International Entrepreneur Parole

Born on January 17, 2017, three days before President Obama left office, and immediately challenged by the Trump administration, the International Entrepreneur Parole (IEP) program was resuscitated by USCIS on May 10^th, 2021. This is good news as it creates a new path for talented foreign entrepreneurs to work in the United States and grow their start-ups. Not all investors are from a country that has a treaty that permits them to apply for an E-2 investor visa; have a qualifying international organization that supports an L-1 intracompany transferee visa, or has over a million dollars to support an EB-5 permanent residence case, so entrepreneur parole may fill a gap and afford a work authorization solution, particularly for younger foreign entrepreneurs and/or those with relatively much less capital to invest who seek to establish or grow a new or very young U.S. company.

To understand its advantages as well as its limitations, one must understand the immigration definition of “parole” which means, according to the Immigration and Nationality Act (INA), an “official permission to enter and remain temporarily in the United States.”  The IEP is not a new visa category voted by Congress, but a discretionary authority granted by the Department of Homeland Security (DHS) to allow those foreign national deemed capable of providing a “significant public benefit” to the United States to enter the U.S. to work on developing a U.S. business.

While all other immigration parole programs ever created before harbor humanitarian motives, the IEP is purely business oriented as its official stated purpose is “to increase and enhance entrepreneurship, innovation, and job creation in the United States.”  As such, the applicant has to be an “entrepreneur of a new start-up entity in the United States that has significant potential for rapid growth and job creation.”

This is the “significant public benefit” the United States’ economy is looking for and to demonstrate such potential, DHS has published a list of required criteria. To qualify, foreign entrepreneurs must demonstrate that:

• The start-up entity has been formed in the U.S. within 5 years immediately preceding the filing date of the application;
• The applicant possesses a substantial ownership interest in the start-up of at least 10 percent;
• The applicant will play a central and active role in the operation and future growth of the entity through its skills, knowledge or experience;
• The start-up has received capital investment of (i) at least $250,000 from qualified U.S. investors (defined as those that have an established record of successful investments, such as venture capital firms, angel investors, or start-up accelerators), or (ii) at least $100,000 in grants or awards from qualifying U.S. federal, state or local government entities (defined as those that regularly provide such funding for economic development, research and development, or job creation).  If both requirements are only partially met, the applicant would have to provide additional compelling evidence of the start-up’s substantial potential for rapid growth and job creation.

Even if all criteria are met, only three entrepreneurs maximum from each start-up company may benefit from this program.

If US Citizenship and Immigration Services (USCIS) approves the IEP application, the entrepreneur will be granted an initial stay of up to 2 ½ years.  An extension of up to 2 1/2 additional years may be granted if:

• the entrepreneur maintains a 5 percent ownership stake and a central and active role in the start-up;
• the start-up has encountered significant growth since the initial grant of parole and continues to have substantial potential for rapid growth and job creation.  To meet this criteria, the applicant could show that the entity:
  • reached at least $500,000 in annual revenue, with an average annualized revenue growth of at least 20 percent, during the initial parole period;
  • received at least $500,000 in additional qualifying funding during the initial parole period; or
  • created at least 5 full-time jobs for U.S. workers during the initial parole period.

As with initial parole, an applicant who partially meets one or more of the above criteria related to capital investment, revenue generation, or job creation may still be considered for re-parole if alternative reliable and compelling evidence of the entity’s substantial potential for rapid growth and job creation is provided.  Such application would again be subject to a discretionary determination by USCIS.

Throughout the period of granted parole, the entrepreneur must maintain a household income greater than 400% of the Federal Poverty Guidelines.  Failure to comply with this requirement, or any other condition listed above, could result in the termination of such parole.

Whether it is for an initial stay or extension, the entrepreneur applicant must file USCIS Form I-941, with the supporting documentary evidence, and a filing fee (currently) in the amount of $1,200 (along with a biometric services fee of $85).  If the application is approved, the entrepreneur must visit a U.S. Consulate abroad via a scheduled appointment to obtain travel documentation (“boarding foil”) before appearing at a U.S. port of entry for a final parole determination and seek entry via U.S. Customs and Border Protection (USCBP).  Canadian nationals may present an approved I-941 at a U.S. port of entry without first obtaining travel documentation.  It is important to note that even if the entrepreneur is already in the U.S. with an F-1 or H1-B visa for instance, (s)he cannot change status within the United States  and (s)he must leave the U.S. and re-enter to be “paroled” by a border officer into the U.S.

Spouses and children may accompany the entrepreneur by filing Form I-131, Application for Travel Document, with a filing fee of $575, and an additional $85 biometrics fee.  Once present in the United States, the spouse may apply for work authorization by filing Form I-765, along with a $410 filing fee.  Children of entrepreneurs granted parole are not eligible for employment.

According to a 2020 Congressional Research Report, as of February 10, 2020, USCIS had received a total of 28 IEP applications.  Of these, 1 was approved, 22 were denied, 3 were withdrawn, and 2 were pending.  Compared to the hundreds of thousands of employment-based visa applications and petitions USCIS receives each year, the IEP track record is quite underwhelming, particularly the very high denial rate.

The reason for these less than impressive statistics likely, largely stem from the actions of the previous Administration, which effectively put it on ice by discouraging cases via such a high denial rate.  It really should be a viable category for start-up entrepreneurs who do not satisfy the criteria of the other more common categories (E, H, L, O, EB) but have a great concept for a new company that will likely grow rapidly and create jobs.  It should fill a gap for foreign talented investors or entrepreneurs who cannot invest the required amounts themselves, or do not have a qualifying business structure in their home country that supports an L work visa case, or are not nationals of a Treaty country that supports an E-2 case, or have not achieved the required level of distinction yet that may result in an O-1 extraordinary ability work visa. 

For example, entrepreneur parole may offer a great option for student start-up founders who have exhausted their optional practical training and did not get selected at the H1-B lottery or do not wish to be dependent upon a job offer.  Another ideal candidate would be a foreign-born STEM Ph.D. who was traditionally forced into the classic visa options to work for larger firms instead of pursuing its own interest.  Because this is neither an immigrant nor a nonimmigrant visa status, this could also be an option for entrepreneurs currently banned from obtaining immigrant and nonimmigrant visas.  Someone in IEP can later seek an E-2, L-1 or EB-5 visa.

While it provides a new avenue for foreign business nationals who do not otherwise qualify for the traditional work visa categories, it is very limited in scope and was formerly strictly adjudicated.  The process involves a lot of USCIS discretion and, according to some practitioners, it even seems arbitrary in its most recent construct.  The lack of USCIS officers’ familiarity with the program is an extra-hurdle.  However, the recent move by the Biden Administration to effectively remove the IEP program from mothballs signals a new receptivity to cases by the new construct of USCIS and presumably there will be a rise in cases filed and hopefully a substantial rise in approvals and reduction in processing times.

If successful, the IEP program might be a major asset to the U.S. economy: according to some research, this program could lead to the creation of 135,000 to 300,000 jobs within the next decade.  At the same time, it will ensure the U.S. continues to attract brilliant minds, thereby maintaining a competitive advantage over other nations that already try to attract foreign talented businesspeople, especially amongst the younger set, by creating international entrepreneurs-friendly programs.

With the “Uberization” of the economy, the new generation of business owners being tech-savvy, and the COVID-induced rise of remote work, and this younger generation growing up hearing about the success stories of start-up founders turned tech giants, young talented foreign nationals with a business dream are less likely to pursue traditional employment offers with rigid work conditions.  By not requiring the sponsorship of an employer, the IEP program reflects modern trends and ensures the U.S. remains a desirable venue in an increasingly global marketplace.  With its May 2021 announcement, USCIS has already made a good faith effort to foster the implementation of the program by holding informational sessions dedicated to assist practitioners. 

If after reading the above requirements for entrepreneur parole, you have an interest in pursuing work authorization via this program, please contact Lisa M. Galvan, Esq. for a free immigration consultation.