What is the International Entrepreneur Parole and how can you get it?
The new US “Start-up Visa” option for foreign entrepreneurs
Immigration has always played an important role in US business history. Immigrants have been responsible for many of the most successful entrepreneurial projects in the United States. Between 1995 and 2005, more than 52% of new startups in Silicon Valley – home of Google, PayPal, eBay, YouTube, Yahoo – were founded by non-Americans.
That being said, the United States’ attraction to foreign talent is not exclusively recent either; any closer look at the background of Proctor & Gamble, Pfizer, or Goldman Sachs will give someone an idea of the scale of the contribution foreigners have made to American economic development.
These days, the picture is changing. Many talented young people still immigrate to the US to study at its finest universities. However, once they have graduated, they are in many cases forced to return to their home country. US immigration policies of recent years have highly constricted the number of work visas made available, and place strict requirements that many applicants cannot fulfill, irrespective of their talents.
Combined with the rise of Asian economies, the situation means that many highly skilled youngsters find it attractive to start projects in their home countries, or to choose more friendly foreign entrepreneurial jurisdictions. The facts speak for themselves. As an example, despite continuing to command in its sector, Silicon Valley is losing strength as a capital of innovation, talent, and new technologies. The number of startups founded by foreigners has fallen in 5 years by more than 10 percentage points, and Mumbai, Singapore and especially Beijing, have positioned themselves as clear competitors, absorbing talent that has chosen to forgo – or has been unable to choose – the U.S.
In order to offer some kind of counterbalance to this trend, one of the last steps taken by the outgoing Obama administration was to (try to) implement the adoption of the International Entrepreneur Rule, or the so-called “USA Startup Visa”. The final rule was published by the Homeland Security Department in the Federal Register on January 17, 2017, and was scheduled to come into effect on July 17, 2017. However, this was postponed due to the Trump administration’s more hardline approach on immigration, and for a while it seemed like it would be cancelled altogether.
Nevertheless, in December 2017, the ‘International Entrepreneur Rule’ was finally implemented following a court order, albeit with some additional restrictions.
USA Entrepreneur Parole
The US International Entrepreneur Parole Rule can grant a foreigner parole to work or set up a business in the US if doing so is of “significant public benefit”. Whether an applicant and their proposed project fulfill this requirement is determined on a case-by-case review basis by the DHS. For applications to be successful they usually need to clearly demonstrate that the individual’s business activity will increase the business growth of the United States economy, and have a positive impact on ancillary business in the country. The DHS will also have to determine beyond a reasonable doubt that the individual applicant will not pose any kind of threat or problems to the U.S.
The US Entrepreneur Parole status is not a visa; it is more accurately described as a temporary permit to live and work in the country.
The maximum period of parole status permitted is 5 years. These 5 years are split into two parts: the first 30 months, which are then renewable for 30 more months if requirements are met.
Officials have stated that this possibility to extend has been included in order to prevent situations where innovative projects with great potential for growth are ‘nipped in the bud’. The aim of the program is to increase business activity, create employment opportunities and invigorate the American economy through innovation and development.
USA Entrepreneurial Parole requirements
Parole – First 30-month period’s requirements
A foreigner who wishes to apply to USA Entrepreneur Parole, must:
- Have a monthly household income of at least 400% of the federal poverty line, and
- Own 10% or more participation of a US startup, which is operating and has been created during the previous 5 years, and
- Have a key role in the operation of the entity, demonstrating that the entrepreneur’s skills, knowledge or experience are indispensable for the development and growth of the startup. This requirement disqualifies any foreigner who is merely an investor.
At the time of application, the startup must have been funded through a qualified investment or a qualified Government grant.
Qualified investment funds must be at least USD 250,000 and have been obtained within 18 months prior to application.
To consider an investment as qualified, investors must meet the following requirements:
- Not be members of the family of the applicant or companies controlled by them.
- Have made investments in exchange for commercial interests of at least USD 600,000 in the previous 5 years.
- These investments must have generated at least two companies, five jobs to American citizens or have increased their US-source turnover by at least USD 500,000 with an annual growth rate of 20%.
You can also read this article to have an idea of the different categories of investors in the US.
Qualified Government grant or subsidy
Parole can be granted to an entrepreneur whose startup has received a qualified government grant or subsidy from the federal, state or local government. The grant must be at least USD 100,000, and be used for economic development, R&D, job creation or something similar.
If the applicant does not fully meet the requirements, but demonstrates “other reliable and convincing evidence of the substantial potential of the launching entity for rapid growth and job creation”, they may opt for US International Entrepreneurial Parole.
Re-Parole – Second 30-month period’s requirements
To qualify for the extension of the USA Entrepreneur Parole for a further 30 months, the applicant must maintain at least 5% of the shares in the company and continue to play an indispensable role in the growth of the company. In addition, evidence must be provided of the entity’s growth, has still significant growth and job creation potential and at least one of the following requirements has been met during the previous period:
- Qualified investments or donations with a total value of at least USD 500,000
- An annual turnover of at least USD 500,000, with a CAGR of 20%
- Generation of at least 5 full-time jobs for American citizens
If the applicant partially meets any of the above criteria and can demonstrate with reliable and convincing evidence the potential growth of the company, they may, at the discretion of the DHS, obtain Re-Parole. If the entity ceases its activity or, at the discretion of the DHS, is no longer deemed to provide a significant public benefit, the Parole will be revoked.
USA Entrepreneurial Parole: Required Documents
To apply for Parole, applicants must fill in and submit Form I-194 to the US Citizenship and Immigration Service (USCIS). There is no need to submit an application for employment authorization. The applicant’s spouse and children may apply for the Parole by submitting the I-131 form and may apply for employment authorization by filing form I-765.
All documents evidencing compliance with the above criteria, in addition to the applicant’s passport, must be submitted.
Only 3 entrepreneurs from the same entity can opt for the US Entrepreneurial Parole Program.
USA Entrepreneur Parole Fees
Regarding prices, the application fee is USD 1,200, plus another USD 85 to set an appointment for the biometric test. Spouse and descendants’ application fees are USD 575 and USD 85 respectively.
USA Residence Permit
The US Entrepreneurial Parole is not a visa. Therefore, prior to ending the Parole period, entrepreneurs wishing to obtain a US residence permit must apply for a visa at an American embassy or consulate abroad. There are two categories of visas: (i) non-immigrant visa, which is a US temporary residence permit, and (ii) immigrant visa, which is a US permanent residence permit and allows for the request of a US Green card.
The following section outlines the various US Entrepreneurial visas and assesses their suitability and applicability.
US Non-Immigrant Visa for Entrepreneurs
- Business (B-1): maximum period of 6 months. For commercial purposes such as meetings, negotiations or studying the possibility of opening a business in the United States. It does not allow for the generation of wages from a US entity.
- Specialty Occupation (H-1B): an initial period of 3 years, with an option for a 3-year extension (exceptions are contemplated, which may qualify some for more than one extension). The H-1B is usually geared toward employees. but you can in theory employ yourself in your own company. A University degree is required and demonstration that your job requires such qualification.
- Extraordinary Ability and Achievement (O-1A): an initial period of 3 years, with an option for 1-year extensions. It is required to demonstrate by acclamation or award that the you possess some extraordinary ability in fields like business, science, education or sports.
- Treaty Investor (E-2): an initial period of 2 years, with an option for 2-year extensions. This type of visa requires a business investment of at least USD 100,000, that applicants own at least 50% of the business or demonstrate an active management role. It is also necessary to be a national of a country that has signed an investment agreement with the US.
- Intracompany Transferee (L1): an initial period of 3 years, with possible extensions of 2 years up to 5 or 7 years for executives and specialized knowledge workers, respectively. It is aimed at directors, executives or specialized workers of foreign companies that establish parent, affiliate, subsidiary or branch companies in the United States.
US Immigrant Visa for Entrepreneurs
- Extraordinary or Exceptional Ability (EB-1): certain criteria are required to demonstrate extraordinary or exceptional ability.
- Classification and National Interest Waiver (EB-2): A job offer and a work certificate are usually required. In some cases this is not necessary if the applicant is able to demonstrate that their stay in the US is of general interest. e.g. through recognition for significant achievements and contributions to an industry by its partners, government agencies, professional or business organizations.
- Immigrant Investor Program (EB-5): Requires USD 1M investment (USD 500,000 if in a rural area) and the creation of at least 10 full-time qualified jobs for Americans. Get in contact with us for more information.
United States Citizenship
To obtain United States citizenship, a foreigner must have resided in the territory with a permanent resident status for at least 5 years and fulfill certain requirements. In the case of having a US spouse, the period of required permanent residence is shortened to 3 years.
How we can help you
Are you interested in starting a business in the U.S., or are you interested in an Entrepreneur Visa? The procedures might appear daunting at first, but we are here to help you. Fill out the form or e-mail us at [email protected], and one of our senior consultants will assist you in choosing the most suitable visa according to your situation, and work with you to fulfill the requirements throughout the application process.
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What is the USA Entrepreneur Parole Rule?
The US Entrepreneur Parole Rule allows, at the discretion of the Department of Homeland Security and by fulfilling certain requirements, the temporary stay of a foreigner who has begun a business activity in the US.
Is the USA Entrepreneur Parole a Visa?
No. It is better described as a temporary permit to live and work on a specified project in the US. After the permit’s expiration, the entrepreneur may apply for a Visa in a US Embassy or Consulate, in order to continue with their business activity.
How long is the stay permitted under the USA Entrepreneur Parole Rule?
The Parole is divided into two 30-month periods.
What are the requirements for applying to the USA Entrepreneur Parole?
The applicant must have a monthly household income of at least 400% of the federal poverty line and own at least 10% of a startup, created during the previous 5 years, as well as having an important role in its operation. A startup must have obtained funds of at least USD 250,000 from a qualified investor within 18 months’ prior to the application, or USD 100,000 from a qualified government grant/subsidy.
What are the requirements to obtain an extension of the USA Entrepreneur Parole?
The applicant must keep at least 5% of shares, and play an indispensable role in the growth of the company.
During the first parole period, a startup must have obtained at least USD 500,000 in qualified investments or donations or have an annual turnover of at least USD 500,000, with a CAGR of 20%, or have generated at least 5 full-time jobs for American citizens.
Is a simple investor eligible for the Entrepreneurial Parole?
No. Applicants must play an important role in the operation of the company.
What is a qualified investor?
An investor, who is not a family member of the applicant, and who has made investments in exchange for the commercial interests of at least USD 600,000 in the previous 5 years. These investments must have generated at least two companies, five jobs to American citizens or have increased their US-source turnover by at least USD 500,000 with an annual growth rate of 20%.
How can I apply for the Entrepreneurial Parole?
An entrepreneur must file Form I-194 to the US Citizenship and Immigration Service (USCIS), and provide all documents evidencing compliance with the requirements, in addition to their passport. It is not necessary to submit an application for employment authorization.
Does the entrepreneurial Parole cover my family?
Yes. Spouse and children may apply for the Parole by submitting the I-131 form and may apply for employment authorization by filing form I-765.
How much does the Entrepreneurial Parole cost?
The application costs USD 1,200, with an additional USD 85 for setting an appointment for the biometric test. The requests of the spouse and of each of the children have a cost of USD 575 and USD 85 respectively.
What is the Entrepreneur US temporary visa?
There are different kinds of Entrepreneur visas available:
Business Visa (B1), 6 months. Commercial purposes such as meetings, negotiations.
Specialty Occupation (H1-B), up to 6 years. Self-employment in your own company.
Extraordinary Ability and Achievement (O-1A), 3 years, with extensions of 1 year. It is necessary to demonstrate, through acclamation or award, that applicants possess some extraordinary ability in fields like business, science, education or sports.
Treaty Investor (E-2), 2 years, with extensions of 2 years. Investment of at least USD 100,000 in starting a business, and owning at least 50% of the business.
Intracompany Transferee (L1): up to 5-7 years. Executives, directors or workers of foreign companies that establish parent, affiliate, subsidiary or branch companies in the United States.
What are the Entrepreneur USA permanent resident permits?
Extraordinary or Exceptional Ability (EB-1): demonstrate extraordinary or exceptional ability.
Classification and National Interest Waiver (EB-2): demonstrate that the applicant’s stay in the US is of general interest.
Immigrant Investor Program (EB-5): USD 1M investment (USD 500,000 if in a rural area) and create at least 10 full-time qualified jobs for American.
How to obtain USA Citizenship?
A foreigner who has been a permanent resident for at least 5 years and fulfills certain requirements is eligible to apply for US Citizenship. In the case of having a US spouse, the period of required permanent residence is shortened to 3 years.
Any other questions? Contact us through [email protected] or check the Federal Register’s International Entrepreneur Rule publication and the U.S. Citizenship and Immigration Services website.
And as always, we will update this information if there is any change in the regulation. To stay up-to-date with news, new articles, and services you can subscribe to our newsletter and follow us on LinkedIn.