Obama Administration Proposes New Immigration Rules for Foreign Startup Founders

startup

The U.S. Citizenship and Immigration Services (USCIS), an agency under the Department of Homeland Security (DHS) is proposing to amend its regulations implementing the Secretary of Homeland Security’s discretionary parole authority to increase and enhance entrepreneurship, innovation, and job creation in the United States.

The rule took advantage of a provision in the Immigration and Nationality Act that “grants the Secretary of Homeland Security the discretionary authority to parole individuals into the United States.”

The proposed rule would add new regulatory provisions guiding the use of parole on a case-by-case basis with respect to entrepreneurs of start-up entities whose entry into the United States would provide a “significant public benefit through the substantial and demonstrated potential for rapid business growth and job creation.”

Such potential would be indicated by, among other things, the receipt of significant capital investment from U.S. investors with established records of successful investments, or obtaining significant awards or grants from certain Federal, State or local government entities, said DHS.

If granted, parole would provide a temporary initial stay of up to 2 years (which may be extended by up to an additional 3 years) to facilitate the applicant’s ability to oversee and grow his or her start-up entity in the United States.

A subsequent request for re-parole would be considered only when the entrepreneur and his or her start-up entity continues to provide a significant public benefit as evidenced by substantial increases in capital investment, revenue, or job creation.

The entrepreneurs would need to meet certain conditions to be granted visas. For instance, their U.S. startup must be less than three years old and they must hold at least a 15 percent stake in the company while also maintaining a “central and active role in its operations.”

The startup must also have received at least $345,000 in funding from an investor and/or at least $100,000 in government grants to show “substantial potential for rapid growth and job creation.”

DHS believes that a regulatory process for seeking and granting parole in this business-creation context—including by establishing criteria for evaluating individual parole applications on a case-by-case basis—is important given the complexities involved in such adjudications and the need for guidance regarding the general criteria for eligibility by the start-up entrepreneurs, entities, and investors involved.