rule altogether.

Whatever comments DHS ultimately receives on rescission of the entrepreneur rule (which had already been subject to public comment prior to adoption), the outcome seems precooked. The U.S. economy will suffer for it.