Today, US Citizenship and Immigration Services (USCIS) published in the Federal Register a rule which would allow certain international entrepreneurs to be considered for parole (temporary permission to be in the United States) so that they may start or scale their businesses here in the United States. The rule, entitled “International Entrepreneur Rule,” seems to be somewhat broader than originally indicated by the agency. US companies and individuals that are looking to back new businesses or innovations started by foreign nationals will surely welcome this new rule as it eases some constraints related to immigration. The rule would allow the Department of Homeland Security (DHS) to use its existing discretionary statutory parole authority for entrepreneurs of startup entities whose stay in the United States would provide a significant public benefit through the substantial and demonstrated potential for rapid business growth and job creation. Under this rule, DHS may parole, on a case-by-case basis, eligible entrepreneurs of startup enterprises. In brief, eligible entrepreneurs of startup enterprises are those:
- Who have a significant ownership interest in the startup (at least 15 percent) and have an active and central role to its operations;
- Whose startup was formed in the United States within the past three years; and
- Whose startup has substantial and demonstrated potential for rapid business growth and job creation, as evidenced by:
- Receiving significant investment of capital (at least $345,000) from certain qualified US investors with established records of successful investments;
- Receiving significant awards or grants (at least $100,000) from certain federal, state or local government entities; or
- 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.
Under this rule, two separate periods of “parole,” would be created. Entrepreneurs may be granted an initial stay of up to two years to oversee and grow their startup entity in the United States. A subsequent request for re-parole (for up to three additional years) would be considered only if the entrepreneur and the startup entity meet certain requirements. The second period of parole will require the applicant to demonstrate the entity continues to operate, has substantial potential for rapid growth and job creation, the applicant continues to play an active and central role in the operations and growth of the entity, and continues to hold at least a 10% ownership interest. In addition, applicants for re-parole must show that the startup:
- Received at least $500,000 in qualifying investments, qualified government grants or awards, or a combination of such funding, during the initial parole period;
- Created at least 10 qualified jobs with the start-up entity during the initial parole period; or
- Reached at least $500,000 in annual revenue and averaged 20 percent in annual revenue growth during the initial parole period; or
- Can provide other reliable and compelling evidence of the start-up entity’s substantial potential for rapid growth and job creation.
These re-parole requirements may prove difficult to meet in such a short period of time; therefore, a prospective international entrepreneur will need a strong team of advisors to assist with planning. DHS expects approximately 3,000 applications a year once the rule is finalized, although there is no cap on the number of applications the agency can approve. The entrepreneur rule is one of the last pieces of President Barack Obama’s 2014 executive action on immigration to be implemented. The White House also indicated that DHS guidance on entrepreneurs self-petitioning for lawful permanent resident status is forthcoming. The guidance likely relates to the promised National Interest Waiver vehicle for immigrant entrepreneurs.