DHS Publishes Proposed Rule to Provide Parole Status to Certain Entrepreneurs; Final Rule Expected Shortly After 45 Day Mandatory Comment Period
August 31, 2016
Today, the Department of Homeland Security published a proposed rule in the Federal Register which would grant Discretionary Parole status to individuals who can demonstrate “substantial and demonstrated potential for rapid business growth and job creation” in the U.S.
This Discretionary Parole does not confer visa status but allows qualifying entrepreneurs to remain in the U.S. on a case by case basis. The Parole also does not grant permanent resident status although presumably an entrepreneur could pursue a green card while in the parole status. Under the proposed rule, individuals will be permitted to work automatically once the parole application is approved, spouses may obtain employment authorization, and the initial period of stay will be 2 years, with the possibility of applying for re-parole (extension) for 3 additional years.
In June 2013, the Senate passed a comprehensive immigration reform bill which included a new visa for entrepreneurs as well as other changes to business immigration laws. The House failed to take action on the bill. A frustrated President Obama then announced immigration initiatives which he planned to take.
Today’s proposed rule is the result of a coordinated effort by the White House and USCIS. Here’s a high level summary of the Proposed Rule. Please note that provisions may change following the Comment Period. We will report on the Final Rule when that is published, most likely in early Fall.
- Entrepreneurs would be granted Discretionary Parole on a case by case basis to enter US initially for 2 years, with possible extension (re-parole) for 3 years.
- Must demonstrate “substantial and demonstrated potential for rapid business growth and job creation.”
- Significant capital investment (at least $345,000) from U.S. investors with established records of successful investments (i.e., VC firms, start up accelerators, angel investors), or
- Significant (at least $100,000) government grants: federal, state or local entities, or
- Combination of the above
- Investment received within 1 year of filing application
- Cannot be small business which supports only the entrepreneur and family
- Start up enterprise must be formed in the U.S. and recently started (in last 3 years proceeding application).
- Entrepreneur must own a “substantial interest” in the start up (at least 15% at time of application and 10% throughout parole period) and must have a central and “active” role in the operations (cannot be a mere investor).
- Entrepreneur must show minimum income of 400% above federal poverty guideline ($80,800+). Can combine spouse’s income with entrepreneur.
- Spouse may obtain EAD.
- Entrepreneur’s work authorization is “automatic” upon grant of parole (no need to wait for EAD as this would defeat purpose of rapid business growth).
- Apply using new Form I-941 with filing fee of $1,200, plus biometrics fee of $85.
- No more than 3 entrepreneur parolees permitted per start up.
- Must immediately report any material changes to USCIS.
- Re-Parole standards
- $500,000 minimum annual revenue
- 20% average annual revenue growth
- 10 U.S. jobs created