Government May Offer Foreign Investors ‘Parole’ to Enter US to Start New Business
Government May Offer Foreign Investors
‘Parole’ to Enter US to Start New Business
A new “parole” program may soon be offered to international entrepreneurs. It has nothing to do with the American judicial system and everything to do with improving this nation’s business climate.
The proposal, now being crafted by the U.S. Citizenship and Immigration Services (USCIS) and the Department of Homeland Security (DHS), would create a set of criteria encouraging international investors to come to the US and form a new start-up business. The rule aims to stimulate foreign entrepreneurs to attract capital and create jobs by allowing up to a five-year stay to work in the US.
The new rule would require that the applicant only work for the eligible startup and not for other companies or employers.
Unlike an investor visa where the entrepreneur must show infusion of capital to the business formed from his or her own resources, an international entrepreneur seeking parole must show that the start-up business has potential for “rapid growth and job creation.”
The three alternative ways for the applicant to prove this are:
- The business has significant US capital investment of $345,000 or more from established American firms such as venture capital companies, angel investors and the like who have a history of substantial investment in successful start-up entities.
- The business received government funding of grants totaling $100,000 or more.
- Any reliable and compelling evidence that will prove significant public benefit to the United States.
To qualify for the initial 2-year parole term, an entrepreneur must show that:
- The applicant has established a new entity in the U.S. within the last three years.
- The entrepreneur has at least 15% ownership interest and has an active and central role in the operation and growth of the company (no passive investors).
The company can show potential for rapid growth and job creation by:
- Receiving $345,000 or more from qualified US investors (venture capital, accelerators, etc.).
- Receiving $100,000 or more from government business development or similar grants.
- Providing other reliable evidence that the entity would provide significant benefit to the US.
The new rule is needed because until now, the US immigration system has not provided international entrepreneurs a fitting method of coming to the US for a business start-up. There are many U.S. visa types but none of them fit neatly the realities and the needs of modern entrepreneurs and founders.
For example, the E-2 investor visa has been an option, but its availability is restricted only to citizens of certain designated treaty countries. The H-1B work visa allows many talented professionals to work in the US for an employer, but there are significant challenges in the regulatory framework for H-1B for self-sponsorship.
The initial 2-year parole can be renewed for three years for a maximum permitted total time of five years. To qualify for renewal, an entrepreneur would have to show that:
- The initial entity continues to exist and operate in the US and continues to have substantial potential for growth and job creation.
- The applicant continues to have at least 10% ownership interest and continues to play an active and central role in the operations and growth of the company.
The company has to show that the potential for job creation and growth remains by showing:
- During the 2-year initial parole term the company received at least $500,000 in additional funding or investment.
- At least $500,000 in annual revenue with average annualized revenue growth of at least 20% during the 2-year parole period.
- The company has created at least 10 full-time jobs for U.S. workers during the 2-year parole period.
- There are other reliable factors and evidence which supports expectation of significant public benefit.
The rule contemplates that dependents (spouses and children under 21) would be eligible for parole to stay in the US together with the principal entrepreneur. Spouses will also be eligible to apply for an unrestricted work permit.
The proposed rule contemplates a new application form to be prepared and filed with US Citizenship and Immigration Service – Form I-941, Application for Entrepreneur Parole, with filing fee anticipated in the $1,200-$1,300 range. The process will require the submission of digital photo and digital fingerprinting)
Dependents would file for their parole using Form I-131, Application for Travel Document. And spouses will file for their EAD work permits using Form I-765, Application for Employment Authorization.
The proposed rule is being submitted for a public comment, as required by the regulations, for a period of 45 days. After this period, DHS may revise the text of the proposed rule.
The regulation will become effective only after the final rule is published. Implementation is expected before the end of the year.