Washington, D.C. U.S. Citizenship and Immigration Services (USCIS) has announced today that the Department of Homeland Security is withdrawing a 2018 notice of proposed rulemaking that proposed to remove the International Entrepreneur program from DHS regulations. The International Entrepreneur (IE) parole program, first introduced in 2017, will remain a viable program for foreign entrepreneurs to create and develop start-up entities with high growth potential in the United States. The program will help to strengthen and grow our nation’s economy through increased capital spending, innovation, and job creation.
Today’s announcement is consistent with President Biden’s Executive Order 14012: “Restoring Faith in Our Legal Immigration Systems and Strengthening Integration and Inclusion Efforts for New Americans.” The executive order requires the secretary of homeland security to “identify any agency actions that fail to promote access to the legal immigration system.”
“Immigrants in the United States have a long history of entrepreneurship, hard work, and creativity, and their contributions to this nation are incredibly valuable,” said Acting USCIS Director Tracy Renaud. “The International Entrepreneur parole program goes hand-in-hand with our nation’s spirit of welcoming entrepreneurship and USCIS encourages those who are eligible to take advantage of the program.”
The initial IE final rule was published on Jan. 17, 2017, and was scheduled to take effect on July 17, 2017. This final rule guided DHS in the use of its parole authority to grant a period of authorized stay, on a case-by-case basis, to foreign entrepreneurs who demonstrate that their stay in the United States would provide a significant public benefit through the potential for rapid business growth and job creation.
Prior to the effective date, DHS published a final rule to delay the implementation date of the IE final rule to March 14, 2018. This allowed DHS additional time to draft and seek public comments on a proposal to rescind the IE final rule. However, in December 2017, a federal court vacated the delay, requiring USCIS to begin accepting international entrepreneur parole applications consistent with the IE final rule. Since then, the program has been up and running, and USCIS continues to accept and adjudicate applications consistent with existing DHS regulations.
Under the IE program, parole may be granted to up to three entrepreneurs per start-up entity, as well as their spouses and children. Entrepreneurs granted parole are eligible to work only for their start-up business. Their spouses may apply for employment authorization in the United States, but their children are not eligible for such authorization based on this parole. Additional information on eligibility and how to apply is available on the International Entrepreneur Parole page. USCIS will plan information sessions and other outreach activities to ensure foreign entrepreneurs are aware of this opportunity and how to pursue it.
The final rule provides the following provisions:
- Entrepreneurs eligible for parole are those who have possess a substantial ownership interest in a startup (at least 10% at the time of filing and decision, at least 5% during the initial parole period and at the time of adjudication of a subsequent period of re-parole); have an active and central role to its operations; and maintain ownership interest at all times during the period of parole.
- Start-up entity means a U.S. business entity that was recently formed, has lawfully done business during any period of operation since its date of formation, and has substantial potential for rapid growth and job creation. An entity that is the basis for a request for parole may be considered recently formed if it was created within the 5 years immediately preceding the filing date of the alien's initial parole request. For entities receiving Qualified government award or grant or Qualified investment, an entity may be considered recently formed if it was created within the 5 years immediately preceding the receipt of the relevant grant(s), award(s), or investment(s).
- Qualified government award or grant means an award or grant for economic development, research and development, or job creation (or other similar monetary award typically given to start-up entities) made by a federal, state, or local government entity (not including foreign government entities) that regularly provides such awards or grants to start-up entities. This definition excludes any contractual commitment for goods or services.
- Qualified investment means an investment made in good faith, and that is not an attempt to circumvent any limitations imposed on investments under this section, of lawfully derived capital in a start-up entity that is a purchase from such entity of its equity, convertible debt, or other security convertible into its equity commonly used in financing transactions within such entity's industry. Such an investment shall not include an investment, directly or indirectly, from the entrepreneur; the parents, spouse, brother, sister, son, or daughter of such entrepreneur; or any corporation, limited liability company, partnership, or other entity in which such entrepreneur or the parents, spouse, brother, sister, son, or daughter of such entrepreneur directly or indirectly has any ownership interest.
- Qualified investor means an individual who is a U.S. citizen or lawful permanent resident of the United States, or an organization that is located in the United States and operates through a legal entity organized under the laws of the United States or any state, that is majority owned and controlled, directly and indirectly, by U.S. citizens or lawful permanent residents of the United States, provided such individual or organization regularly makes substantial investments in start-up entities that subsequently exhibit substantial growth in terms of revenue generation or job creation. Such an individual or organization may be considered a qualified investor if, during the preceding 5 years:(i) The individual or organization made investments in start-up entities in exchange for equity, convertible debt or other security convertible into equity commonly used in financing transactions within their respective industries comprising a total in such 5-year period of no less than $600,000; and
(ii) Subsequent to such investment by such individual or organization, at least 2 such entities each created at least 5 qualified jobs or generated at least $500,000 in revenue with average annualized revenue growth of at least 20 percent.
- Qualified job means full-time employment located in the United States that has been filled for at least 1 year by one or more qualifying employees.
- Qualifying employee means a U.S. citizen, a lawful permanent resident, or other immigrant lawfully authorized to be employed in the United States, who is not an entrepreneur of the relevant start-up entity or the parent, spouse, brother, sister, son, or daughter of such an entrepreneur. This definition shall not include independent contractors.
- Full-time employment means paid employment in a position that requires a minimum of 35 working hours per week. This definition does not include combinations of part-time positions even if, when combined, such positions meet the hourly requirement per week.
- U.S. business entity means any corporation, limited liability company, partnership, or other entity that is organized under federal law or the laws of any state, and that conducts business in the United States, that is not an investment vehicle primarily engaged in the offer, purchase, sale or trading of securities, futures contracts, derivatives or similar instruments.
- Material change means any change in facts that could reasonably affect the outcome of the determination whether the entrepreneur provides, or continues to provide, a significant public benefit to the United States.
Initial parole -
(1) Filing of initial parole request form. An alien seeking an initial grant of parole as an entrepreneur of a start-up entity must file Application with USCIS with the required fee and supporting documentary evidence demonstrating eligibility.
(2) Criteria for consideration -
(i) In general. An alien may be considered for parole under this section if the alien demonstrates that a grant of parole will provide a significant public benefit to the United States based on his or her role as an entrepreneur of a start-up entity.
(ii) General criteria. One may meet the standard by providing a detailed description, along with supporting evidence:
(A) Demonstrating that foreign national is an entrepreneur and that his or her entity is a start-up entity; and
(B) Establishing that the foreign national's entity has:
(1) Received, within 18 months immediately preceding the filing of an application for initial parole, a qualified investment amount of at least $250,000 from one or more qualified investors; or
(2) Received, within 18 months immediately preceding the filing of an application for initial parole, an amount of at least $100,000 through one or more qualified government awards or grants.
(iii) Alternative criteria. The foreign national who satisfies the criteria in (2)(ii)(A) of this section and partially meets one or both of the criteria in paragraph (2)(ii)(B) may alternatively meet the standard described in paragraph (2)(i) by providing other reliable and compelling evidence of the start-up entity's substantial potential for rapid growth and job creation.
Additional periods of parole (re-parole)
(1) Filing of re-parole request form. Before expiration of the initial period of parole, an entrepreneur parolee may request an additional period of parole based on the same start-up entity that formed the basis for his or her initial period of parole granted under this section. To request such parole, an entrepreneur parolee must timely file the Application with USCIS, with the required fee and supporting documentation, demonstrating eligibility.
(2) Criteria for consideration -
(i) In general. An alien may be considered for re-parole if the alien demonstrates that a grant of parole will continue to provide a significant public benefit to the United States based on his or her role as an entrepreneur of a start-up entity.
(ii) General criteria. An alien may meet the standard described in (2)(i) by providing a detailed description, along with supporting evidence:
(A) Demonstrating that the alien continues to be an entrepreneur and that his or her entity continues to be a start-up entity; and
(B) Establishing that the alien's entity has:
(1) Received at least $500,000 in qualifying investments, qualified government grants or awards, or a combination of such funding, during the initial parole period;
(2) Created at least 5 qualified jobs with the start-up entity during the initial parole period; or
(3) Reached at least $500,000 in annual revenue in the United States and averaged 20 percent in annual revenue growth during the initial parole period.
(iii) Alternative criteria. An alien who satisfies the criteria in paragraph (2)(ii)(A) and partially meets one or more of the criteria in paragraph (2)(ii)(B) may alternatively meet the standard described in paragraph (2)(i) by providing other reliable and compelling evidence of the start-up entity's substantial potential for rapid growth and job creation.
Spouse and children of Parolee
(1) The entrepreneur's spouse and children who are seeking parole as derivatives of such entrepreneur must individually file Application. Such application must also include evidence that the derivative has a qualifying relationship to the entrepreneur and otherwise merits a grant of parole in the exercise of discretion.
(2) The spouse and children of an entrepreneur granted parole under this section may be granted parole under this section for no longer than the period of parole granted to such entrepreneur.
(3) The spouse of the entrepreneur parolee, after being paroled into the United States, may be eligible for employment authorization document (EAD) on the basis of parole, however, children will not be eligible for employment authorization. To request employment authorization, an eligible spouse paroled into the United States must file an Application.
This rule will be effective from July 17, 2017.
To learn more about visa and immigration options for start-up companies at https://adhikarilaw.com/visa-for-start-up-companies/ or you can contact us at (+1) 202 600 7742, or email us at email@example.com if you will have any question on this topic.
Note: This is a blog post by Adhikari Law PLLC and should NOT be construed as a legal advice. Changes in immigration policies and procedures are complex and may require a consultation with an experienced immigration lawyer.