USCIS Finalizes New International Entrepreneur Rule Granting Foreign Startup Entrepreneurs New Pathway

Foreign entrepreneurs can start exploring a new pathway this July thanks to the finalization of the International Entrepreneur Rule by the USCIS last Tuesday. The rule aims to grant “parole” status to qualifying foreigners so they can stay in the United States to build their startups. Up until now, the U.S. had reserved this status only for those needing a visa to work on humanitarian or medical relief. But by extending parole status to eligible entrepreneurs, the International Entrepreneur Rule raises new hope and a number of questions—especially given the timing and content.

Q: Did Trump or Obama create the new “Parole for Entrepreneur” rule?

A: Unsurprisingly, the rule was proposed by Obama and finalized at the end of 2016, right before President Trump took office. This rule, like the executive actions passed by Obama, involves agency rule-making, rather than congressional action. As a result, the new boss of DHS, President Trump, may have something to say about this new rule.

Q: Is this new rule in place now?

A: The rule is now finalized, but it does not take effect until July 17, 2017. Therefore, USCIS will not begin to accept parole applications for entrepreneurs until that date. This will also give us time to see if President Trump attempts to change the rule in any way.

Q: What are the basic requirements for the rule?

A: To be eligible, you must meet the following criteria:

• The applicant has a substantial ownership interest (at least 10%) in a company that was formed in the last 5 years
• The applicant has a central and active role in the startup
• The startup has significant potential for rapid growth and job creation
• The applicant’s stay will provide a significant public benefit to the U.S. by showing either that the company has received either significant investment of at least $250,000 from successful U.S. investors or awards or government grants in the amount of at least $100,000, or that the company partially meets the above criteria, and there is additional evidence that the startup will be successful.

Q: What is the duration of parole status for entrepreneurs?

A: The initial grant is for up to 2.5 years, and subsequent extensions can be granted for another 2.5 years.

Q: What is “parole” status?

A: Parole is a lawful immigration status granted to individuals in lieu of a visa, who need to enter the United States for humanitarian reasons or their presence in the U.S. will provide a significant public benefit. This new International Entrepreneur rule is derived from this latter authority.

Q: Why doesn’t USCIS just create an “entrepreneur visa”?

A: Because USCIS does not have the authority to create new visas. This can only be done through congressional action. Much like the deferred action programs under Obama, this new rule is as much as the President and his agency can do on their own without congressional action to create a new visa category. This new rule simply is a broader interpretation of “parole” authority, which is already granted to the agency (USCIS, which is part of DHS).

Q: To what extent does the new International Entrepreneur Rule meet the needs of foreign national entrepreneurs?

A: This is the million dollar question. To some extent, the new rule does provide an avenue for entrepreneurs who do not fit within any existing visa category. This includes entrepreneurs from countries that do not have E-2 treaties, entrepreneurs who do not own and control their companies (but still have at least a 10% ownership stake), and entrepreneurs who have not invested their own money in a company. However, the new rule still requires a very large U.S. investment and must meet several other criteria that are quite discretionary such as proof of potential for rapid growth and job creation.

Want to learn more? Read the USCIS’ announcement regarding the new International Entrepreneur Rule or review the full text of the new rule published by the Federal Registrar.
 
 
 
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