Proposed New Rule for Entrepreneurs

October 20, 2016 § Leave a comment

On November 21, 2014, Department of Homeland Security (DHS) Secretary Johnson directed USCIS to “propose a program that will permit DHS to grant parole status, on a case-by-case basis, to inventors, researchers, and founders of start-up enterprises who may not yet qualify for a national interest waiver, but who have been awarded substantial U.S. investor financing or otherwise hold the promise of innovation and job creation through the development of new technologies or the pursuit of cutting-edge research.”
In response, the new proposed “International Entrepreneur Rule” was published on August 31, 2016 in the Federal Register, and the government accepted public comments until October 17, 2016 .  The proposed rule allows immigrant entrepreneurs to stay in the country on a parole basis. It is intended to allow entrepreneurs who are making significant contributions to US business and job growth to stay within the United States on a temporary parole basis of up to five years.

To qualify, the applicant must have significant ownership (at least 15%) in a business within the US that was founded within the last three years. The business must have received an investment(s) within the last year of $345,000 or have received $100,000 in government awards or grants. If these qualifications are met and the application is approved, the parolee could stay in the country for up to two years and is automatically granted employment authorization at his/her start-up entity. Small business with limited growth potential created solely to provide employment to the entrepreneur and his/her family will not qualify.

The parolee could receive another three years of residency if s/he receives at least $500,000 in investments, government rewards or grants, or a combination; OR creates at least 10 new jobs for US citizens or legal residents within the initial two year parole period; OR if the parole received at least $500,000 in increased revenue and achieved at least a 20% growth during the initial parole period. To qualify for reparole, the parolee must still have maintained at least a 10% ownership in the company.

The parole’s spouse and children must apply for parole status separately and by proving their relationship to the entrepreneur. After being paroled into the US, the entrepreneur’s spouse is eligible to apply for employment authorization. No employment authorization will be granted to the children.

There are concerns that this rule has created too difficult of a standard for new entrepreneurs such as students on F-1 status who are starting a business as a part of their MBA studies. The qualifying investment threshold of $345,000, for example, may be too onerous and greatly limits the pool of potential applicants.  Many of the proposed criteria for both an initial grant of parole and re-parole could only be satisfied by a company in a fairly advanced stage of operations.  However, the proposed rule presents a great opportunity for the immigration community, and it will be worthwhile to see what comes of it in the months to come.


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