In order to stimulate the market and to increase the presence and the activity of foreign entrepreneurship in the United States, the U.S. Citizenship and Immigration Service has developed the International Entrepreneur Parole (IEP) regulation. It was first introduced back in 2017, but over the following years, it went through considerable turbulence regarding its entry into force due to changes in the federal administration at the time.
Finally, in May 2021, U.S. Citizenship and Immigration Service announced the withdrawal of the change that would have abolished the program. As a result, the International Entrepreneur Parole Program remains an open option for foreign entrepreneurs, who want to develop their high-potential businesses and grow them in the United States. However, due to the fact that this opportunity has emerged relatively recently, in addition to undergoing many changes and proposals, the questions about the details of this program are quite frequent. What requirements must be met, does IEP parole include family members, and is it really as simple an option as it seems?
What exactly is International Entrepreneur Parole?
The International Entrepreneur Parole Program is an initiative, which allows foreign nationals to legally start their business in the United States. The parole, granted under the IEP based in federal regulations, is considered by the Department of Homeland Security (DHS) individually, case-by-case. The immigration status, called “Parole” is granted to highly promising foreign entrepreneurs who are able to demonstrate that their business will bring significant public benefit to the United States, meaning the business is for a humanitarian cause. When qualified, they can spend up to 30 months living in the United States, developing and scaling their business entities. The initially obtained status can be however renewed for additional 30 months, thus summing up to the period of five years (so-called “re-parole”).
The International Entrepreneur Parole Program is a very attractive perspective, taking into account that it encourages all sorts of entrepreneurial business activities. Contrary to many employment visa types, IEP does not impose specific industry requirements.
The IEPP benefits for the U.S economy
The entrepreneurial spirit is a central factor in the United States’ fundamental values. This has been highlighted even in President Obama’s last State of the Union Address, where he famously said: “America is every immigrant and entrepreneur from Boston to Austin to Silicon Valley, racing to shape a better world. That’s who we are.” The International Entrepreneur Parole Program resonates with these words as it aims to stimulate entrepreneurial activity by foreign entities that can bring many benefits to the United States. Not only, does it lead to an increase in market competitiveness through the introduction of the most innovative organizations, but also results in a significant increase in job creation. According to the U.S. Citizenship and Immigration Service estimations, about 2,940 foreign nationals will fall under the International Entrepreneur Parole Program (IEPP) this particular regulation, is expected to have a significant impact on the number of created jobs.
Does the IEPP create a new visa category?
Although the International Entrepreneur Parole Program is considered by some to be the equivalent of a “start-up visa”, it does not technically create a new type of visa. It is rooted in the Department of Homeland Security’s already existing authority to use parole in case of aliens, who qualify for temporary admission. According to federal law, U.S. Citizenship and Immigration Service is eligible to use parole for the temporal admission of the aliens in case of humanitarian or public benefit reasons.
Who is eligible for the IEPP?
There are certain requirements that must be met in order to be granted the International Entrepreneur Parole. Some of these eligibility requirements include:
- Foreign national posses at least 10% ownership interest in a start-up entity created within the past five years in the United States;
- The start-up must have substantial potential for rapid growth and job creation;
- Foreign national has a central and active role within this start-up;
- Demonstrated evidence of the start-up having a significant public benefit through the fact that it has qualified investors.
The last requirement can be met by proving that within the eighteen months immediately preceding the IEP application, the start-up has either received an investment of at least $250,000 from U.S. qualified investors or at least $100,000 from governmental grants and/or awards. The awards and grants can be given for such aspects as job creation, business development, or other significant business activities.
If the monetary requirements are only partially met, the international entrepreneur must demonstrate job creation and growth potential of the start-up by other means and evidence. Additionally, the entrepreneur must also show that they “merit a favorable exercise of discretion.”
What needs to be pointed out is that per one start-up, only three entrepreneurs can be paroled in the United States under the International Entrepreneur Parole Program. The international entrepreneur eligible for parole has to work for their business exclusively.
Can a person with a nonimmigrant status apply for the IEPP?
The person holding a nonimmigrant status can apply for the International Entrepreneur Parole Program. Only if the nonimmigrant status is viable, the person is allowed to apply from within the United States. However, what must be pointed out is that the person cannot hold nonimmigrant status and be an international entrepreneur with parole at the same time.
What are the requirements to obtain a so-called “re-parole”?
In order to obtain parole renewal (so-called “re-parole”) for an additional period of time of up to 30 months, foreign nationals must:
- have at least 5% ownership interest in the start-up;
- continue to have a central and active role within the start-up;
- prove that during the initial International Entrepreneur Parole period, the start-up:
- has received more qualifying funding and/or grants and awards (at least $500,000),
- demonstrate annual revenue of at least $500,000 in the United States and a growth of 20% in annual revenue,
- prove to have created at least five full-time jobs in the United States.
If the above-mentioned requirements for a re-parole are only partially met, foreign national still has a chance of being qualified for the additional period of up to 30 months, provided that the evidence of the start-up’s rapid growth and job-creation potential is demonstrated.
Upon completion of the maximum period of the International Entrepreneur Parole Program, a foreign entity must leave the United States. In order to apply for a visa or a green card, the immigration formalities for becoming a lawful permanent resident (LPR) must be handled from the foreigner’s home country.
Who can be qualified as an U.S. investor for the purpose of IEPP requirements?
One of the key requirements in qualifying for the International Entrepreneur Parole Program is proving a significant investment of at least $250,000 from qualified U.S. investors. To be considered as such, a qualified investor needs to either be a U.S. citizen, permanent resident, or an entity based in the United States. Additionally, the qualified investor must have made investments of at least $600,000 in startups that generated no less than $500,000 in revenue with at least 20% of annualized revenue growth and created at least five jobs. These last requirements for qualified investors must be fulfilled within five years preceding the International Entrepreneur Parole application.
Does IEPP parole include family members?
Naturally, this is crucial to many individuals considering the International Entrepreneur Parole application. Having been granted the International Entrepreneur Parole, foreign nationals’ dependents – spouses and children (provided they are under 21 years of age and unmarried) – are also eligible to stay in the United States. However, U.S. Citizenship and Immigration Service points out that granting parole to the spouse and children of the foreign national will be determined by verifying if “maintaining their family unity provides a significant public benefit because it further encourages the foreign national to operate and grow their business in the United States, and to provide the benefits of such growth to the United States”. Importantly, in that case, only the spouse of the foreign national with parole is eligible for a work permit application. The children of the entrepreneur under the International Entrepreneur Parole are not allowed to apply for work authorization in the United States.
How to apply for the International Entrepreneur Parole Program?
In order to apply for the International Entrepreneur Parole Program, one must fill out several documents (Form I-941, Form I-131, Form I-765, and Form I-9) and provide evidence demonstrating one’s eligibility for the IEPP.
The first, Form I-941, is an application for entrepreneur parole. It is used for applying for the initial parole, but also for amending the application or asking for an additional period of parole. In the case of the initial application, international entrepreneurs will have to provide USCIS with information regarding their role at the start-up, ownership interest, personal identity information, and documentation demonstrating the fact that the start-up meets the IEPP requirements. The filing fee amounts to $1,200.
Form I-131 is an application for Travel Documents. This form should be for the dependents (spouse and/or children) of the international entrepreneur applying for IEPP. The evidence demonstrating the relationship between the dependents and the IEPP applicant must be included. The filing fee amounts to $575.
Application for Employment Authorization, Form I-765, is the document that should be filled out by the applicant’s spouse after Form I-131 approval. This form should not be submitted unless the international entrepreneur has received verified parole. If the form is submitted before the spouse has been paroled into the United States, the application may be denied without returning the fees.
The last form, Form I-9 is an employment eligibility verification, which should be filled out if the applicant for the IEPP is an employee. The document establishes identity and employment authorization for employment with a specific employer for an employee who is an entrepreneur granted parole.
Is the IEPP as simple as it seems?
Although the International Entrepreneur Parole Program may sound like a perfect, easy way to develop your business in the United States, in reality, it turns out it can be only a misleading impression. There are several aspects of the required criteria, which may be very challenging to demonstrate in the application. Proving the fact that investment in the entity comes from qualified US investors is definitely one of the demanding parts of the entire process. Qualified investors, such as venture capital firms, start-up accelerators, or angel investors must be ready to provide evidence in the form of extensive documentation demonstrating investments in the preceding five years prior to the application if: the investments in start-up entities were made in exchange for equity, convertible debt or other security convertibles into equity commonly used in financing transactions within their respective industries comprising a total in this five year period of at least $600,000; and after the investment by, at least two such entities each created at least five qualified jobs or generated at least $500,000 in revenue with average annualized revenue growth of at least 20 percent. Thus, in addition, documentation must be obtained not only from qualified investors but also from organizations in which these investors have invested. In practice, this creates very difficult formal conditions that can highly complicate a seemingly easy application process.
Due to the narrow application criteria and the parole status as a whole, if one qualifies under the International Entrepreneur Parole Program, it is generally better to apply for the O-1 status. At PassRight, we will be happy to guide you through the process of obtaining an O-1 status, which is a more stable option for innovative, disruptive individuals.