Startups May Need An Export License To Hire Foreign Nationals

New rules coming out of Washington D.C. could require startups to get government approval before hiring foreign nationals to do work, according to reports.

According to a report penned by Jeff Farrah, the general counsel of the National Venture Capital Association, Farrah argued the Commerce Department’s move to define emerging technology could impact the ability for startup companies to employ foreign nationals.

As it stands today, the U.S. government controls exports of tech for national security reasons — but most venture-backed startups aren’t impacted by the export controls because their tech isn’t listed as sensitive technology. But that could change thanks to recent legislature that calls on the Commerce Department to evaluate controls on emerging technology. In November the government comprised a list of 14 categories of technology that it is looking to control. That includes artificial intelligence and machine learning, robotics, 3D printing, and biotechnology, among others. It’s not clear which technology will be subject to new controls and by how much, noted the report.

If something is determined to be emerging technology, the government has the ability to place rules and limits on it. Farrah argued that could mean startups will have to get a license to send technology outside of the country, but they could also be prevented from hiring foreigners in the U.S. if they can export the tech to another country under deemed export. In order to protect the startups, Farrah said the government would need to tailor what it means by emerging technology.

The deemed export rule doesn’t impact green card holders, which could be a saving grace for startups — but it does to apply to employer-based visas including H-1B, noted the report.  If a U.S.-based startup hires an engineer on an H-1B visa under the new rules, it would have to get an export license for the foreign national to be employed by the company. It may be easier in a big company to have the foreign national work on non-emerging technology, but for a startup focused solely on, say, artificial intelligence, it will be nearly impossible to wall the employee off, Farrah said.  


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