USCIS Proposes International Entrepreneur Parole Rule

After years of anticipation, the Department of Homeland Security has proposed and released the draft text of a rule which would allow international entrepreneurs parole to be able to remain and work in the U.S. while developing and growing their startup companies.    The rule aims to stimulate foreign entrepreneurs to attract capital and create U.S. jobs by allowing up to five years of staying and working in the U.S.

Why Is This Rule so Important?

Unfortunately, until now, the U.S. immigration system has not been very friendly to international entrepreneurs.   There are many U.S. visa types but none of them fit neatly the realities and the needs of modern entrepreneurs and founders.  For example, the E-2 investor visa has been an option but its availability is restricted only to citizens of certain designated treaty countries.  The H-1B work visa allows many talented professionals to work in the U.S. for an employer but there are significant challenges in the regulatory framework for H-1B for self-sponsorship.

Our office has worked with many entrepreneurs to find solutions and visa options; and we think that the new proposed entrepreneur parole rule is one more tool and option for a foreign entrepreneur seeking U.S. startup growth.   From U.S. economy standpoint – the rule aims to encourage founders to attract capital, grow revenues and create jobs.

The Proposed Rule

The draft new rule aims to create a set of criteria for seeking and obtaining parole based on creating of a U.S. start-up company.  A successful applicant will have to show that their parole into the U.S. will provide a significant public benefit because of anticipated significant job creation and growth.  The entrepreneur can work only for the eligible startup and not for other companies or employers.

Initial Parole Eligibility Requirements

To qualify for the initial 2-year parole term approval, an entrepreneur would have to show that:

• The applicant has established a new entity in the U.S. within the last three years;
• The applicant has at least 15% ownership interest and has an active and central role in the operation and growth of the company (no passive investors);
• The company can show potential for rapid growth and job creation by:
  • Receiving $345,000 or more investment from qualified US investors (venture capital, accelerators, etc.);
  • Receiving $100,000 or more from government business development or similar grants; or
  • Providing other reliable evidence that the entity would provide significant benefit to the U.S.

Renewal Requirements

The grant of parole can be renewed for another 3-year term for a maximum permitted total time of five years.  To qualify for the renewal, an entrepreneur would have to show that:

• The initial entity continues to exist and operate in the U.S. and continues to have substantial potential for growth and job creation;
• The applicant continues to have at least 10% ownership interest and contuse to play an active and central role in the operations and growth of the company;
• The company has to show that the potential for job creation and growth remains by showing:
  • During the 2-year initial parole term the company received at least $500,000 in additional funding or investment;
  • At least $500,000 in annual revenue with average annualized revenue growth of at least 20% during the 2-year parole period;
  • The company has created at least 10 full-time jobs for U.S. workers during the 2-year parole period; or
  • There are other reliable factors and evidence which supports expectation of significant public benefit.

Dependents and Spouse Work Authorization

The rule contemplates that dependents (spouses and children under 21) would be eligible for parole to stay in the U.S. together with the principal entrepreneur.   Spouses will also be eligible to apply for an unrestricted work permit.

Application Process

The proposed rule contemplates a new application form to be prepared and filed with U.S. Citizenship and Immigration Service – Form I-941, Application for Entrepreneur Parole, with filing fee anticipated in the $1,200-$1,300 range.   The process will require the submission of biometrics (digital photo and digital fingerprinting).   It is not clear at this time whether the biometrics will have to be done in the U.S. only OR they can be completed at U.S. Consulates abroad.

Dependents would file for their parole using Form I-131, Application for Travel Document.  And spouses will file for their EAD work permits using Form I-765, Application for Employment Authorization.

Proposed Rule – Review, Comment and Revision Process Underway

Please note that this is a proposed rule which is being submitted for a public comment, as required by the regulations, for a period of 45 days.   After this public comment period, DHS may revise the text of the proposed rule.

The rule will become final and effective only after the final rule is published.  We do not yet know when this date may be but we will be providing updates and timelines as soon as there available.

What is Parole?

There is a distinction between being admitted as a nonimmigrant into the U.S. on a visa and being paroled into the U.S.    The government is given a lot of discretion as to how and whether to “parole” a person into the U.S.   Technically, a parole is not an “admission” into the U.S.; rather, it is a way for the government to let people into the U.S. without having to obtain a U.S. visa stamp (or using the Visa Waiver Program).    There are a number of technical distinctions between visa admission and being paroled into the U.S. – but when an entrepreneur get approved parole, they are not expected to have to need to obtain a U.S. visa stamp in order to be able to travel to the U.S.    Similarly, this is not a new visa category.

Webinar Discussion (Recorded)

Our office has been very active in the immigrant entrepreneur community and we see great initial reaction to this proposed rule.  Over the next days and weeks we will be providing additional details and comments, as they become available.  On August 31, 2016, we held a live webinar session to discuss and analyse the proposed rule.    You can see the recording archive.