New USCIS Proposed Rule on Parole for Start-Up Entrepreneurs

By: Robert Gard

 

America is worldrenowned for its entrepreneurial business spirit, and this spirit is fueled in large part by immigrants. In every economic census since 1880, immigrants are more likely to be self-employed than the nativeborn population. While some of these immigrant entrepreneurs were highly educated, many were not.

In fact, the only characteristic they share is the courage to leave their home countries and the drive and determination to start a new life in the United States. One out of 10 immigrant workers owns a business. Immigrants also tend to start their own businesses with more capital. They’re more likely to hire employees, though they hire fewer, on average, than their U.S.-born counterparts. The first battle that would-be immigrant entrepreneurs face is the battle to get into the United States in the first place.

The collective U.S. immigration laws and regulations have never made it easy for entrepreneurial immigrants to open a business in the United States. A “start-up visa” specifically meant to facilitate immigration for proposed start-up entrepreneurs has long been sought, and has garnered bipartisan support in Congress, but it has not become a reality due to the political infighting between the two major political parties. Faced with the usual Congressional deadlock, the Obama Administration has once again been forced to seek some sort of limited administrative remedy until more reasonable heads prevail in Congress, in order to maintain U.S. competitiveness in a global economy, where several other nations have developed programs to welcome immigrant entrepreneurs.

If aspiring business owners with solid business plans can’t move to the U.S., it’s a safe bet other countries will welcome their ideas, talent, and capital.

On August 26, 2016, the Department of Homeland Security (through its subordinated agency, USCIS) released a proposed rule would allow DHS to use its existing discretionary statutory parole authority to grant parole (temporary permission to be in the United States) and employment authorized status on a discretionary basis to entrepreneurs meeting various criteria. The proposed rule could benefit an estimated 3,000 entrepreneurs each year. The proposal was mentioned in President Obama’s November 2014 announcing a series of executive actions on immigration.

The proposal uses the President’s parole broad power to grant the right to stay and work to individuals when granting the benefit will provide a significant public benefit. The public will have 45 days to comment beginning on 29 August 2016. Presumably, the goal is to release a final regulation before the end of the year. Parole for Entrepreneurs will be made available to applicants who are founders of start-ups if the following conditions are met:

1. The founder has received at least $345,000 in capital investment from US investors with established records of successful investments or obtained $100,000+ in awards or grant funding from federal, state or local economic development agencies. Lesser amounts are possible if compelling evidence can be provided that the approval would provide a significant public benefit through the substantial and demonstrated potential for rapid business growth and job creation.

2. The start-up must be less than three years old when the initial application for parole is filed.

3. The entrepreneur must have an initial equity stake in the start-up of 15% and have an “active and central role” in the business.

4. Up to three founders per start-up business entity will be eligible for parole.

5. Entrepreneurs will be authorized to work “incident to status” with just an (employment authorized/endorsed) I-94 card instead of having to apply (file a form I-765) for an employment authorization document. Employment is only authorized at the start-up business entity that is the subject of the application for parole.

6. Spouses and minor children can also get parole status. Spouses can also apply for an employment authorization document. Children of the principal parolee are NOT authorized to work.

7. Parolees must maintain a household income of 400% of the U.S. Department of Health and Human Services (“HHS”) poverty level for a family the size of the parolee’s family. The spouse’s income may be included.

8. Applicants will be granted an initial stay of up to two years; with a possible single extension of up to three years. Parolees are authorized to work for up to 240 days while the re-parole/extension application is pending.

9. To get an extension, an applicant would need to show the start-up has shown signs of “significant growth” since the initial grant of parole and the start-up continues to have substantial potential for rapid growth and job creation. The entrepreneur’s equity stake can decline to 10% from the initial 15%. The start-up would continue to have to show potential for rapid growth and job creation which can be shown in a variety of ways including receiving $500,000 in new investments, generating $500,000 per year and growing at a 20% pace, or creating ten or more full time jobs for U.S. workers.

10. USCIS estimates about 3,000 per year will be able to take advantage of the new program. There is no limit, however, on the number of applications that will be accepted and approved.

11. USCIS is creating a new Form I-941 to apply for Parole for Entrepreneurs status. Biometrics will also need to be provided. The proposed filing fee will be $1200 plus the biometrics fee (presumably less than $100). Applicants will be provided a travel document.

12. Applicants can file either from inside the U.S. or outside the country. If outside the U.S., biometrics will need to be collected at an overseas USCIS office. Parole is not considered to be an admission to the U.S. so if one seeks to convert to a nonimmigrant status or permanent residency, consular processing would likely be needed.

13. This is a discretionary benefit and USCIS will NOT allow an appeal or a motion to reopen to be filed in the event of a discretionary denial. USCIS will also not guarantee a chance to respond or reply to a request for evidence or a notice of intent to deny. However, they may file a motion to reopen on their own and may issue Requests For Evidence (“RFEs”) and Notices of Intent to Deny (“NOIDs”) at their discretion.

14. Material changes, such as the closing of the start-up business, must be reported to USCIS and USCIS will automatically revoke a previously granted parole if an extension is not timely filed or the parolee’s employment with the start-up terminates. Other material changes reported could lead to the termination of the parole status subject to the discretion of USCIS.

Quick Notes:

The American Immigration Council (“AIC”) has issued a fact sheet attempting to answer the question, “Why don’t the undocumented immigrants just get in line?”

Why Don’t They Just Get In Line? There Is No Line for Many Unauthorized Immigrants

Many Americans wonder why all immigrants do not just come to the United States legally or simply “get in line” if they are unauthorized. These suggestions miss the point: There is no line available for unauthorized immigrants and the “regular channels” do not include them.

No “line” is available for the vast majority of unauthorized immigrants.

Immigration to the United States on a temporary or permanent basis is generally limited to three different routes: employment, family reunification, or humanitarian protection. While the U.S. immigration system is generous, each of these possibilities is highly regulated and subject to numerical limitations and eligibility requirements. Most unauthorized immigrants do not have the necessary family or employment relationships and often cannot access humanitarian protection, such as refugee or asylum status.

Employment-based immigration requires a U.S. employer to request specific foreign workers

To come to the United States for employment purposes— either temporarily or permanently— foreign workers must generally have a job lined up with an eligible employer who will sponsor them. An employer can request permission to bring in specific qualified foreign workers, but only if they meet the requirements, such as job skills and education level, and if the employer cannot find a qualified U.S. worker to take the job first.

Most of the qualifying professions for permanent immigration require high levels of education and professional experience, such as scientists, professors, and multinational executives. There is a limited number of temporary visas for highly skilled or internationally recognized workers. There are also temporary, seasonal opportunities for agricultural workers and certain other “less skilled” workers. In most of these cases, an employer must petition for the worker.

Family-based immigration is limited to certain close family relationships and is numerically restricted.

Qualified family members in the United States can seek permission to bring in certain eligible foreign-born family members. U.S. citizens can petition for their spouses, parents, children, and siblings. Lawful Permanent Residents (LPRs, or “green card” holders) can petition for their spouses and unmarried children. There are always visas available for the spouses, parents, and minor children of U.S. citizens, but for all other family categories there are annual numerical limits. In all cases, the petitioning family member in the United States must demonstrate an income level above the poverty line and must commit to support the family member they are seeking to bring to the United States. The foreign-born persons wishing to immigrate must meet eligibility requirements as well.

Most people fleeing their home countries cannot access humanitarian protection.

Each year the United States sets a numerical limit on how many refugees will be admitted for humanitarian reasons. To be admitted as refugees, individuals must be screened by multiple international and U.S. agencies and prove that they have a “well-founded fear of persecution based on race, religion, membership in a particular social group, political opinion, or national origin.” Asylum seekers are individuals already in the United States who fear returning to their home countries, and they must prove they meet the definition of a refugee. An immigrant does not qualify as a refugee or an asylee because of poverty or difficult economic conditions in their home country. There are limited forms of temporary humanitarian protection available, but these are rare.

Even those who can get in line are subject to long backlogs and waits

The demand from both family members and workers who want to immigrate to the United States is typically higher than the number of slots available each year. In addition, there is a maximum number of employment-based and family-sponsored preference visas that can be issued to citizens of any one country in a single fiscal year. No country can receive more than seven percent of the visas available for the year. This results in significant backlogs for most family members and some workers hoping to enter the United States legally, with some immigrants from certain countries waiting decades.

As of May 2016, for most countries, unmarried children of U.S. citizens must wait more than five years and siblings of U.S. citizens must wait more than 10 years. People from countries with high levels of immigration to the United States—Mexico, China, India, and the Philippines—generally have longer waiting times. For example, married children of U.S. citizens from Mexico must wait more than 20 years for a visa to become available, and Filipino siblings of U.S. citizens currently wait about 25 years.##