New dollar eligibility criteria for investment amounts, qualifying investors, and re-parole considerations under the International Entrepreneur Rule (IER) will take effect on October 1, 2022.

The Biden Administration relaunched the IER in May to grow the economy through job creation. The IER makes it possible for certain promising start-up founders and entrepreneurs to come to the United States through a discretionary parole program and begin growing their companies.

The IER has specific dollar eligibility criteria for investment amounts, qualifying investors, and re-parole considerations. Published in 2017, the IER stated that these amounts would be automatically adjusted every three years by the Consumer Price Index for All Urban Consumers and posted on the USCIS website. On September 13, 2021, the first adjustments were published in the Federal Register.

The new numbers, listed on the USCIS website, will take effect on October 1, 2022, and are as follows:

  • If relying on an investment from a qualifying investor, the amount is increasing from $250,000 to $264,147.
  • If relying on a government award or grant, the amount is increasing from $100,000 to $105,659.
  • The revenue amount for consideration of re-parole is increasing from $500,000 to $528,293.
  • Qualifying investors will need to show aggregate investments of no less than $633,592 (rather than $600,00) over five years. They also will need to show that at least two of those entities created five jobs or generated at least $528,293 (instead of $500,000) in revenue.

The increases are approximately 5.6 percent overall.

If you have questions about the IER parole program, Jackson Lewis attorneys are available to assist.

The Biden administration is breathing life into the International Entrepreneur Rule (IER). It has announced that the IER will be launched anew, because it will “strengthen and grow our nation’s economy through increased capital spending, innovation, and job creation.”

Although there were stops and starts, the IER was never actually eliminated by the Trump administration. Instead, it was criticized and largely ignored.

The purpose of the IER is to improve the nation’s economy by making it possible for certain promising start-up founders and entrepreneurs to begin growing their companies in the United States. The IER amends the regulations on discretionary parole to do so.

A qualifying entrepreneur will be paroled into the United States for an initial 30-month period (with a possible extension) and will have work authorization incident to status. To be eligible, an applicant:

  • Must have a substantial (at least 10 percent) ownership interest in the start-up; and
  • Must have an active and central role in the operations and future growth.

The entity:

  • Must have been recently created (within five years of the application); and
  • Must prove that it has significant investment from qualified and established U.S. investors (at least $250,000) or the receipt of significant awards or grants from federal, state, or local governments (at least $100,000).

USCIS is ready for applications and the administration is planning a public relations campaign, including information sessions and outreach activities, to publicize the IER opportunity. The regulations can be found at 8 CFR 212.19 and the Application for Entrepreneur Parole form is on the USCIS website.

More than 50 percent of start-ups in the United States with a $1 billion valuation were founded by at least one immigrant. The United States is a popular destination for start-up founders, but many other countries (including Canada, the United Kingdom, China, Japan, Israel, Germany, Australia, and New Zealand) are competing to entice entrepreneurs to their shores. Other countries have sought to take advantage of the Trump administration’s criticisms of the IER and less hospitable approach to legal, employment-related immigration. Reaffirming the IER is an important step to the United States meeting the competition.

If you have any questions about the IER, Jackson Lewis attorneys are available to assist you in strategizing and submitting applications.

While the Trump Administration is making it more difficult and less attractive for entrepreneurs to start their businesses in the United States (in the name of “Buy American and Hire American”), other countries are rolling out the welcome mat to entrepreneurs.

In May 2018, the Administration proposed a rule to remove President Obama’s International Entrepreneur Rule (IER). While the IER is still in effect due to litigation brought by the National Venture Capital Association, no applications have been granted under the IER. The Administration likely will eliminate the IER soon after completing review of the public comments it received.

Other countries, including the United Kingdom, China, Japan, Israel, Germany, Estonia, Australia, and New Zealand, are taking advantage of the attitude change in the U.S., offering start-up visas with eligibility requirements similar to the once-touted IER.

For instance, in Canada, founders of start-ups can become permanent residents in as little as 12 months. The key requirement is sponsorship by one of a group of pre-approved Canadian investor organizations. While the application is being reviewed, the entrepreneur may come to Canada and start working in temporary status. Mezyad Almasoud, a Kuwaiti national with a Yale University degree, thought he had “failed” when he realized he would not be able to stay in the United States to build his technology start-up. He moved his family and his business to Vancouver, where he is hiring Canadians.

The United Kingdom will launch its start-up visa in the spring of 2019. There, too, the entrepreneur must be endorsed by a university or an approved business sponsor. The United Kingdom plans to double the number of Exceptional Talent visas available in order to attract more highly skilled individuals.

Israel is offering a 24-month innovation visa that can lead to a special Expert Visa (extendable for another five years) with such perks as a $20,000 relocation bonus and Hebrew lessons.

Australia has a Venture Capital Entrepreneur process for people who have venture capital funding from members of the Australian Venture Capital Association Limited.

Finally, New Zealand offers an Entrepreneur Work Visa that can lead to residence in three years.

Same-sex couples and unmarried couples also are getting a warmer welcome in other countries, which are offering work permits to partners of skilled workers. This is happening just as the United States is cutting down on work authorization for spouses by moving toward eliminating H-4 EADs and denying visa to same-sex partners of U.N officials.

Bipartisan legislation has been introduced in Congress to create a Start-Up visa. To date, those efforts have stalled.

Jackson Lewis will continue to follow Congressional efforts and the final fate of the IER.

On May 29, 2018, DHS published a proposed rule to remove the International Entrepreneur Parole Program (IER). This was hardly unexpected.

Since January 25, 2017, when President Donald Trump issued the Border Security and Immigration Enforcement Improvements executive order, it has been clear that the Administration would seek to eliminate the IER as being an inappropriate use of DHS parole authority. In July 2017, DHS attempted to delay the effective date of the rule until March 14, 2018, while it developed its proposal to eliminate the rule. On December 1, 2017, the U.S. District Court for the District of Columbia in National Venture Capital Association v. Duke ruled that DHS would have to continue to accept IER applications. To date, DHS has received 13 applications and none of the applicants have been granted parole.

DHS has justified the removal of the IER on several grounds:

  • Parole authority is not appropriate for implementing a complicated program for entrepreneurs and business start-ups that would be best implemented by Congress;
  • Entrepreneurs should use existing legislative vehicles such as the E-2, E-5, or National Interest Waiver programs to the extent possible; and
  • DHS should not use its limited resources to implement a policy does not support Trump’s chief objective of protecting U.S. workers.

Despite the fact that no IER applications have been approved, DHS has proposed various options for the termination of the program. Its preferred option is to simply end parole on the effective date of the final rule. There are also proposed provisions for those who have pending applications. These individuals may withdraw their applications and have their fees returned or leave their applications in place and argue that they are entitled to discretionary parole even without the IER.

Elimination of the IER was set out in the DHS’ Spring 2018 Regulatory Agenda, which also included:

  • Establishing electronic registration for the Cap H-1B program;
  • Changing the focus of the H-1B program to the “best and brightest” and protecting the interests of U.S. workers;
  • Eliminating H-4 EADs;
  • Updating the USCIS fee schedule;
  • Modernizing the EB-5 Immigrant Investor Program;
  • Reforming Practical Training programs for students; and
  • Mandating more electronic filings.

Eliminating H-4 EADs is next up. That proposed new rule is expected in June 2018, followed by the Cap H-1B electronic registration rule in July 2018.

Please contact a Jackson Lewis attorney if you have any questions about this and other developments.

 

The DHS is giving with one hand and taking with the other. In response to the December 1, 2017 federal court ruling in National Venture Capital v. Duke, the DHS is complying and implementing the International Entrepreneur Rule parole program (IER).  At the same time, the DHS is in the final stages of publishing a notice of proposed rulemaking to eliminate the program.

The requirements for IER eligibility are:

  • The entrepreneur must have a substantial ownership interest in the start-up entity
  • The entity must have been created within the past 5 years
  • The entrepreneur must have a central and active role in the entity and be well-positioned to substantially assist with the growth and success of the business
  • The entrepreneur will provide a significant public benefit to the U.S. by showing:
    • Significant capital investment from qualified investors;
    • Significant awards or grants for economic development, research and development or job creation from a government entity; or
    • Overall additional and compelling evidence of the entity’s substantial growth potential

The application process for the IER is:

  • File Form I-941, Application for Entrepreneur Rule, with USCIS
  • Once approved, the entrepreneur must visit a U.S. Consulate abroad to obtain travel documentation
  • In conjunction with the Form I-941, the entrepreneur may submit Advance Parole applications (Forms I-131) to allow their spouses and unmarried children to accompany them to the United States
  • Upon entry into the U.S., the spouse of the entrepreneur may apply for an Employment Authorization Document by filing a Form I-765
  • The forms will be filed at the USCIS Dallas Lockbox facility

How long it will take the USCIS to process these applications is unknown. And what if any grandfathering provisions there will be is yet to be seen.  Regardless, depending upon an individual entrepreneur’s specific circumstances, it may be advisable to take advantage of the current window of opportunity prior to the elimination of the program.

If you need help assessing your situation with regard to the IER, please reach out to the Jackson Lewis attorney. We will continue to monitor developments.

The Trump Administration rule delaying the International Entrepreneur Rule (IER) until March 14, 2018, had been implemented without following the necessary Administrative Procedures Act (APA) Notice and Comment Period regulations and was therefore illegal, a federal court has found.

The Administration has not yet commented on the court’s ruling, but likely will appeal the decision.

Beginning July 17, 2017, the Obama-era IER was to start allowing promising entrepreneurs to come or remain in the U.S. to expand the economy by growing their companies. To be eligible, applicants/entrepreneurs had to prove the potential of their start-ups based upon qualified investments and other compelling evidence. Upon proving significant potential, the applicant could be granted parole and work authorization for up to five years. The IER amended the regulations on discretionary parole by adding provisions that would allow the use of parole on a case-by-case basis for entrepreneurs who can “demonstrate through evidence of substantial and demonstrated potential for rapid business growth and job creation that they would provide a significant public benefit to the United States.” The additional regulation was to be published at 8 CFR 212.19.

This merit-based approach to using the parole authority would seem to be aligned with President Donald Trump’s general desire for a merit-based approach to immigration. However, Trump is also focused on strict enforcement of the immigration laws and eliminating the expansion of discretionary benefits such as parole.  Just before the IER was to go into effect, the Administration introduced the Delay Rule. Not only did the Delay Rule delay the start date of the IER to March 14, 2018, but the Administration noted at the time that it was likely to rescind the IER altogether.

National Venture Capital Association, along with two foreign entrepreneurs, filed suit in the U.S. District Court in D.C. to force the implementation of the IER. “The controversy boil[ed] down to two competing rules,” District Judge James E. Boasberg observed. Because the Delay Rule had been implemented without following the necessary APA regulations, Judge Boasberg found it was illegal.

The Administration argued that the costs involved and the confusion that would be engendered by implementing a rule they planned to rescind constituted “good cause” for skipping the Notice and Comment period. But the court disagreed, particularly noting the government could not rely on its own delay of close to six months from January 20, 2017, until July 2017, to argue “good cause.”

The Administration’s next steps are unknown. It might not be difficult for the Department of Homeland Security to start the program.  Staff training would be required but an IER Form (Form I-941) has already been created although not implemented and changes have already been formulated although not implemented to Form I-9 and the Lists of Acceptable Documents to account for the IER.

Jackson Lewis will continue to provide updates.

The Trump Administration appears to be in the process of eliminating two rules: the H-4 EAD Rule and International Entrepreneur Rule.

In line with President Donald Trump’s “Buy American, Hire American” Executive Order and his aim for a fully “merit-based” visa scheme, a draft regulation that would end the H-4 EAD program (enacted by the Obama Administration in 2015) reportedly is being circulated. The draft regulation would need to go through the Notice-and-Comment period to comply with the Administrative Procedures Act before being adopted, likely some time in 2018.

Under the H-4 EAD Rule, spouses of H-1B beneficiaries who are in the process of getting green cards can obtain work authorization while they wait. This rule is particularly popular among the Indian and Chinese immigrant communities because their waits for green cards can be years long. Beyond allowing H-1B beneficiaries to be two-income families, the ability for spouses to obtain work authorization has been seen by some as encouraging highly skilled workers to remain in the United States. Its elimination could have a major effect on the companies that employ the approximately 100,000 individuals who are in the United States working on H-4 EADs. At this time, there are no details about how the Administration would plan to scale back the program.

Meanwhile, the International Entrepreneur Rule (IER), another Obama Administration rule, was set to go into effect in July 2017. The IER allowed foreign entrepreneurs who met certain standards (and who did not qualify for conventional visas) to come to the United States in parole status to set up new companies. This was seen as a way to expand the economy and allow the United States to compete more effectively for start-ups in the global economy. The Trump Administration, however, questioned this use of the parole authority and delayed the IER’s implementation. In fact, the Administration indicated that it was considering rescinding the IER. It has now been reported that a notice to officially end the rule was sent to the Office of Management and Budget. This is the first step before publishing a draft regulation in the Federal Register for Notice and Comment.

We will continue to monitor these developments and provide updates.

 

In six months, on July 17, 2017, the Department of Homeland Security’s final rule to improve the nation’s economy by making it possible for certain promising start-up founders/entrepreneurs to begin growing their companies in the United States will become effective.

The new rule amends the regulations on discretionary parole by adding provisions that will allow the use of parole on a case-by-case basis for entrepreneurs who can “demonstrate through evidence of substantial and demonstrated potential for rapid business growth and job creation that they would provide a significant public benefit to the United States.” The additional regulation will be at 8 CFR 212.19.

The “entrepreneur” parole will be for an initial 30-month period with the possibility of a second 30-month extension. The entrepreneur will have work authorization incident to his or her parole status. Upon a successful application, dependents also will be granted parole, but spouses would have to apply for work authorization after entry in the United States.

The eligibility criteria for the initial parole include:

  • An applicant must possess a substantial ownership interest (at least 10%) in the start-up entity;
  • An applicant must have an active and central role in the operations and future growth of the entity and cannot be a “mere investor”;
  • An applicant who is lawfully admitted to the U.S. in another status may apply for parole, but will need to leave the U.S. and apply for admission to activate that parole;
  • The entity must have been created “recently” – no more than 5 years prior to the application;
  • The entity must prove it has significant investment from qualified and established U.S. investors (at least $250,000) or the receipt of significant awards or grants from federal, state, or local government entities (at least $100,000). If the start-up partially meets only one of these requirements, the applicant may provide additional compelling evidence of its potential.

A new Form I-941 has been created for the Application for Entrepreneur Parole. President Barack Obama chose to pursue this new rule when attempts at legislation proved impossible. Although Congress is planning to undo a number of Obama Administration rules and President Donald Trump has been critical of the H-1B program. Trump also has said that he would like to “select immigrants based on their likelihood of success in U.S. society and ability to be financially self-sufficient.”

The new entrepreneur rule may be just that sort of selection process.

 

 

 

 

Understanding the scarcity of H-1B visas, early in 2016, the New York City Economic Development Corporation (NYCEDC), in partnership with the City University of New York (CUNY), launched the International Innovators Initiative (IN2NYC) to build a pathway to help international entrepreneurs grow companies and create jobs in the United States, specifically in New York City. The program is now bearing fruit as its first two entrepreneurs are setting up their businesses within the CUNY incubator. Gabor Tankovics, a native of Hungary, will base his company, Dartboard, at LaGuardia Community College and Namisha Bahl from India will begin mentoring students at the City College of New York’s Zahn Innovation Center. Dartboard has created a web application to help individuals manage their student loans. Ms. Bahl is the Director of Integrated Management for Mogul, an international website and hub for women around the world that enables them to connect and share knowledge.

Institutions of higher education are not subject to the limit on H-1B visas as long as the beneficiaries of those visa petitions are contributing to a central mission of the school. Applicants for the IN2NYC program are selected through a competitive process. If selected, they are matched with the appropriate CUNY institution. The entrepreneurs will work on developing their companies while contributing to the schools’ missions by conducting academic research, helping to develop entrepreneurship programs, teaching courses, mentoring students, hiring students as interns or employees in their companies, and participating in community outreach efforts, among other things. The entrepreneurs will partner with the schools’ incubator programs, set up their offices at the institutions and have access to the schools’ support services. To be eligible for the program, and cap-exempt H-1B visas, the foreign entrepreneurs must demonstrate that they have either started a company overseas and want to relocate or expand in the U.S. or that they have been students in the U.S. and have started companies that they wish to grow in the U.S.

At the federal level, the USCIS has proposed the International Entrepreneurship Rule. If enacted, the rule would allow foreign entrepreneurs to enter the U.S. for an initial two-year period if they can demonstrate their startup entities’ potential for rapid growth and job creation. For more on the proposal, see Administration Welcomes Foreign Entrepreneurs with Proposed Rule. The International Entrepreneurship Rule was established on the basis of President Barack Obama’s Executive Order and does not require Congressional action. Observers have said that, due to the bipartisan appeal of supporting entrepreneurship, President-elect Donald Trump may not move to bar the rule.

Please contact your Jackson Lewis attorney for more information about this and other developments.

The Department of Homeland Security has closed out the summer with an encouraging proposal designed to allow certain founders of start-up companies from abroad to come to the U.S. for an initial stay of up to two years to build their business here. In a move recognizing the entrepreneurial spirit embodied by the many foreign individuals who have contributed to making the United States a beacon of innovation and creative ambition, the service released an advance copy of the proposed “International Entrepreneur Rule.” The drafters of the proposal lay out the intended benefits in their introduction: “to increase and enhance entrepreneurship, innovation, and job creation in 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.”

Under the current framework, foreigners wanting to build businesses in the United States must navigate a complex set of visa categories, each of which contains significant limitations. For example, B-1 business visitor status allows foreign businesspeople to enter the country for a much shorter timeframe (typically six months, extendable), and restricts them to non-employment activities; the E-2 investor visa category is only available to individuals holding select nationalities where a bi-lateral treaty exists with the U.S.; and the EB5 “green card investor” visa category requires the foreign individual to put from $500,000-$1,000,000 at risk to qualify. If implemented, the proposed “International Entrepreneur Rule” would provide two years (extendable to five years) of stay in the U.S. to establish and grow a business with a much lower financial commitment ($345,000 capital requirement, which may include investment from qualified U.S. persons or government grants of at least $100,000, or some combination thereof). Under the rule, international entrepreneurs must maintain an active role in the business and at least 15 percent ownership of the enterprise, two requirements that should not present an issue for most new company founders.

While the public must await publication of the proposal in the Federal Register to submit comments within the 45-day comment window, immigration and business advocates can together celebrate the agency’s attention to this fundamental component of maintaining America’s competitive advantage, today and into the future.

Jackson Lewis will continue to monitor developments of this exciting new initiative.