DHS Finalizes Entrepreneur Parole Rule, Expanding Options for Foreign National Entrepreneurs

On January 17, 2017, the U.S. Department of Homeland Security (DHS) published its final rule entitled “International Entrepreneur Rule.” This rule follows President Obama’s November 14, 2014 promise to use existing statutory authority to leverage current immigration law to encourage entrepreneurship and economic growth. The new rule will become effective on July 17, 2017. It remains to be seen if the new Trump administration will introduce any changes.

Once effective, the rule would allow DHS to use existing discretionary statutory parole authority to allow qualified entrepreneurs to stay in the US and work for the start-up entity. It is intended for individuals whose stay in the U.S. would provide a significant public benefit to the U.S. based on their role as entrepreneurs of start-up entities. No more than three entrepreneurs may receive parole with respect to any one qualifying entity. While eligibility will be reviewed on a case-by-case basis, the rule is designed for entrepreneurs:

  1. Who have a significant ownership interest in the start-up (at least 10 percent for initial parole and at least 5 percent for re-parole) and have an active and central role to this operation;
  2. Whose start-up was formed in the United States within the past five years; and
  3. Whose start-up has substantial and demonstrated potential for rapid business growth and job creation, as evidenced by:
  • Having received, within 18 months immediately preceding the filing of an application for initial parole, significant investment of capital amounting to at least $250,000 (a change from the proposed rule, which required $345,000) from established U.S. investors;
  • Having received, within 18 months immediately preceding the filing of an application for initial parole, an amount of at least $100,000 through certain “qualified” government awards or grants; or
  • Partially satisfying one or both of the above criteria in addition to other reliable and compelling evidence of the startup entity’s substantial potential for rapid growth and job creation.

An application for parole would be filed on the new Form I-941, Application for Entrepreneur Parole, with an application fee of $1,200 and an additional biometrics fee required for a background check to be conducted. Note that applications cannot be filed prior to the effective date which is July 17, 2017.

If parole is approved, entrepreneurs (and their spouses and minor, unmarried children) would be granted an initial stay of up to 30 months. A subsequent request for re-parole for an additional 30 months would be considered only if the entrepreneur and the start-up entity continue to provide significant public benefit as evidenced by substantial increases in capital investment, revenue or job creation.

Entrepreneurs who receive parole would be granted employment authorization incident to status (but only with respect to the qualifying start-up entity) and will not need to apply for a separate Employment Authorization Document (EAD) following their entry to the United States.  Employment authorization would be available for the accompanying spouses, but not for children.

DHS will not accept applications until the July 17, 2017 effective date. However, there are certain steps that foreign national entrepreneurs can take in anticipation of the effective date. Therefore, it may be useful for entrepreneurs interested in starting a U.S. enterprise to consult with immigration counsel in order to evaluate strategy.

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