U.S Trade Body, Indian Startup Founders File Lawsuit Over ‘Startup Visa’

The National Venture Capital Association, a United States-based trade association, filed a motion in the Washington District court last week over the perceived failure of the U.S. Department of Homeland Security (DHS) to approve applications from foreign entrepreneurs to operate in the country, the Times of India reported.

Apart from the association, the plaintiffs also include some startups and their founders, such as Omni Labs and its founders Nishant Srivastava and Vikram Tiwari. Srivastava and Tiwari, who are Indian citizens, had to operate their startup from Canada instead of the United States due to the delay by the DHS in implementation of the Obama-era International Entrepreneur Rule.

“NVCA and the other plaintiffs have grave concerns that DHS has chosen to disregard the court’s previous order. DHS has failed to take action on International Entrepreneur Rule applications, including the applications of the plaintiffs. Troublingly, DHS has made public statements suggesting it is not implementing the International Entrepreneur Rule. The motion to conduct discovery is essential to ensure the court’s decision is fully implemented to allow International Entrepreneur Rule to move forward,” the venture capital association said in a statement.

A Homeland Security spokesperson said that the agency cannot comment on pending litigation, CNN Tech reported.

The International Entrepreneur Rule, signed by former U.S. President Barack Obama in 2016, enables foreign entrepreneurs to operate in the United States for a certain period. It acts as a workaround for entrepreneurs over the existing visas in America as, unlike Canada or France, the country does not have special visas for foreign entrepreneurs. It gives immigration “parole” to qualified international entrepreneurs, based on prescribed criteria such as funds raised — minimum $250,000 from qualified U.S. investors or $100,000  from government grants.

It means they can temporarily enter and stay in the United States and grow their startup, without necessarily having a visa or green card. Even though this rule is dubbed “startup visa,” it is actually a permit for foreign entrepreneurs to stay in the country for two-and-a-half years with the possibility of similar tenure extension.

Washington has already begun taking steps to rescind the rule, with the Office of Information and Regulatory Affairs clearing the move to roll it back on May 2. United States Citizenship and Immigration Servicese director L. Francis Cissna wrote a letter to the Senate last month, confirming the plans to rescind the rule.

The process of finalizing new rules may take several months as the proposal for rollback would be published in the federal register this month and public comments will be invited. Until this process takes place, immigration experts have been quoted as saying that the International Entrepreneur Rule must be respected.

A U.S district court said in December 2017 that DHS’s delay in implementation of the rule was unlawful, the Times of India had reported earlier. The DHS had then posted instructions and forms for entrepreneurs to apply. Not a single application, however, including those filed by the entrepreneurs who had successfully fought the litigation, have been approved so far. The earlier lawsuit was filed in September 2017, which said the administration didn’t follow the “notice-and-comment” procedures before delaying the rule.

Only 10 people have have applied for the “startup visa” so far, which are left in limbo, Bloomberg reported last month.