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International Entrepreneur “Parole” Proposed Rule

Synopsis: On August 24, 2016, DHS published a proposed rule on the use of discretionary parole on a case-by-case basis for entrepreneurs of start-ups whose entry into the United States “would provide a significant public benefit.” Once the proposed rule is published in the Federal Register, there will be a 45-day public comment period.  After DHS reviews all the comments, DHS will publish the final rule.

Key points:

  • Parole for entrepreneurs/startups announced by President Obama in November 2014 as part of executive actions.
  • Purpose of parole is to allow entrepreneur to oversee and grow the startup in the U.S.
  • Parole is discretionary.
  • Eligible start-ups need to show “substantial and demonstrated potential for rapid business growth and job creation.”  The requisite potential can be shown by (1) receipt of significant capital investment from “qualified” U.S. investors with established records of successful investments, or (2) obtaining significant awards or grants from certain Federal, State or local government entities.
  • Helpful to show the parole applicant’s: (1) substantial ownership interest in the entity, (2) active and central role in the entity’s operations, and (3) ability to substantially further the entity’s ability to engage in R&D or otherwise conduct and grow its business in the U.S.
  • Approved parole will be provide a temporary initial stay of up to 2 years, with possible 3-year extension (max total 5 years).  Need to “significant public benefit” (substantial increases in capital investment, revenue, or job creation) for re-parole.
  • Case-by-case analysis.

Details: (But keep in mind this is only the proposed rule, the Final Rule could be different)

  • Application for Entrepreneur Parole filed with USCIS using Form I-941, w/ filing and biometric fee.  Proposed FF is $1,200.00.
  • “New Start-Up Entity” – Needs to be “recently formed”—DHS proposes that an entity may be generally considered recently formed if it was created within the 3 years preceding the date of the filing of the initial parole application.
  • Applicant needs to be “Entrepreneur” – Need to show (1) at least 15% ownership at the time of initial parole grant (can be 10% later), AND (2) “active and central role in the operations and future growth of the entity”—Cannot just be an investor.
  • “Significant U.S. Capital Investment or Government Funding” –Can show by:
    • Investments from established U.S. Investors - DHS proposes standard of $345,000 or more total capital investment from established investors
    • Government grants – significant awards or grants from Federal, State or local government entities with expertise in economic development, research and development, and/or job creation. DHS proposed standard of $100,000+ in monetary awards or grants.
  • The entrepreneur, spouse, and minor/unmarried children can get parole
    • Employment by principal limited to the start-up.
    • Spouse can get EAD.
  • DHS proposes limit of parole for 3 entrepreneurs for each entity.
  • For 3 year extension, need to show:
    • Entity still exists and operating;
    • At least 10% ownership + active role in operations;
    • Significant revenue/job creation:
      • Prove receipt of at least $500,000 in qualifying funding during initial parole period; or
      • $500,000 in annual revenue (w/ average annualized revenue growth of at least 20%) during the initial parole period; or
      • Job creation: at least 10 full-time jobs for U.S. workers during the initial parole period; or
      • Other alternative criteria
    • There are specific requirements for “qualifying investors” and “qualifying investments”

 

 

Joseph C. Fungsang, Esq. Attorney At Law Margaret W. Wong & Associates LLC

 

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