On January 17, 2017, DHS published a final rule that encourages entrepreneurship and investment to stimulate our economy by granting parole status to foreign nationals who establish start-up companies in the U.S. The rule is slated to go into effect on July 17. A new form is being created, and the filing fee will be $1,200.
This new rule allows entrepreneurs to obtain parole status – a status that allows them to be lawfully present in the United States despite not having a green card or a nonimmigrant visa – for 30 months to oversee and develop their start-ups. An additional 30-month extension can be obtained, for a total of five years in the United States. The company must have been formed within the past five years and the immigrant must play a central and active role in the company. There is a maximum of three immigrant entrepreneurs per company that can benefit from this parole status. Spouses and children of the entrepreneur can receive parole as well, and spouses will be permitted to receive work authorization.
The new rule, however, requires more than just entrepreneurship alone – there must be an investment into the company. The immigrant entrepreneur must own at least 10 percent of the start-up and show the potential for rapid growth and job creation by having a qualified U.S. investor. DHS has determined that a qualified investor would be one who has invested at least $250,000 into the company, a government entity that has awarded or granted at least $100,000, or a combination of the two, with compelling evidence to show the company would serve a significant public benefit. Furthermore, qualified U.S. investors must be able to show that they have invested at least $600,000 in start-ups over the past five years and at least two of these new companies have created five jobs and generated over $500,000 in revenue, with an average annual growth rate of 20 percent.
To receive the 30-month extension, the entrepreneur will have to show ownership of at least 5 percent of the company, a personal income of at least 400 percent of the federal poverty guidelines, an additional $500,000 in investments subsequent to the grant of parole, the creation of five jobs, and an annual revenue of $500,000 with an annual growth rate of 20 percent. If the entrepreneur can only show some of the requirements, he or she can still submit compelling evidence to show a public benefit.
DHS estimates that roughly 3,000 entrepreneurs will be able to benefit from this program, but it appears that initial investment and continued investment may be a significant hurdle. In any case, this new rule provides added possibilities for entrepreneurs and investors in the United States.