Immigrantly

Immigration thoughts from an Immigration Lawyer.

New Immigration Status for Entrepreneurs at a Start-up Company

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On January 17, 2017, the Department of Homeland Security published International Entrepreneur Rule which is the closest to the “Startup Visa” that was proposed years ago. This new rule will allow entrepreneurs at a start-up company to stay and work in the U.S. for up to 5 years. This new rule takes effect on July 17, 2017. 

What Does the New Rule Offer?

  • Initial 30 months of work authorization (parole status) in the U.S. to foreign entrepreneurs at a start-up entity, with the possibility to renew for an additional 30 months (=total of 5 years).
  • Spouse and minor, unmarried children may qualify for the parole to stay in the U.S., though only the spouse may get employment authorization.
  • One entity can apply for a maximum of 3 entrepreneurs.

Eligibility Requirements:

  1. Applicant must possess at least 10 percent ownership interest in the start-up entity at the time of adjudication;
  2. The start-up entity must be formed within the 5 years immediately preceding the date of the filing;
  3. Applicant must have active and central role (= cannot be a mere investor); AND
  4. The entity must prove one of the followings:
    1. Receipt, within 18 months immediately preceding the filing of an application for initial parole, of capital investment totaling at least $250,000 from qualified U.S. investors (e.g. venture capital firms, angel investors, or start-up accelerators)
      • Qualified Investor:
        • Must be a U.S. citizen or Legal Permanent Resident (LPR), or an entity that is majority owned or controlled by U.S. citizens or LPRs;
        • Made investment in start-up entities in exchange for equity comprising a total of at least $600,000 within 5 years preceding the application; AND
        • Has at least 2 invested entities each created at least 5 full-time jobs or generated at least $500,000 in revenue with average annualized revenue growth of at least 20 percent.
    2. Receipt, within 18 months immediately preceding the filing of an application for initial parole, of monetary awards or grants totaling at least $100,000 from government entities that typically provide such funding to U.S. businesses for economic, research and development, or job creation purposes.
    3. Alternative criteria showing that the entity will provide a significant public benefit to the U.S., such as:
      • Number of users or customers;
      • Revenue generated by the start-up entity;
      • Social impact of the start-up entity;
      • National scope of the start-up entity;
      • Positive effects on the start-up entity’s locality or region;
      • Success using alternative funding platforms, including crowdfunding platforms;
      • The applicant’s academic degrees;
      • The applicant’s prior success in operating start-up entities as demonstrated by patented innovations, annual revenue, job creation, or other factors; and/or
      • Selection of the start-up entity to participate in one or more established and reputable start-up accelerators or incubators.

Application Process and Fees:

  • If the applicant is in the U.S.:
    • Submit Form I-941 -> go to biometrics appointment (fingerprint) -> get approval -> depart the U.S. -> visit a U.S. consulate in order to obtain travel documentation (e.g., a boarding foil) -> enter the U.S.
  • If the applicant is outside of the U.S.:
    • Submit Form I-941 -> go to biometrics appointment when visiting a U.S. consulate in order to obtain travel documentation (e.g., a boarding foil) -> enter the U.S.
  • Application fees:
    • Principal Applicant: $1,200 (I-941) + $85 (biometrics)
    • Dependent: $575 (I-131) + $85 (biometrics: only for age 14 or older)
    • Employment Authorization for spouse: $410 (I-765)

Cautions:

  • The applicant’s status is a “Parole” status and therefore, the applicant may not change to other non-immigrant or immigrant status within the U.S. The applicant must first depart the U.S. in order to change to other status.
  • The applicant must apply for Advance Parole before oversea traveling.
  • Applicant must maintain a household income that is greater than 400% of the Federal poverty line, which is currently about $64,000 for a household of 2 people.

Renewal Eligibility (a simple summary):

  • The start-up entity must continue to operate;
  • The applicant must have at least 5 percent ownership interest in the entity; and
  • The entity must show either:
    • At least $500,000 additional investment during the initial parole period;
    • At least $500,000 in annual revenue with average annualized revenue growth of at least 20 percent;
    • Created at least 5 full-time jobs; or
    • Alternative criteria.

Personal Comments:

Although not all entrepreneurs can meet all the requirements, the requirements in the final rule are less restrictive than the proposed rule. This is truly an exciting opportunity for the start-up communities. I sincerely hope that this new status will open the door for many entrepreneurs who have great potentials but do not qualify for a working visa under the current immigration laws. I wish the best luck to all the entrepreneurs in the world, and I welcome any questions or comments.

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