USCIS Restores Parole Program for International Entrepreneurs26 May 2021
The U.S. Department of Homeland Security (DHS) has withdrawn a 2018 notice of proposed rulemaking that would have eliminated the International Entrepreneur (IE) parole program. This program is aimed at expanding the immigration options for foreign entrepreneurs who help the U.S. economy by creating jobs, generating revenue, and attracting further U.S. investment. The program provides qualifying foreign nationals with temporary permission to enter and remain in the U.S. for up to five years to grow a start-up business that meets certain established criteria.
The IE parole program was finalized shortly before President Obama left office and was scheduled to go into effect in July 2017. However, upon taking office, the Trump Administration delayed implementation of the program, and then issued a proposed rule to eliminate it altogether. This proposed rule was never finalized, paving the way for President Biden to ensure the program remains in place indefinitely.
Criteria to Qualify Entrepreneurs for the Grant of Parole
Under the IE program, parole may be granted on a case-by-case basis to eligible entrepreneurs with startup enterprises. Eligibility for the program is limited to foreign nationals who meet all of the following criteria:
- The foreign national entrepreneur must have a significant ownership interest in the startup (at least 10 percent) and have an active and central role in its operations and future growth of the entity. The applicant’s knowledge, skills, or experience must substantially assist the entity in conducting and growing the business.
- The entrepreneur’s startup must have been formed in the United States within five years prior to filing the application.
- The entrepreneur’s startup must have substantial and demonstrated potential for rapid business growth and job creation, as evidenced by any of the following:
- Receiving significant investment of capital (at least $250,000) from qualified U.S. investors with established records of successful investments (for example, so-called “angel” investors)
- Receiving significant awards or grants (at least $100,000) from certain federal, state, or local government entities
- Partially satisfying one or both of the above criteria, in addition to other reliable and compelling evidence of the startup entity’s substantial potential for rapid growth and job creation
Criteria for ‘Qualified U.S. Investor’
To be a “qualified U.S. investor,” all of the following criteria must be met:
- The investor must be an individual who is a U.S. citizen or lawful permanent resident (LPR), or a U.S. organization that is majority owned and controlled by U.S. citizens or LPRs.
- The individual or organization must regularly make substantial investments in start-up entities that subsequently exhibit substantial growth in terms of revenue generation or job creation.
- The individual or organization must have made investments in start-up entities in exchange for equity or other forms of security, comprising a total in the preceding 5-year period of no less than $600,000.
- Subsequent to these start-up investments, at least two of these entities each created no fewer than five qualified jobs or generated no less than $500,000 in revenue with average annualized revenue growth of at least 20 percent.
Entrepreneur’s Ownership Interest and Household Income Requirement
The program contains a number of protections against abuse and related concerns. Even though the investor is only required to have at least a ten percent stake in the company, only three individuals may receive parole grants through any particular entity. The rule also contains a provision requiring that paroled entrepreneurs must maintain a household income that is at least 400 percent of the poverty level for the household size.
30-Month Initial Period and Potential 30-Month Extension
Under the program, entrepreneurs may be granted an initial stay of up to 30 months to oversee and grow the startup entity in the United States. A subsequent request for re-parole for up to an additional 30 months is possible, if it can be demonstrated that the individual’s stay in the United States continues to provide a significant public benefit.
Criteria for Re-Parole / Extension
To qualify for re-parole, the business entity must continue to be a startup, as defined in the proposal. The applicant must continue to be an entrepreneur serving a central, active role in the company and own at least five percent of the company. The company must also continue to have the potential for rapid growth and job creation. This can be shown through additional investments or grants (at least $500,000), revenue generation (at least $500,000 in annual revenue with average annualized revenue growth of at least 20 percent), job creation (at least five jobs), or alternative criteria.
The continuation of the IE parole program is a positive development for foreign national entrepreneurs. It should be noted, however, that the grant of parole is highly discretionary, and the program does not have a direct path to permanent residence beyond already established pathways outside of the parole program. Entrepreneurs interested in applying for benefits under the IE program are encouraged to schedule a consultation with a Murthy Law Firm attorney.
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