By: Bernard Wolfsdorf, Esq. and Joseph Barnett, Esq.
Today, the U.S. Department of Homeland Security (“DHS”) released in the Federal Register the final International Entrepreneur Rule, which amends regulations on DHS’ parole authority in order to increase and enhance entrepreneurship, innovation, and job creation in the U.S. This final rule, included in new section 8 C.F.R. § 212.19, establishes criteria for the use of parole with respect to entrepreneurs of start-up entities who can demonstrate through evidence of substantial and demonstrated potential for rapid growth and job creation that they would provide a significant public benefit to the United States. The final rule will become effective on July 17, 2017.
In general, “parole” allows an individual, who may be inadmissible or otherwise ineligible for admission into the U.S., to be “paroled” into the U.S. for a temporary period. Parole decisions are discretionary and made on a case-by-case basis. An individual who is paroled into the U.S. has NOT been formally admitted into the United States for purposes of immigration law; that is, a “parolee” is not granted actual immigration status. Parole normally ends on the date the parole period expires or when the beneficiary departs the United States or acquires an immigration status, whichever occurs first, but can be revoked at any time and without notice if USCIS determines that parole is no longer warranted or the beneficiary fails to comply with any conditions of parole.
Here are five important things to know about the new International Entrepreneur Rule:
1. Initial Requirements for Parole for Entrepreneurs. The new regulations provide that an alien may be considered for parole if:
• A U.S. business entity (a) was created within 5 years immediately preceding the filing date of the alien’s parole request, (b) has lawfully done business since its formation, and (c) has potential for rapid growth and job creation; and
• The alien either (a) possesses at least 10% of the business entity at the time of the parole request, and (b) has a central and active role in the operations of that entity, such that the alien is well-positioned, due to his or her knowledge, skills, or experience, to substantially assist the entity with the growth and success of its business; and
• The business entity has either received, within 18 months immediately preceding the filing date of the alien’s parole request, (a) a “qualified investment” amount of at least $250,000 from a “qualified investor,” or (b) at least $100,000 through one or more qualified government awards or grants.
No more than 3 entrepreneurs may be granted parole based on the same business entity. USCIS will consider and weigh all evidence to determine whether an alien’s presence in the U.S. will provide a significant public benefit and whether a favorable exercise of discretion is warranted. If granted, the entrepreneur would receive employment authorization that would be limited to the business entity.
2. Filing and Length of Initial Parole and Re-Parole. An entrepreneur can apply for parole using the Form I-941 Application for Entrepreneur Parole (not yet available). DHS may grant an initial period of parole for a period of up to 2.5 years from the date the individual is paroled into the U.S. DHS may re-parole an entrepreneur for one additional period of up to 2.5 years based on the same business entity, if the re-parole request was filed prior to expiration of initial period of parole. Note that a parolee must maintain a household income greater than 400% of the federal poverty line for his or her household size as a condition of parole.
3. Spouses and Children. Spouses and children of the entrepreneur seeking parole as derivatives must individually file a Form I-131, Application for Travel Document, with evidence of the qualifying familial relationship with the entrepreneur and evidence meriting a grant of parole in the exercise of discretion. The spouse and children will be granted parole for same period granted to entrepreneur. A spouse may also file a Form I-765, Application for Employment Authorization to be able to lawfully work in the U.S.
4. Maintenance and Requirements for Re-Parole. An alien may be considered for re-parole if he/she demonstrates that the first 2 criteria mentioned above are still met (though ownership of business entity may be reduced to 5%), and if he/she provides evidence that the business entity has either:
• Received, during the initial parole period, at least $500,000 in qualifying investments, qualified government grants or awards, or a combination of such funding, or
• Created, during the initial parole period, at least 5 qualified jobs with the start-up entity, or
• Reached, during the initial parole period, at least $500,000 in annual revenue in the United States and averaged 20 percent in annual revenue growth.
5. Miscellaneous Information. There is no appeal from a denial of parole, and no motion to reopen or reconsider a denial of parole will be considered by USCIS. The entrepreneur parolee must immediately notify USCIS in writing if he or she will no longer be employed by the start-up entity or ceases to possess a qualifying ownership stake in the business entity. USCIS may terminate parole at any time, either automatically without notice, or with written notice. The maximum period of parole based on the same business entity is five years. The investment and revenue amounts are to be automatically adjusted every 3 years by the Consumer Price Index. Parolees are ineligible to adjust or change status in the U.S.