The US DHS has issued a rule allowing foreign nationals to establish start-up companies in the US and obtain immigration admission for up to 5 years, starting this July

Amid a whirlwind of immigration restrictions making it increasingly difficult for entrepreneurs to develop their business projects in the US, the new Entrepreneur Parole comes as a breath of fresh air. The rule allows foreign entrepreneurs to obtain a parole status for up to 30 months (with an additional 30-month extension) to develop their start-ups in the US.

Eligibility Requirements

Applicants would be able to apply from within the US or abroad and applications can be filed starting on July 17, 2017. Eligible applicants must meet the following criteria:

  • Entrepreneur applicants must form—or have formed within 5 years prior to filing— a new US start-up entity.
  • Entrepreneur applicants must show a vested interest and prominent role in the start-up by establishing:
    • He/she possesses at least a 10 percent ownership interest in the entity at the time of the adjudication of the initial grant of parole; and
  • He/she has an active role in the development of the entity (mere investment is not enough)
  • The start-up entity must show substantial potential for rapid growth, which may be established by:
    • Investment of at least $250,000 from a US investor (such as venture capital firms, angel investors, or start-up accelerators) with records of substantial investment in successful start-up entities; or
  • US government (state, federal or local) grants of at least $100,000; or
     
  • Partially satisfying one or both of the above criteria in addition to other reliable and compelling evidence of the start-up entity's substantial potential for rapid growth and job creation.

Other Visa Options for Foreign Workers and Entrepreneurs

Generally, foreign workers, investors, and entrepreneurs pursue the following visa options:

  • EB-5 Immigrant Investor Program
  • H-1B non-immigrant visa for persons in specialty occupations
  • L visa for intra-company transferees
  • EB employment-based immigrant petitions

Each of the above visa options has its own intricacies and they all involve a rigorous process with challenging requirements to meet. The EB-5 program requires a substantial investment (around US$ 500,000), that most investors are unable to perform. Moreover, the EB program is expected to soon undergo a reform, which will increase the investment amount. The H-1B visa has an annual cap and it is adjudicated based on a lottery. Further, the H-1B is expected to undergo significant reforms under the current administration, which might render it unviable for most applicants. The L visa requires the applicant be an executive at a foreign subsidiary of a US sponsoring company, which reduces the eligible population significantly. Finally, the EB visas require a US sponsor and a Labor Certification approval, which is a rigorous, burdensome, and lengthy process.

What this Means for Foreign Entrepreneurs

The new start-up parole is an excellent alternative for applicants who do not qualify for the rigorous EB-5 Investor Program and also are unable or unwilling to file an employment-based visa with a US sponsor. One start-up yields eligibility to up to three entrepreneurs. The parole benefit extends to applicants' spouses and children, and spouses are eligible for a work authorization, which is a valuable benefit that not all visas include.

DHS estimates that approximately up to 3,000 entrepreneurs will be able to benefit from this program, but the program might be capped. Consequently, qualifying entrepreneurs and investors with an interest in developing their business in the US should contact their immigration consultants early on to evaluate the possibility of applying to the start-up parole.

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