Seattle tech leaders frustrated as Trump administration blocks ‘startup visa’

The Trump administration’s delay of a rule intended to make it easier for international entrepreneurs to start up and build companies in the U.S. has Seattle tech leaders frustrated by national immigration policy once again.

President Donald Trump’s administration, in its latest effort to restrict immigration, said it plans to cancel an Obama-era program that would have allowed foreign entrepreneurs who launch startup companies in the U.S. to live in the country.

On Monday, the administration announced it would delay the International Entrepreneur Rule until next March as the Department of Homeland Security launches an additional review of the so-called “startup visa.” A notice the department issued indicates that in the interim, the administration will propose canceling the program.

The program was set to go into effect next week and would have let entrepreneurs who are not U.S. citizens stay in the country for two and a half years while they raise money and grow a business. The rule was finished near the end of the Obama administration and supported by the technology industry.

“It’s important because all the visa options that we have are not suited for founders,” said Seattle immigration attorney Tahmina Watson, who helped craft the rule. “It was going to fill a void that we have, and we’ve had it for a very long time.”

The rule, for instance, would have let international students studying in the U.S. remain in the country after graduation while they start a company. Applicants would have had to prove they had raised at least some money toward building a business and were actively working on the company.

“Many want to start companies, but our current visa mechanism essentially deports those entrepreneurs, which is utter lunacy,” said Michael Schutzler, CEO of the Washington Technology Industry Association, which also helped develop the rule.

Technology leaders have been frustrated by immigration policies during the first six months of the Trump administration, including the travel ban announced this winter and potential rules that could restrict H-1B visas, or high-tech work visas (which may actually end up benefiting some U.S. tech companies).

Immigrant founders make up a large part of the entrepreneur group that has helped to expand Seattle’s technology industry, Schutzler said. If the U.S. doesn’t encourage international founders to start companies here, they will go elsewhere, he said.

They may not go too far away. Canada has been encouraging startup entrepreneurs to set up shop in the country.

The administration’s move is also likely to draw the ire of some of the president’s allies on Capitol Hill.

A group of Republican senators last month sent Homeland Security Secretary John F. Kelly a letter calling the rule consistent with the administration’s “goals of stimulating the economy and creating job growth at home.”

“There is little benefit to losing any more ground in attracting entrepreneurs and their investments,” the senators – including Arizona’s John McCain and Jeff Flake, Utah’s Orrin Hatch and Jerry Moran of Kansas – said in the letter.

Rachel Lerman: rlerman@seattletimes.com; on Twitter @rachelerman.