Breaking News: USCIS to Implement the International Entrepreneur Rule
On December 14, 2017, U.S. Citizenship and Immigration Services (USCIS) announced that it would be taking steps to implement the International Entrepreneur Rule (IER). The IER establishes new regulatory provisions that guide the use of parole with respect to entrepreneurs of start-up entities, and is designed to provide an unlimited number of international entrepreneurs with a new avenue to apply for parole, enter the United States, and use American investment to establish and grow a start-up business. Applicants must be able to demonstrate that his or her parole would provide a “significant public benefit” to the U.S., because he or she is the entrepreneur of a new start-up entity in the States that has potential for rapid growth and job creation.
The IER is derived from section 212(d)(5) of the Immigration and Nationality Act, which grants the Secretary of Homeland Security the discretionary authority to parole individuals into the U.S. temporarily, on a case-by-case basis, for urgent humanitarian reasons or “significant public benefit.” In implementing this new rule, DHS is hopeful that it will increase and enhance entrepreneurship, innovation and job creation in the U.S. DHS believes that the IER will encourage foreign entrepreneurs to create and develop start-up entities with high growth potential in the U.S., which are expected to facilitate research and development in the country, create jobs for U.S. workers and otherwise benefit the U.S. economy through increased business activity, innovation and dynamism.
To apply for parole under the IER, an applicant must be able to demonstrate three things: (1) formation of a new entity; (2) that the applicant is an entrepreneur; and (3) significant U.S. capital investment or government funding. An applicant who meets this criteria may be considered for a grant of parole lasting up to 30 months based on the significant public benefit that would be provided by the applicant’s parole into the U.S.
1. Formation of a new entity
An applicant needs to show that he or she recently formed a new entity in the U.S. that has done business since its creation and has substantial potential for rapid growth and job creation. A business may be considered “recently formed” if it was created within the five years immediately preceding the date of filing the initial parole application.
2. The applicant is an entrepreneur
An applicant must be an entrepreneur of a start-up entity and be well-positioned to advance the entity’s business. The applicant needs to demonstrate that he or she is not merely an investor of the recently formed entity. To meet this standard, an applicant may provide evidence that he or she: (1) possesses a significant (at least 10 percent) ownership interest in the entity at the time of adjudication of the initial grant of parole; and (2) has an active and central role in the operations and future growth of the entity, such that his or her knowledge, skills or experience would substantially assist the entity in conducting and growing its business in the U.S.
3. Significant U.S. capital investment or government funding
An applicant must demonstrate the entity’s substantial potential for rapid growth and job creation. This can be done by showing (a) investment from established U.S. investors; (b) government grants; or (c) alternate criteria.
a. Investment from established U.S. investors – An applicant may show that the entity has received significant investment of capital from certain qualified U.S. investors with established records of successful investment. Generally, this can be satisfied by showing that the start-up entity has received investments of capital totaling $250,000 or more 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.
b. Government grants – An applicant may show that the start-up entity has received significant awards or grants from federal, state or local government entities with expertise in economic development, research and development, or job creation. Generally, an applicant can meet this standard by showing that the start-up received monetary awards or grants totaling $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.
c. Alternative criteria – An applicant who partially meets one or more of the above criteria related to capital investment or government funding may still be considered if he or she provides additional reliable and compelling evidence that they would provide a significant public benefit to the U.S. Such evidence must serve as a compelling validation of the entity’s substantial potential for rapid growth and job creation.
If you are interested in learning more or applying for the International Entrepreneur Rule, please contact our office today to schedule a consultation with one of our knowledgeable attorneys.