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Albany Legal Blog

U.S.C.I.S. Proposes the International Entrepreneur Rule

On Behalf of | Oct 3, 2016 | Immigration


I think my colleagues in the immigration bar will agree that in order to achieve your client’s immigration goal, whatever it may be (e.g., a “Green Card,” citizenship, or whatever), sometimes you need to take baby-steps (e.g., enter the U.S. on a temporary visa before you try to obtain a Green Card). I’ve over-simplified the example, but the point remains the same. And sometimes, unfortunately, there are a lot of baby-steps that need to be taken during the process.

Here’s another issue. I recently had a conversation with a client about how to get a prospective hire into the United States to he could work for the client (in the absence of any immediately available H-1B nonimmigrant worker visa numbers). I told my client he had two (2) options. First, he could wait until Spring, 2017, file a petition with to U.S. Citizenship and Immigration Services (“USCIS”) to qualify his prospective hire as an H-1B nonimmigrant worker, hope that petition would be one of the lucky 65,000 petitions selected by USCIS, and then wait for an October 1, 2017 start date. His second option would be to engage in what I described as some “creative lawyering” and hope for the best. His immediate response to the latter was, “that sounds expensive.” And it would be, with no assurances that it would work.

Alas this is often what my colleagues and I would have to explain to foreign national entrepreneurs when they want to be part of a “start-up” company, either as an investor-owner and/or as an employee. The path to permanent residence (i.e., a Green Card) is not easy, usually time-consuming (i.e., years and years and years), often expensive, and unfortunately, never a sure thing.

Well that may soon be changing, at least in terms of getting away from “creative lawyering.” On August 26, 2016, USCIS announced the proposal of a new rule, which would
allow certain international entrepreneurs to be considered for “parole” (that is, temporary permission to be in the United States) so that they may start-up or scale their businesses in the United States.

The new rule would allow DHS to use its existing discretionary statutory parole authority for entrepreneurs of startup entities whose stay in the United States would provide a significant public benefit through the substantial and demonstrated potential for rapid business growth and job creation. Under the rule, DHS may parole, on a case-by-case basis, eligible entrepreneurs of startup enterprises: (a) who have a significant ownership interest in the startup (at least 15 percent) and have an active and central role to its operations; (b) whose startup was formed in the United States within the past three (3) years; and (c) whose startup has substantial and demonstrated potential for rapid business growth and job creation, as evidenced by: (1) receiving significant investment of capital (i.e., at least $345,000.00) from certain qualified U.S. investors with established records of successful investments; (2) receiving significant awards or grants (i.e., at least $100,000.00) from certain federal, state or local government entities; or (3) partially satisfying one or both of the prior two criteria in addition to other reliable and compelling evidence of the startup entity’s substantial potential for rapid growth and job creation.

Under the rule, foreign national entrepreneurs may be granted an initial stay of up to two (2) years to oversee and grow their startup entity in the United States. In addition, USCIS would entertain a later request for re-parole (for up to three [3] additional years) if the foreign national entrepreneur and the startup entity continue to provide a significant public benefit as evidenced by substantial increases in capital investment, revenue or job creation.

In general, most commentators agree that the proposed parole period is very reasonable, and the investment thresholds appear not to be overly burdensome. Indeed, the proposed rule seems to recognize that new businesses are not all funded the same way, and provides flexibility for entrepreneurs using new or novel funding models.

While the rule is not yet final, my primary concern is next steps once an entrepreneur’s parole period comes to an end. That is, unless a foreign national has a vehicle in place to become a permanent resident, under the proposed rule, they will not be allowed to change their status from their parole status to some other type of lawful nonimmigrant status while they’re in the United States. That means the entrepreneur would have to leave the United States, try to apply for a temporary visa abroad, and then re-enter the United States (assuming this is even a viable option).

While this is not the panacea perhaps foreign national entrepreneurs would hope for, it’s definitely a step in the right direction. Stay tuned for the final rule.