The rule was proposed as a workaround for foreign entrepreneurs because there isn't now a good avenue for leaders from other countries to build companies in the U.S. Work visas, like the H-1B, only apply to skilled employees, not startup founders.
The programme is favoured by many in the technology industry and was finalised during the last days of the former President Barack Obama's administration.
The National Venture Capital Association, an industry trade group, also criticised the Trump administration's step in a statement.
The International Entrepreneur Rule allows certain foreign entrepreneurs to stay in the USA for up to five years if they can prove they will provide certain benefits for the country, mainly job growth. The Department of Homeland Security (DHS) has estimated that almost 3,000 entrepreneurs would be eligible for such visas each year.
A draft of the notice posted online by the Federal Register said DHS plans to rescind the rule, but is requesting public comments before issuing a final decision.
The president's ban on travel from six Muslim-majority countries drew criticism from a wide swath of companies, with more than 160 technology firms, including Amazon.com Inc., Facebook Inc. and Google corporate parent Alphabet Inc. joining a legal brief criticizing the executive order.
Muslim leaders rally in Berlin against terrorism
Not to say that Islam is a religion of peace, which you know, but to say that we are seeking here our identity, a European identity.
"At a time when countries around the world are doing all they can to attract and retain talented individuals to come to their shores to build and grow innovative companies, the Trump Administration is signaling its intent to do the exact opposite", he said in a statement.
Studies show tat immigration is deeply connected to America's start-up culture.
It's important to note that immigrants already have created tremendous value for the U.S. Indeed, more than half of the startups worth $1 billion or more were launched by immigrant founders.
The visa program, proposed previous year by former President Barack Obama, was meant to give entrepreneurs who are not eligible for other types of visas permission to live in the US for 30 months to get their enterprises up and running.
In a notice to be published today in the Federal Register, however, the Homeland Security Department said that it has made a decision to delay the effective date of the rule until next March while it reviews it in light of an executive order on border security and immigration enforcement signed by Trump Jan. 25.