For startup founders who do not qualify for any other type of U.S. visa, there may be a way to stay and work in the United States under the International Entrepreneur Rule (IER). The IER provides a framework for the Department of Homeland Security (DHS) to use its parole authority to grant a period of authorized stay, on a case-by-case basis, to non-citizen entrepreneurs who would provide a significant public benefit through their startup entity’s potential for rapid growth and job creation.
Although an individual who is paroled into the United States has not been admitted into the United States for purposes of immigration law (i.e. is not granted a visa or Green Card), parolees may enter and remain in the United States and may be authorized to work. If the applicant establishes that the applicant’s presence in the United States will provide a significant public benefit, USCIS may, in its discretion, approve the application for the applicant to be paroled into the United States for a period of up to 30 months. An entrepreneur who is paroled into the United States is authorized for employment with the start-up entity incident to the conditions of the parole. It is not necessary for the parolee to apply for an Employment Authorization Document.
As of October 1, 2024, an applicant may be considered for initial parole on a case-by-case basis if he or she demonstrates that the entity has received, within 18 months immediately preceding the filing of an application for initial parole, either (1) a qualified investment amount of at least $311,071 from one or more qualified investors, or (2) an amount of at least $124,429 through one or more qualified government awards or grants. In the alternative, an applicant who partially meets one or both of those criteria may still qualify for further consideration by providing (3) other reliable and compelling evidence of the start-up entity's substantial potential for rapid growth and job creation.
A. Applicant and Start-up Entity Criteria
An applicant files an Application for Entrepreneur Parole (Form I-941) to be considered for parole as an international entrepreneur. To be considered for such parole, the applicant must demonstrate that a grant of parole will provide a significant public benefit to the United States based on the applicant’s entrepreneurial role with a start-up entity in the United States that has significant potential for rapid growth and job creation.
An applicant need not be outside the United States to apply. Persons outside the United States, persons in the United States in nonimmigrant status, and those who are in the United States not presently maintaining nonimmigrant status may apply.
If their Form I-941 is approved, those applicants who are in the United States would have to depart the United States and would need to appear at a port of entry to request parole into the United States. However, applicants who are in the United States but are not in a lawful status (for example, their Arrival/Departure Record (Form I-94) expired and they are no longer in a nonimmigrant status) may have accrued unlawful presence and may face immigration consequences upon departure from the United States.
1. Applicant Requirements
Central and Active Role
The applicant must have a central and active role in the operations of the start-up entity. Within that role, the applicant must be well-positioned, due to their knowledge, skills, or experience, to substantially assist the entity with the growth and success of its business.
Substantial Ownership Interest
The applicant must also have a substantial ownership interest in the start-up entity. USCIS considers the applicant to have substantial ownership if the applicant possesses at least a 10 percent ownership interest in the start-up entity at the time of adjudication of the Form I-941. If granted parole, an applicant may reduce his or her ownership interest below 10 percent during the period of initial parole, so long as the applicant maintains at least a 5 percent ownership interest in the start-up entity during the initial parole period.
While the applicant does not need to be the sole owner, no more than three entrepreneurs may be granted international entrepreneur parole based on the same start-up entity.
2. Start-up Entity Requirements
The applicant’s start-up entity must be:
A corporation, limited liability company, partnership, or other entity that is organized under federal law or the laws of any state, and that conducts business in the United States;
Not primarily engaged in the offer, purchase, sale or trading of securities, futures contracts, derivatives, or similar instruments;
Formed within the 5 years immediately preceding the date the applicant filed the initial parole application and lawfully doing business during any period of operation since its date of form.
B. Qualified Investment or Government Award or Grant
1. Investment Option
An applicant can demonstrate the start-up entity’s substantial potential for rapid growth and job creation through a qualified investment if, within the 18 months immediately preceding the filing of the Form I-941, one or more qualified investors made qualified investments that together are at least the required amount. The required amount automatically adjusts every 3 years by the Consumer Price Index for All Urban Consumers (CPI-U).
The following table outlines the required amount of investment in the start-up, which varies based on the date the applicant filed the Form I-941.
Required Amount of Investment in the Start-up | |
Filing Date | Investment Amount |
Before October 1, 2021 | $250,000 |
October 1, 2021 through September 30, 2024 | $264,147 |
On or after October 1, 2024 | $311,071 |
Qualified Investment
To be considered a qualified investment, the investment must be made in good faith and not be an attempt to circumvent any limitations imposed on investments under 8 CFR 212.19. The investment must be lawfully derived capital in a start-up entity that is a purchase from such entity of its equity, convertible debt, or other security convertible into its equity commonly used in financing transactions within such entity's industry.
A qualified investment does not include an investment, directly or indirectly, from:
The entrepreneur;
The parents, spouse, brother, sister, son, or daughter of such entrepreneur; or
Any corporation, limited liability company, partnership, or other entity in which such entrepreneur or the parents, spouse, brother, sister, son, or daughter of such entrepreneur directly or indirectly has any ownership interest.
Qualified Investor
While an applicant is not prohibited from personally investing in the start-up entity or otherwise securing additional funding, only investments from a qualified investor count towards the minimum investment amount.
A qualified investor is an individual who is a U.S. citizen or lawful permanent resident (LPR) of the United States, or an organization that is located in the United States and operates through a legal entity organized under the laws of the United States or any state, that is majority owned and controlled, directly and indirectly, by U.S. citizens or LPRs of the United States.
A qualified investor must also regularly make substantial investments in start-up entities that subsequently exhibit substantial growth in terms of revenue generation or job creation by demonstrating that during the preceding 5 years:
The qualified investor made investments in start-up entities in exchange for equity, convertible debt, or other security convertible into equity commonly used in financing transactions within their respective industries comprising a total in such 5-year period of no less than the investment amount in the chart below; and
Subsequent to such investment by such individual or organization, at least two such entities each either created at least five qualified jobs or generated revenue of at least the amount in the chart below with average annualized revenue growth of at least 20 percent.
The following table outlines the required amount of investment and revenue for qualified investors’ prior investments, which varies based on the date the applicant filed the Form I-941.
Required Investment and Revenue Amounts for Qualified Investors’ Prior Investments | ||
Filing Date | Investment Amount | Revenue Amount |
Before October 1, 2021 | $600,000 | $500,000 |
October 1, 2021 through September 30, 2024 | $633,952 | $528,293 |
On or after October 1, 2024 | $746,571 | $622,142 |
The term qualified investor does not include an individual or organization that has been:
Permanently or temporarily enjoined from participating in the offer or sale of a security or in the provision of services as an investment adviser, broker, dealer, municipal securities dealer, government securities broker, government securities dealer, bank, transfer agent or credit rating agency;
Barred from association with any entity involved in the offer or sale of securities or provision of such services; or
Otherwise found to have participated in the offer or sale of securities or provision of such services in violation of law.
2. Government Award or Grant Option
An applicant can demonstrate the start-up entity’s substantial potential for rapid growth and job creation through a qualified government award or grant. The applicant must show that, within the 18 months immediately preceding the filing of the Form I-941, the start-up entity received one or more qualified government awards or grants of at least the minimum required amount.
Qualified awards or grants include those for economic development, research and development, or job creation (or other similar monetary awards typically given to start-up entities) made by a federal, state, or local government entity (not including foreign government entities) that regularly provides such awards or grants to start-up entities. Contractual commitments for goods or services do not constitute qualifying awards or grants.
The following table outlines the minimum required amount for government awards and grants, which varies based on the date the applicant filed the Form I-941.
Government Awards and Grants Amounts | |
Filing Date | Award or Grant Amount |
Before October 1, 2021 | $100,000 |
October 1, 2021 through September 30, 2024 | $105,659 |
On or after October 1, 2024 | $124,429 |
3. Alternative Option
If the applicant satisfies the criteria demonstrating that they are an entrepreneur in a start-up entity but only partially meets one or both of the criteria for qualified investments or qualified awards or grants, USCIS may still consider the applicant for entrepreneur parole if the applicant provides additional reliable and compelling evidence of the start-up entity’s substantial potential for rapid growth and job creation. When considered in totality, the evidence must serve as a compelling validation of the entity’s substantial potential for rapid growth and job creation.
C. Significant Public Benefit
There is no statutory or regulatory definition of significant public benefit. Parole determinations are case-by-case discretionary determinations that consider the totality of the circumstances of each case.
SUMMARY
The International Entrepreneur Rule, published on January 17, 2017, required that investment and revenue thresholds in 8 CFR 212.19 would automatically adjust for inflation every 3 years. Accordingly, DHS published a final rule on July 25, 2024, to codify the next automatic adjustment, which takes effect on October 1, 2024.
Beginning in Fiscal Year 2025 ( i.e., beginning October 1, 2024), under 8 CFR 212.19(b)(2)(ii)(B) as updated by this final rule, an applicant may be considered for initial parole on a case-by-case basis if he or she demonstrates that his or her entity has received, within 18 months immediately preceding the filing of an application for initial parole, either (1) a qualified investment amount of at least $311,071 from one or more qualified investors, or (2) an amount of at least $124,429 through one or more qualified government awards or grants.
In the alternative, an applicant who partially meets one or both of those criteria may still qualify for further consideration by providing (3) other reliable and compelling evidence of the start-up entity's substantial potential for rapid growth and job creation. Similarly, revised 8 CFR 212.19(c)(2)(ii)(B) provides that an applicant may be considered for re-parole if they establish that during the initial parole period, their entity:
Received at least $622,142 in qualifying investments, qualified government grants or awards, or a combination of such funding, during the initial parole period;
Created at least 5 qualified jobs with the start-up entity during the initial parole period; or
Reached at least $622,142 in annual revenue in the United States and averaged 20 percent in annual revenue growth during the initial parole period.
In the alternative, an applicant who meets the criteria in paragraph (c)(2)(ii)(A) and partially meets one or more of the criteria in paragraph (c)(2)(ii)(B) of § 212.19 could still qualify for consideration by providing other reliable and compelling evidence of the start-up entity's substantial potential for rapid growth and job creation.
Finally, revised 8 CFR 212.19(a)(5) defines a qualified investor as an individual or investor who, among other requirements, has made investments in start-up entities comprising a total of no less than $746,571 in a specified 5-year period and, subsequent to the investment, at least two of those entities each created at least 5 jobs or generated at least $622,142 in revenue with an average annualized revenue growth of at least 20 percent.
CALL NOW
To find out if this option might be right for you, schedule a complimentary 15-minute consultation with The Grady Firm’s attorneys; call +1 (949) 798-6298; or fill out a Contact Request Form.
This article is for informational purposes only, and does not constitute legal advice or create an attorney-client relationship. This article does not make any guarantees as to the outcome of a particular matter, as each matter has its own set of circumstances and must be evaluated individually by a licensed attorney
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