International Entrepreneur Rule: Over Before it Started?

Last week, the Trump administration provided notice to the Office of Management and Budget that it plans to end the International Entrepreneur Rule, which never took effect. The publication of an official proposal to repeal the rule will now set off a notice and comment period.

The Obama administration rule was aimed to stimulate start-ups and ease the entry of approximately 3000 would-be entrepreneurs.  Foreign nationals who had an ownership stake in a startup U.S. business would be paroled to live and work in the U.S. for 30 months or longer. Limited to businesses with at least $250,000 in capital investment or $100,000 in grants, the initiative had substantive requirements and was limited to parole status. Just days before its July 17,  2017 effective date, the U.S. Citizenship and Immigration Service announced that it would delay the implementation of the rule until March 2018.  The ultimate intent to block the rule from ever going into effect was clear from the start.

In September, an interested group, The National Venture Capital Association sued the Trump administration over its decision to delay.  They claim that without prior notice, the delay violated federal administrative procedures law.  The group is seeking an order declaring the delay invalid. Last week, the government responded in its defense arguing that it should be exempted from notice and comment requirements.  It invoked the good cause exception to notice and comment rulemaking procedures to prevent regulatory confusion.  The government argues that it would be a waste of resources if it were forced to accept applications during the time when it intends to revoke the rule.