USCIS Proposes Rule to Allow Parole for Certain Start-Up Entrepreneurs

startupForeign entrepreneurs would have an easier time starting businesses in the U.S. under proposed regulations released Aug. 26 by the Department of Homeland Security, according to Bloomberg.

The long-awaited proposed regulations would allow DHS to temporarily admit, on a case-by-case basis, entrepreneurs who meet certain criteria related to the success of their startup companies and how many jobs they generate for U.S. workers.

The proposed rule is one of the last pieces of President Barack Obama’s 2014 executive action on immigration to be implemented. The White House also indicated that DHS guidance on entrepreneurs self-petitioning for a green card is forthcoming.

More than 40 percent of Fortune 500 companies were founded by immigrants or their children, and immigrants are more than twice as likely to start a company as their native-born counterparts, according to a DHS spokesperson. Immigrants are behind many tech giants, including eBay, Google, Instagram, Tesla, WhatsApp, and SpaceX.

Currently, there is no visa for immigrants to found startup companies, although legislation to that effect has been introduced in Congress several times.

The proposed rule is aimed at those entrepreneurs who can demonstrate that their startups have the potential for rapid growth, job creation and innovation, according to U.S. Citizenship and Immigration Services Director León Rodríguez. The agency expects about 3,000 applications a year once the rule is finalized and the program gets off the ground, although there is no cap on the number that can apply. That could mean the creation of upwards of 30,000 jobs per year under the program.

The proposed rule would set up two separate periods of “parole,” the discretionary authority the administration is using under the Immigration and Nationality Act. There would be an initial, two-year period that could be extended an additional three years. Both periods have similar criteria that would have to be met for the entrepreneur to be able to stay in the U.S.

After those periods of parole, the entrepreneur could choose to apply for a temporary visa or green card, such as an EB-2 or H-1B.

Under the proposed rule, for the first two-year parole period, entrepreneurs would have to show: creation of a startup within the three years preceding the application and that the startup has the potential for rapid growth and job creation; the applicant has at least a 15 percent ownership interest in the company and has an active role in its operations and future growth; and the startup has secured at least $345,000 in funding from established U.S. investors or at least $100,000 in government grants.

For the additional three years, entrepreneurs would have to show: the company has been lawfully operating for the past two years and continues to have the potential for rapid growth and job creation; the entrepreneur has at least a 10 percent ownership interest in the company and has an active role in its operations and future growth; the company received at least $500,000 in additional funding from establishing U.S. investors or government grants; the company has at least $500,000 in annual revenue, with average annualized revenue growth of at least 20 percent; and the company created at least 10 jobs for U.S. workers.

For both periods, the entrepreneur applicant also would be able to submit alternative, “compelling” evidence that admission to the U.S. would create a significant public benefit.

Up to three co-founders of a single startup business could apply for parole.
The proposed rule also would allow entrepreneurs to bring their spouses and children, and spouses would be granted employment authorization.

There is a 45-day comment period on the proposed rule, after which a final rule can be issued. The final rule should indicate the date when applications can be submitted.

Ideally Congress will create a visa suitable for startup founders. But in the meantime this proposed rule is a helpful stopgap measure.

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