Entrepreneur Parole Program (updated)

Entrepreneur Parole Program (updated)As of the December 14th announcement by the United States Citizenship and Immigration Services (USCIS), applications are now being accepted for parole under the International Entrepreneur Rule (IER), commonly called Entrepreneur Parole.

Political Resistance to the Rule

The Obama administration proposed the rule in an attempt to help international entrepreneurs grow their startups while staying in the United States temporarily. Though the rule was proposed in August 2016, the administration published a final rule on January 17, after receiving more than 750 comments. This final rule stated that it would take effect on July 17, 2017. However, just days prior to the first date to receive applications, the Trump administration published a rule delaying its effect until March 14, 2018. This delay was put in place while the new administration contemplated eliminating the program completely.

The IER is an important rule because in the United States, there is no visa category for international entrepreneurs. Company founders themselves must fit into an existing category for visa qualification, which is quite rare.

As a result of the Trump’s administration move to delay the rule, the National Venture Capital Association claimed that DHS violated the Administrative Procedure Act and sued, along with two companies co-founded by entrepreneurs from outside the United States, and two international entrepreneurs themselves. The result was the agreement by a federal district court, on December 1, and the delay rule was vacated.

Political Concerns Regarding the Rule

The DHS still plans to publish a rule in an effort to eliminate the IER, even though the court order means the USCIS is now accepting applications for IER. This means that it is imperative to consider the likely short-lived nature of this program.

Before DHS can rescind the rule, they must comply with the Administrative Procedure Act, meaning they must comply with their notice and comment requirements. This likely means a rule rescinding the program cannot be published for months, but once it is rescinded, those granted Entrepreneur Parole could have their privileges revoked. When consulting with clients who qualify for and are interested in Entrepreneur Parole, all visa options should be reviewed against this possibility for the best possible client outcome.

Requirements

The entrepreneur must demonstrate the following in order to qualify for Entrepreneur Parole:

  • The applicant/entrepreneur must have an active and central role in a start-up’s operations, where the applicant must hold at least 10% ownership. The applicant’s skillset and knowledge must assist with the substantial growth of the start-up.
  • The start-up must have been formed within the last five years, and must have received substantial capital investment within the last 18 months of at least $100,000 in government grants or $250,000 from qualified investors.
    • Government grants must be from a federal, state or local entity with a record of granting funds to start-ups, and it must be for development and research, economic development, employment creation or similar. It may NOT be a contract for goods or services.
    • A “qualified investor,” must hold U.S. citizenship or lawful permanent residence, or must be an entity majority owned and controlled (directly or indirectly) by U.S. citizens of lawful permanent residents. They must also have a substantial track record of start-up investments within the last five years that have been successful and have resulted in two start-ups creating five full-time jobs (not contractors) each, or have $500,000 revenue with a 20% average annualized revenue growth in at least two start-ups.
    • If the funding criteria is partially met, the applicant may provide evidence that the start-up has significant growth potential.

An applicant/entrepreneur who is granted parole is legally able to work for the start-up related to his parole. Any material changes regarding the company or the applicant’s role must be reported. One start up may sponsor up to three applicants/entrepreneurs.

Errors Concerning Instructions

When the announcement was made that the USCIS would begin accepting IER applications, they also released a new Application for Parole, Form I-941. After its release, the agency admitted that the form contained multiple errors. The agency is currently working with the Office of Management and Budget (OMB) to properly correct the form. In the meantime, applicants are told to complete the form using the requirements contained in the agency’s final rule.

Filing

Applicants/Entrepreneurs must file Form I-941 and include both a $1,200 filing fee and an $85 biometrics fee.

Applications should be sent to: USCIS, P.O. Box 650890, Dallas, TX 75265

For FedEx, UPS and DHL: USCIS, Attn: IER, 2501 S. State Highway 121 Business, Suite 400, Lewisville, TX 75067

Spouses and Children

Spouses and minor children may also complete Form I-131, Application for Travel Document, when the entrepreneur applies for parole. Though the USCIS has updated the form for dependents of entrepreneurs, the revised form has not yet been released at the time of this post. Spouses may complete form I-765 under the “(c)(34)” category to apply for work authorization.

Approval

Once an applicant is approved, he or she will receive an I-797 Notice of Action and an I-512L Authorization for Parole of an Alien into the United States. Travel documentation must then be obtained at a U.S. Consulate, unless the applicant is Canadian, in which case the applicant can take the documents directly to the U.S. Canadian border. Then, the entrepreneur can travel to the United States, appear before U.S. Customs and Border Protection officials at the port of entry, and request parole.

Authorization for Work

Those granted Entrepreneur Parole can receive work authorization in 30-month increments, for up to five years.

Extensions or “Re-Parole”

For an extension, entrepreneurs will need to refile Form I-941, confirming they still hold a 5% ownership in the start-up, and that they will continue to provide a public benefit to the U.S. through their role, which must be as a founder, maintaining a central and active role. The applicant must demonstrate that the start-up created at least five full time jobs of 35 hours or more per week (not contractors) during the initial parole period, or that they reached at least $500,000 annual revenue with an average growth of 20% during the same period. The entrepreneur must also demonstrate that the start-up entity received at least $500,000 in government grants or awards, or qualifying investments. As with the initial application, if the start-up does not fully meet the criteria, documentation may be provided of the start-up’s substantial growth potential and employment creation.

Overall, the Entrepreneur Parole program can be of immense assistance to those who do not qualify under any other visa category, allowing them time to establish a business and work in the United States. However, for those who have another legal avenue for work authorization in the United States, it is worth weighing the options before applying to a program with such strong political opposition, as it is likely to be a revoked.