DHS Announces New International Entrepreneur Parole Option for Startup Founders

international-flags**Please note, on July 10, 2017, the Department of Homeland Security postponed implementation of the Entrepreneur Parole Rule March 2018.

On January 17, 2017, the U.S. Department of Homeland Security (DHS) published a new immigration avenue for foreign entrepreneurs who benefit the U.S economy. The “International Entrepreneur Rule” will serve as a pathway for qualified investors and foreign entrepreneurs to develop business enterprises which have significant public benefit in the United States.

This exciting news for start-ups and foreign entrepreneurs comes as a much welcomed development for those frustrated by the lack of immigration options available through the existing U.S. visas, which generally are not oriented to companies that are still in start-up mode.

Requirements

uscisThis new rule will be effective on July 17, 2017 and it will allow certain international entrepreneurs, on a case-by-case basis, to remain in the United States for up to five years in order to start or expand their businesses.  To secure the parole, three prerequisites are required: (1) applicant must submit the required application; (2) the application must be approved; and (3) a physical entry into the United States with the parole status is required.

An applicant must also show that he or she has a substantial ownership interest in such an entity (10%), has an active and central role in the entity’s operations, and would substantially further the entity’s ability to engage in research and development or otherwise conduct and grow its business in the United States. The grant of parole is intended to facilitate the applicant’s ability to oversee and grow the start-up entity. No more than three entrepreneurs may receive parole with respect to any one qualifying start-up entity.

Although this rule has its limitations because it does not provide the applicant with a visa, it allows certain individuals to pursue qualifying business endeavors in the United States. Accordingly, it is important to keep certain key things in mind:

  • The Applicant Must Qualify as an “Entrepreneur” who is connected with a start-up entity that is well positioned to advance the entity’s business. He or she must own at least ten percent (10%) of the entity at the time of the application, and must demonstrate that he or she has an active role in the operations and future growth of the entity. Thus, a passive investor would not qualify for this option.
  • The Start-Up Entity Must be “Recently” Formed. To qualify as a “start-up” entity, the enterprise must have been formed within the five (5) years immediately preceding the date of filing the initial parole application, and it must have lawfully done business since its creation.
  • The Entity Must Demonstrate Substantial Potential for Rapid Growth and Job Creation. The regulation itself provides applicants with a variety of ways and parameters to demonstrate that it has substantial potential for rapid growth and job creation.
    • For example, investments of capital totaling at least $250,000 from U.S. investors, such as venture capital firms, angel investors, or start-up accelerators with a history of substantial investment in successful startup entities, can demonstrate to the United States Citizenship and Immigration Services (USCIS) that the Startup has potential for growth and job creation.
    • In addition, awards or grants of at least $100,000 from federal, state, or local government entities with expertise in economic development, research and development, or job creation can also be used as supporting evidence of potential success.
  • Parole Application and Filing Fee. The applicant must prepare a form I-941 and provide USCIC with corresponding supporting evidence and an application fee of $1,285.

Duration

The initial grant of parole will last for 30 months (2.5 years), and parole beneficiaries will international-movers-and-packersbe able to apply for an additional thirty (30)-month renewal (2.5 more years).  However, parole cannot be accomplished until the applicant physically enters the United States.  In addition, if an applicant is currently present in the United States on a valid visa and applies for and receives approval of a parole application, he or she must exit the U.S. and re-enter with parole in order to assume this new status.  An entrepreneur may qualify for re-parole if the start-up entity created at least 5 qualified jobs with the start-up entity during the initial parole period.

The DHS retains the authority to revoke any such grant of parole at any time as a matter of discretion, or if DHS determines that parole no longer provides a significant public benefit, such as when the entity has ceased operations in the United States or DHS has reason to believe that the approved application involves fraud or misrepresentation. See new 8 CFR 212.19(k).

Where Can the Parole Recipient and Spouse Work?

Upon approval to the United States, the entrepreneur will be authorized to work for the start-up entity, and will not be required to apply for an Employment Authorization Document.  However, the applicant will not be able to work for any other employer, and must continue working for the startup in order to maintain the status. Spouses and dependent children (under 21) of the parole beneficiary are entitled to apply for derivative parole status and, once granted, to remain in the U.S. for the same period of time as the principal parole beneficiary.  The spouse will be eligible for employment authorization as well.

Although it is not necessary to be present in the U.S. to apply for parole, international entrepreneurs outside the U.S. may apply, but as a practical matter, it may be difficult for many entrepreneurs outside the country to meet all the required criteria if they have not yet worked for the start-up entity in the U.S.

What Happens When Parole Expires?

At any time prior to reaching the five-year limit for parole under this final rule, such individuals may apply for any immigrant or non-immigrant classification for which they may be eligible (such as classification as an O-1 non-immigrant, or as a lawful permanent resident pursuant to an EB-2 National Interest Waiver). Because parole is not considered an admission to the United States, parolees are ineligible to adjust or change their status in the United States under many immigrant or non-immigrant visa classifications.

For example, if such individuals are approved for a non-immigrant or employment-based immigrant visa classification, they would generally need to depart the United States and apply for a visa with the Department of State (DOS) for admission to the United States as a non-immigrant or lawful permanent resident.

How Does Parole Status Compare to the H-1B Visa?

enter-usa-h1b-visaIn contrast to the very strict minimum wage requirements associated with the H-1B Specialty Occupation visa, there is no required minimum wage obligation for the parole beneficiary.  In order to maintain parolee status, the parole beneficiary must maintain a household income that is greater than 400 percent (400%) of the federal poverty line for his or her household size, as defined by the Department of Health and Human Services (HHS).  In addition, there is no lottery or deadline by which to apply for this status.

Do you qualify for Parole Status?

If you think that you may qualify for Parole Status, schedule a complimentary consultation with The Grady Firm’s immigration attorneys so that we can prepare your application to be one of the first in line when this status becomes available in July 2017.

To schedule a complimentary 15-minute consultation with our immigration attorneys, call +1 (323) 450-9010, or schedule an appointment online.

About The Grady Firm

JGrady Firm-Logo-2016The Grady Firm, P.C. attorneys help individuals, families, employees, business owners, and investors obtain non-immigrant and immigrant visas, as well and Green Cards and citizenship based on family relationships, investment, or employment.  In addition, The Grady Firm attorneys help foreign entrepreneurs establish a U.S. presence, form a corporate entity, and obtain the appropriate visas for their owners and employees.

*This article is for informational purposes only, and does not constitute legal advice or create an attorney-client relationship. This article does not make any guarantees as to the outcome of a particular matter, as each matter has its own set of circumstances and must be evaluated individually by a licensed attorney.

 

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About gradyfirm

The Grady Firm attorneys specialize in helping businesses grow and succeed through employment, business, immigration, and intellectual property law advising for clients in California. In addition, we help foreign entrepreneurs establish a US presence and obtain the appropriate visas for their owners and employees. WE PROVIDE THE FOLLOWING BUSINESS SOLUTIONS: BUSINESS ADVISING: Business formation, contract drafting, coaching/advising, succession planning, lease review, and contract negotiation. EMPLOYMENT LAW: We teach employers how to become compliant with California employment law, draft Employee Handbooks, and providing sexual harassment training. We also help resolve disputes between employers and employees regarding wage and hour, discrimination, and harassment issues. IMMIGRATION: We help build business work forces and reunite families by preparing visa, Green Card, and citizenship applications based on family relations, employment, and investment. INTELLECTUAL PROPERTY: trademarks, copyright The Grady Firm has offices in Beverly Hills and San Diego, California; and serves clients remotely from across the globe. Our attorneys are licensed to practice immigration law in all 50 states. Learn more about us at www.gradyfirm.com.

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