08/27/2016 - New Option for Entrepreneurs Proposed



New Option for Entrepreneurs?

Among the many different immigration proposals set forth by President Obama’s Executive Action in November 2015 was one which would provide entrepreneurs an opportunity to remain in the United States to oversee their start-ups.  This week the Department of Homeland Security (“DHS”) released a proposed rule, entitled the International Entrepreneur Rule, which would allow individuals, and their families, who met certain criteria to be admitted, to remain, and to work in the United States for an initial period of up to two years, with the possibility of an extension of up to three years.  The work permission would allow the applicant to work for the start-up entity only but would also extend work permission to his/her spouse. The public will have 45 days to comment on the rule.  For now, this is just a proposal, so stay tuned for the final results.
 
The proposed rule does not provide a new status to individuals but instead provides more flexibility to the government in granting “parole,” i.e., permission to enter the United States, for entrepreneurs who meet certain criteria and “whose entry into the United States would provide a significant public benefit through the substantial and demonstrated potential for rapid business growth and job creation.”  Such criteria include the following:
  • Business entity was recently formed, i.e., within three-years of the application date, and has substantial potential for rapid growth as evidenced by a range of documents;
  • Applicant has a substantial ownership interest, i.e., at least 15% ownership at the time of the application, and maintains at least 10% throughout the parole period, in the business entity and has an active and central role to be able to advance the business (proposal is that no more than three applicants can benefit from one entity); and
  • Business entity has
    • received substantial investment, i.e., at least $345,000 within the 365 days prior to the application, from U.S. individual or organizational investors with established records of successful investments as defined by multiple factors including job creation and revenue growth or
    • received substantial awards or grants, i.e., at least $100,000, from certain Federal, State, or local government entities.
Alternatively, if the applicant cannot fully satisfy all of the requirements above, the applicant additionally can demonstrate that his/her parole into the U.S. would “provide a significant public benefit,” i.e., rapid growth and job creation.
 
Applicants would be able to apply for an initial parole period of up to two years by filing a newly created Application for Entrepreneur Parole, Form I-941, along with supporting evidence to meet each of the criteria above and a proposed fee of $1200.  (There will be an additional fee for biometrics to be captured.)  Spouses and children would file Form I-131.  Spouses would file Form I-765 for employment authorization, while the principal applicant would not need a separate application or document for employment authorization.  Applicants however must maintain a household income which is at least 400% greater than the Federal poverty line for his/her household size as defined by the Department of Health and Human Services.  Should there be any material changes to the circumstances which served as the basis for the application approval, the applicant would need to file a new Form I-941.
 
After the initial grant, if the applicant can show that additional time would serve a “significant public benefit,” an applicant may receive up to an additional three years of parole.  An applicant must file for re-parole before the expiration of the initial parole.  Criteria include the following:
  • Business continues to be a start-up entity as evidenced by its revenue growth and investment attraction; 
  • Applicant continues to be an entrepreneur through substantial ownership (at least 10%) and central role in the business;
  • Business continues to have substantial potential for rapid growth and job creation through receipt of additional funding ($500,000 during the initial parole period), revenue generation ($500,000 in annual revenue, with at least 20% average annual growth during the parole period), or job creation (at least 10 full-time jobs filled by non-family U.S. workers for at least 1 year).
If an applicant does not meet the above fully, the applicant may provide “reliable and compelling” evidence of the business’ continued substantial potential for rapid growth and job creation.
 
As indicated from the start, the above rule and details are still proposals.  With that said, there is hope.  Please stay tuned to see how all of the above pans out.
 

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