For years, immigration lawyers have advocated for more options for startup founders.
Immigrant entrepreneurs are responsible for some of the most celebrated companies in US history including Google, AT&T & Tesla. Immigrant lead startups offer innovative solutions and products while employing hundreds of thousands of US workers.
Unfortunately—despite all the economic benefits they produce—our immigration system is not super accommodating to foreign born entrepreneurs.
Currently, the E2 Visa is the closest thing we have to a startup visa. The E2 Visa allows entrepreneurs— who have made a substantial investment—to grow a their company in the US.
While the E2 Visa is great—it is limited to nationals of countries that have an E2 treaty with the US.
Also, the E2 Visa does not typically work for those who raise venture capital or hold less than 50% of the equity in their startup.
In addition to the E2 visa, there are other possible options for startup founders, such as the L1 visa, the O1 visa, the National Interest Waiver Green Card and the Eb1a Green Card. Unfortunately, most entrepreneurs find these options to be overly restrictive and unworkable.
Thankfully, we now have another option — The International Entrepreneur Rule(AKA Parole For Entrepreneurs)
This rule was originally announced by President Obama in 2014. Then, it was axed by the Trump administration. Recently, President Biden resurrected the rule as part of his immigration agenda.
While it is far from perfect, the rule offers another option for talented entrepreneurs who want to grow their business in the US.
In this overview, I discuss the international entrepreneur rule including the benefits, requirements, and the process for applying.
Pros and Cons of The International Entrepreneur Rule
The option to obtain parole under the International Entrepreneur Rule has some advantages. These include…
- No nationality restrictions(unlike the E2 visa which is limited to nationals of countries with an E2 treaty)
- No requirement to maintain a majority stake in the company
- Spouses qualify for work authorization
The primary drawbacks of the International Entrepreneur Rule relate to the requirements. The challenging requirements include:
- Outside investors in the startup must be “qualified” meaning that they have invested at least $600,000 in venture capital in the past 5 years.
- The household income of the entrepreneur must be above 400% of the federal poverty guidelines(to qualify for re-parole). This is problematic for many entrepreneurs who invest capital back into the business instead of drawing a salary.
- The entrepreneur must demonstrate that the company provides a significant public benefit.
- The entrepreneur’s period of stay in the US is limited to a five year period.
The Primary International Entrepreneur Rule Requirements
The “Entrepreneur” Definition
The entrepreneur who is applying for parole must show that they meet the definition of “entrepreneur.” This requires a showing that the entrepreneur…
- Has a central or active role in the “startup entity”
- Is well positioned to advance the company
- Has a substantial ownership interest in the company(10% for initial application 5% for re-parole applications)
The “Startup Entity” Definition
The startup must meet the definition of a “startup entity” which is defined as…
A U.S. business entity that was recently formed, has lawfully done business during any period of operation since its date of formation, and has substantial potential for rapid growth and job creation. An entity…may be considered recently formed if it was created within the 5 years immediately preceding the filing date… 8 CFR 212.19 (a)(2).
The Qualifying Investment/Grant
In order to obtain a period of parole under the International Entrepreneur Rule, the Entrepreneur must have received a qualified investment or government grant for their startup
A “qualified investment”= an investment from one or more “qualified investors” that totals $250,000 or more. The rule explicitly states that parents, spouses, sons and daughters cannot provide the capital. Also, the investment must have been made in the 18 months preceding the application.
“Qualified Investor”= an individual or organization that has invested at least $600,000 in start-ups(in exchange for equity) during the past five years.
Qualified Government Award or Grant
A qualified government award or grant is…
An award or grant for economic development, research and development, or job creation (or other similar monetary award typically given to start-up entities) made by a federal, state, or local government entity (not including foreign government entities) that regularly provides such awards or grants to start-up entities…8 CFR § 212.19 (a)(3).
How To Apply
Applicants who are requesting entrepreneur parole can file using form I-941 along with a fee of $1285(filing and bio metrics fee). The heavy lifting of the application will involve gathering the supporting documents to clearly demonstrate how the requirements have been met.
Applying For Re-parole
After the initial parole application is approved, the entrepreneur will have a 30 month period of time before applying for re-parole—which will give the entrepreneur an additional 30 months.
At the time of the re-parole application, the entrepreneur must demonstrate that they still meet the definition of entrepreneur. Also, the company must continue to meet the definition of a startup.
In addition to the foundational requirements, the entrepreneur must prove that they have met performance targets in order to qualify for re-parole. Specifically, the entrepreneur must show that their start-up has:
- Received at least $500,000 in qualifying investments and/or grants during the initial 30 month period;
- Created at least five qualified jobs;
- Reached at least $500,000 in annual revenue in with a minimum 20% growth rate; OR
- Continues to show substantial potential for rapid growth and job creation
Parole under the international entrepreneur rule is a great option for those who can meet the restrictive requirements.
While this option is not perfect for everyone, hopefully the decision by the Biden administration to resurrect the international entrepreneur rule will lead to additional, long overdue US immigration options for amazing foreign national entrepreneurs and their families.
If you have any questions or comments about the international entrepreneur rule, please feel free to reach out to me at email@example.com
Benjamin Frear, Esq.
Immigration Lawyer For Entrepreneurs and High Growth Companies