USCIS Publishes Final Rule for Granting Parole to Entrepreneurs of U.S. Start-ups

The Department of Homeland Security (DHS) recently published a final rule that will allow the United States Citizenship and Immigration Services (USCIS) to grant parole on a case-by-case basis to certain foreign nationals who own and manage start-ups in the United States. The final rule, which is effective July 17, 2017, aims to increase and enhance entrepreneurship, innovation, and job creation by targeting high-growth firms owned by foreign nationals.

The Proposed Criteria for Parole

The final rule is based on USCIS’s legal authority and discretion to grant parole to foreign nationals that can demonstrate a significant public benefit. To be granted parole under the final rule, the applicant would be required to demonstrate that he or she provides a significant public benefit by evidencing that:

  • He or she has a significant ownership interest (of at least 10%) in a start-up entity and has an active and a central role in the operation of the start-up (not just an investor);
  • The start-up was formed in the United States within the past five years prior to the filing of the initial application; and
  • The start-up has a substantial and demonstrated potential for rapid business growth and job creation as evidenced through substantial outside investments in the start-up.

No more than three entrepreneurs can receive a grant of parole from the same qualifying company.

The Benefit of Parole

The grant of parole would not confer any legal immigration status. Rather, parole would allow the foreign national—and his or her spouse and children, if they apply for derivative benefits—to stay in the U.S. without immediate risk of being deported to his or her home country. The final rule allows parole for a period of up to five years (30 months if approved with the first application, and an additional 30 months if granted an extension (discussed below)). The grant of parole would not prohibit the parolee from finding other means to adjust status or obtain a nonimmigrant (temporary) or immigrant (permanent) visa.

The foreign national entrepreneur with an approved application will receive employment authorization incidental to his or her parole if granted, but that employment authorization would be limited to employment with the qualifying start-up.

The Minimum Investment Threshold

A critical part of the criteria, and one that would potentially prove most challenging for new start-ups, is the requirement to provide evidence of substantial and demonstrated potential for rapid business growth and job creation. The final rule states that the following minimum investment thresholds are required:

  • $250,000 or more in investment from established U.S. investors (such as venture capital firms, angel investors, or start-up accelerators) with a history of substantial investment in successful start-up entities, or
  • $100,000 or more from government entities that typically provide such funding to U.S. businesses for economic, research and development, or job creation purposes.

If the applicant’s start-up does not meet either of the minimum investment thresholds, USCIS may still grant parole if the applicant submits “reliable and compelling” evidence of the start-up entity’s substantial potential for rapid growth and job creation. This catch-all nevertheless requires that the applicant demonstrate that the start-up has received a substantial level of investment, albeit less than the minimum thresholds amount.

Opportunity to Extend Parole

Entrepreneur parolees may apply for a 30 month (2.5 year) extension of parole. The requirements for the re-parole application differ from those of an original application, and some of the requirements include:

  • That the foreign national own at least a 5% ownership in the start-up entity and still have a central role in the operation of the start-up at the time of the re-parole application; and
  • Evidence that the qualifying start-up earned at least $500,000 in annual revenue and averaged 20% annual revenue growth, received $500,000 in qualifying funding, or created 5 full-time qualifying jobs during the initial parole period.

The final rule is available here.

Categories: Immigration Blog