What is and how to get the International Entrepreneur Parole
The new US “Start-up Visa” option for foreign entrepreneurs
Immigration has played an important role in US business history. Some relevant success entrepreneurship projects in the United States have been carried out by immigrants. Between 1995 and 2005 more than 52% of new startups in Silicon Valley were founded by non-American, and there we have Google, PayPal, Ebay, YouTube, Yahoo or WhatsApp among many others. But this attraction of the United States for foreign talent is not exclusively recent, eyeing the background of Proctor & Gamble, Pfizer, or Goldman Sachs, we can get an idea of the contribution of foreigners to the American economic development.
Currently the picture is changing. Many talented young people still immigrate in US to study in their best Universities. But, once they are graduated, in many cases, they are forced to return to their home country. The US immigration policies in recent years, offering a limited number of work visas and strict requirements, often unassuming, have not helped.
Together with the rise of Asian economies, makes many of these highly skilled youngsters find attractive to start their projects in their home country or to choose more friendly foreign entrepreneurial jurisdictions. The facts are there. As an example, despite continuing to command in its sector, Silicon Valley is losing strength as capital of innovation, talent and new technologies. The number of startups founded by foreigners has fallen in 5 years more than 10 percentage points, and Mumbai, Singapore and especially Beijing, have positioned as clear competitors.
For this reason, one of the last steps taken by the outgoing Obama administration was the implementation of the new International Entrepreneur Rule. The so-called by the media “USA Startup Visa”. The final rule was published by the Homeland Security Department in the Federal Register on January 17, 2017 and will become effective on July 17, 2017. It would allow the stay of foreign entrepreneurs under a Parole regime, if they are fulfilled a set of specific requirements that we will see below. Enough or not enough? Judge for yourselves.
USA Entrepreneur Parole
As I said, last January 17 the Homeland Security Department (DHS) published the International Entrepreneur Parole Rule in the Federal Register. The rule that will become effective on July 17, 2017. It will allow, at the discretion of the DHS, to grant a foreigner the parole if it is of “significant public benefit”. Facilitating the stay in the United States of a foreigner who is engaged in a legal entrepreneurship activity that, in the criterion of the DHS, increases the business growth of the country.
The US Entrepreneur Parole status is not a visa, it is like a temporary permit to live and work in the country.
The maximum period is 5 years. Divided into an initial period of 30 months, renewable in 30 more months if requirements are met.
Officials said the standard aims to not clip the wings to innovative projects with great potential for growth. Increase business activity, create employment opportunities and invigorate the American economy.
USA Entrepreneurial Parole requirements
Parole – First 30-month period requirements
The foreigner who wishes to apply to USA Entrepreneur Parole, must:
- Have 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 skills, knowledge or experience are indispensable for the development and growth of the start up . This requirement discards 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 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 US.
Qualified Government grant or subsidy
Parole will be granted to entrepreneur whose startup has received qualified government grant or subsidy from the federal, state or local government. Grant must be at least USD 100,000, for economic development, R & D, job creation or similar.
If the applicant does not fully meet the requirements, but demonstrates, textual words of the publication, “other reliable and convincing evidence of the substantial potential of the launching entity for rapid growth and job creation”, may opt for the US International Entrepreneurial Parole.
Re-Parole – Second 30-month period 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 and continue to play an indispensable role for the growth of the company. In addition, it must be provided evidences 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
- 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 of the potential growth of the company, he may, at the discretion of the DHS, obtain the Re-Parole. If the entity ceases its activity or, at the discretion of the DHS, no longer provides a significant public benefit, Parole will be revoked.
USA Entrepreneurial Parole Required Documents
To apply for Parole, it is must to file the Form I-194 to the US Citizenship and Immigration Service (USCIS). There is no need to submit an application for employment authorization. The spouse and children may apply for the Parole by submitting the I-131 form, and may apply for the employment authorization filing the form I-765.
All documents evidencing compliance with the above criteria, in addition to the passport, must be submitted.
Only 3 entrepreneurs from the same entity can opt for US Entrepreneurial Parole Program.
USA Entrepreneur Parole Fees
Regarding to prices, the application fee is USD 1,200, adding 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 ending the Parole period, entrepreneurs wishing to obtain an US residence permit must apply for a visa at any 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 the request of the US Green card. Next, we will take a look at the most suitable Entrepreneur USA visas.
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 is not allowed to have any wages from an US entity.
- Specialty Occupation (H-1B): initial period of 3 years, with option to a 3-year extension (exceptions are contemplated that may qualify for more than one extension). The H-1B is usually geared toward employees. But you can employ yourself in your own company. It is required a University graduation and demonstration that your job requires such graduation.
- Extraordinary Ability and Achievement (O-1A): initial period of 3 years, with option to 1-year extensions. It is required to demonstrate by acclamation or award to possess some extraordinary ability in fields like business, science, education or sports.
- Treaty Investor (E-2): initial period of 2 years, with option to 2 years’ extensions. It requires a business investment of at least USD 100,000. Own at least 50% of the business or demonstrate an active management role. It is necessary to be a national of a country that has signed an investment agreement with the US.
- Intracompany Transferee (L1): 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 company 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 is not necessary if it is demonstrated that the applicant’s stay in the US is of general interest. e.g. 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 create at least 10 full-time qualified jobs for Americans. Check out passports.io/united-states for further information.
United States Citizenship
To obtain the citizenship of United States, 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 permanent residence required is shortened to 3 years.
How we can help you
Seeking to start a Business in the U.S.? Seeking an entrepreneur Visa? We can help you on that. Fill out the form or e-mail us at [email protected], our seniors consultants will assist you in the election of the most suitable visa according to your situation, fulfill the requirements and throughout the application process.
What is the USA Entrepreneur Parole Rule?
The US Entrepreneur Parole Rule allows, at the discretion of DHS and fulfilling certain requirements, the temporary stay of a foreigner who has started a business activity in the US.
Is the USA Entrepreneur Parole a Visa?
No. It is like a temporary permit to live and work in the US. After permit expiration, the entrepreneur must apply for a Visa in a US Embassy or Consulate, to continue with his business activity.
How long is the stay permit under the USA Entrepreneur Parole Rule?
The Parole is divided into two 30 months’ periods.
What are the requirements to apply for the USA Entrepreneur Parole?
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, and have an important role in its operation.
Startup must have obtained funds of USD 250,000 from a qualified investor within 18 months’ prior the application, or USD 100,000 of a qualified government grant/subsidy.
What are the requirements to obtain an extension of the USA Entrepreneur Parole?
Applicant must keep at least 5% of shares, and play an indispensable role for the growth of the company.
During the first parole period, startup must have obtained at least USD 500,000 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 an 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, has made investments in 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%.
How can I apply for the entrepreneurial Parole?
Entrepreneur must file the Form I-194 to the US Citizenship and Immigration Service (USCIS). Provide all documents evidencing compliance with the requirements, in addition to the 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 the employment authorization filing the form I-765.
How much is the Entrepreneurial Parole?
The application costs USD 1,200, adding USD 85 to set an appointment for the biometric test. The requests of the spouse and of each of the children has a cost of USD 575 and USD 85 respectively.
What are the Entrepreneur US temporary visa?
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 needed to demonstrate by acclamation or award to 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, owning at least 50% of the business.
Intracompany Transferee (L1): up to 5-7 years. Executives, directors or workers of foreign companies that establish a parent, affiliate, subsidiary or branch company 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 the USA Citizenship?
Foreigner who has been a permanent resident for at least 5 years and fulfills certain requirements is eligible to apply for the US Citizenship. In the case of having a US spouse, the period of permanent residence required is shortened to 3 years.
Any other question? Contact us through [email protected] or check the Federal Register’s International Entrepreneur Rule publication and the U.S. Citizenship and Immigration Services website.
We have written several articles about U.S. that may be of your interest. You can read them at https://flagtheory.com/category/usa/.