On January 17, 2017, the United States Department of Homeland Security (“DHS”) formally released the final rule to allow International Entrepreneurs to legally remain and work in the United States in a Parole status. The rule, included in 8 CFR 212.19, became effective as of July 16, 2017. The new rule is aimed at providing an alternative method for those entrepreneurs who can meet the requirements to enter and remain in the U.S. for start-up employment. The rule provides automatic work authorization for those international entrepreneurs who are paroled into the U.S. for a start-up business. International entrepreneurs may be allowed to enter the United States more easily and stay for a longer period of time for an initial period of up to 30 months.
The rule, the parole for International Entrepreneurs program, more commonly referred to as EB-6, is a new USCIS classification available to foreign entrepreneurs. Occasionally called the “start-up” visa. The EB-6 is specifically designed for entrepreneurs coming to the US to launch or operate a newly formed venture. Despite its many names, the EB-6 is not actually a visa, nor does it provide a direct path to permanent Resident status, Green Card. The U.S. government will allow a qualified international entrepreneur to be paroled into the U.S. without having to apply for and obtain a related visa at a U.S. consulate. The classification allows foreign entrepreneurs to remain in the U.S. for a period of up to 30-months, extendable to up to (5) five years.
Requirement for the EB-6 classification are pretty straightforward, mandating only that the applicant own at least 10% of a U.S. business which was formed within the last five years of the application filings, and which has received a minimum of $250,000 in investment from established U.S. investors or at least 4100,000 through qualified government awards or grants.
- Inadmissibility, criminal records, prior immigration violation
In general, any applicant for admission to enter the U.S., whether on immigrant or non-immigrant status, must be admissible to the U.S. An applicant must not have violated U.S. immigration law at any time in the past, has no criminal records, and is not public burden on the U.S. government.
- Ownership Requirements:
- The entrepreneur must play an actively involved central role in the US business entity, playing a role in the direction, growth and operations of the Company.
- The applicant must also own at least 10% of the US business at the time of application filing.
- The entrepreneur is exclusively permitted to work for the US entity under which he was granted parole status. Should the foreign entrepreneur resign from his position with the company or, for example accept an immigrant visa-based employment position with another firm, than he or she must leave the US and re-enter under the new visa.
- Business Requirements:
Because the EB-6 program is considered an employment-based program, there are 3 basic requirements that the employing start-up must meet in order for the foreign entrepreneur to qualify for employment-based parole with that entity:
- The US based company must have been created within the five years immediately preceding the filing date of the alien’s initial parole application, hence the “Start-Up” name that is occasionally given to the program.
- The US Company must have been doing business since it was formed. This means that companies that were formed within the 5-year period that have not been doing business are ineligible, and
- The Company must be able to prove that it will benefit the US economy by demonstrating the possibility for rapid growth and job creation. It must also be able to sustain the applicant and his family, as they are required to maintain a household income greater than 400% of the federal poverty for their household.
- Each business can only have up to three entrepreneurs working on parole status at a time.
- Investment and Financial Requirements:
In addition to owning the business and demonstrating that it is capable of growth, applicants and the employing US entity must also meet certain financial requirements. While these financial requirements are on par with those typically expected from other visa programs, there are some specific requirements that are unique to the parole program.
First, there are two sources which are deemed acceptable under the parole program, each with its own minimum amount:
- Either, the business needs to have received a minimum qualified investment of at least $250,000 from one or more established U.S. investors within the 18 months prior to the filing of the application. This investment may be from venture capital firms, angel investors, or start-up accelerators that have a history of investing substantially into successful start-ups.
- Or, during the same 18-month period preceding the filing of the application, a qualifying business could alternatively have received at least $100,000 through one or more qualified government awards or grants from either Federal, State or local government entities.
Length of Stay
- Initial Parole Duration- 30-Months
Once an initial parole application is approved, the entrepreneur is granted an initial period of parole of up to 30 months, or two and a half years. This parole also extends to the applicant’s spouse and children, although children are not permitted to work during their stay in the United States. Spouses however, can apply for work authorization, which, if approved, will be valid for the duration of the parole period.
- Extending the Stay beyond the 30 Months or Re-Parole
Much like other traditional visa programs, entrepreneurs who have been granted parole can apply to extend or renew their parole with re-parole. Valid for an additional 30-month period, the re-parole requirements mirror those of the initial filing, with all initial requirements still necessary, although ownership requirements are reduced to 5%.
Note that a parolee must maintain a household income greater than 400% of the federal poverty line for his or her household size as a condition of parole.
However, the business entity must also have met at least one of the following additional criteria:
- During the applicant’s initial parole period, the US entity must have collected at least $500,000 in qualifying investments, qualified government grants or awards, or a combination of these types of funding.
- As with other employment-based visas, the primary focus of the program is to stimulate the economy by creating jobs to boost the local market. Therefore, the company needs to have created a minimum of five qualified jobs during the parole period.
- The company otherwise needs to prove that it has been capable to reaching its financial projections, demonstrating that it has reached at least $500,000 in annual revenue and revenue growth averaging a 20% increase.
Change of Status
If the parolee is to obtain some kind of non-immigrant or immigrant status, s/he would have to leave the country and return with a valid visa in that new status.
Immediate Family members
Spouses and children of the entrepreneur seeking parole as derivatives must individually file a Form I‑131, Application for Travel Document, with evidence of the qualifying familial relationship with the entrepreneur and evidence meriting a grant of parole in the exercise of discretion. The spouse and children will be granted parole for same period granted to entrepreneur. A spouse may also file a Form I-765, Application for Employment Authorization, and if granted, be able to lawfully work in the U.S. Children under the age of 18 cannot obtain work authorization.
How many applicants per company?
No more than three entrepreneurs may be granted parole based on the same business entity. USCIS will consider and weigh all evidence to determine whether an alien’s presence in the U.S. will provide a significant public benefit and whether a favorable exercise of discretion is warranted. If granted, the entrepreneur would receive employment authorization that would be limited to the business entity.
What forms are used to apply?
An entrepreneur can apply for parole by submitting a new Form I-941 Application for Entrepreneur Parole.
What if the Entrepreneur is not employed by the same company?
The entrepreneur parolee must immediately notify USCIS in writing if he or she will no longer be employed by the start-up entity or ceases to possess a qualifying ownership stake in the business entity. USCIS may terminate parole at any time, either automatically without notice, or with written notice. The investment and revenue amounts are to be automatically adjusted every three years by the Consumer Price Index. There is no appeal right from a denial of parole, and no motion to reopen a denial of parole will be considered by the U.S. government.
Disclaimer. Nothing in related to the enclosed information should be construed and or considered as legal advice for any individual, case, or situation. The following information is prepared for advertisement use only. The information is intended ONLY to be general and should not be relied upon for any specific situation. For legal advice on your specific situation, we encourage you to consult an attorney experienced in the area of Business Law.