Parole Status for International Entrepreneur

Author Attorney C. Matthew Schulz

Entrepreneurs who come to the US from around the world have a long history of innovation, job creation for US workers, research and development of new technologies, and generally creating new business opportunities for all Americans.

US immigration law provides a few temporary and permanent pathways for these entrepreneurs to come to, and sometimes work, in the United States, either at new businesses they start or as a valued employee at American companies.

One solution is the international entrepreneur parole and that is the subject of this article.

Not a Visa; Not a Green Card

The International Entrepreneur Parole is not a visa or a green card. It is a US law passed by Congress and signed into law by a President. As such, its future is unpredictable, as its history shows.

President Obama created this rule by Executive Order. President Trump revoked it. President Biden reimplemented it. What a future US President or Congress might do is uncertain. That uncertainty creates instability for US business, US investors, and entrepreneurs that makes this immigration path less favorable than other, more established paths.

As the USCIS Policy Manual explains: “Although an individual who is paroled into the United States has not been admitted into the United States for purposes of immigration law, parolees may enter and remain in the United States and may be authorized to work.”

Requirements

1. Applicant

Central and Active Role

The applicant must have a central and active role in the operations of the start-up entity. The applicant must be well-positioned, due to their knowledge, skills, or experience, to substantially assist the entity with the growth and success of its business.

Substantial Ownership Interest

The applicant must have substantial ownership in the start-up entity, which the USCIS considers to be merely at least 10% ownership at the time of filing and maintaining at least 5% during the initial parole period.

Further, no more than 3 entrepreneurs may be granted international entrepreneur parole based on the same start-up entity.

2. Company

The start-up entity must be:

A corporation, limited liability company, partnership, or other entity that is organized under federal law or the laws of any state, and that conducts business in the United States;
Not primarily engaged in the offer, purchase, sale or trading of securities, futures contracts, derivatives, or similar instruments;
Formed within the 5 years immediately preceding the date the applicant filed the initial parole application and lawfully doing business during any period of operation since its date of formation; and
An entity with substantial potential for rapid growth and job creation.

3. Investment

The investment requirement can be satisfied either through: private investment; government grant or grant option; or alternative means.

Private Investment

This requires that one or more qualified investors make a qualifying investment at least equal to the required amount.

The qualified investment must be within the 18-month period immediately preceding the filing of the international entrepreneur parole request.

The required amount is automatically adjusted every 3 years by the Consumer Price Index for All Urban Consumers. The USCIS Policy Manual states $264,147 is the amount on or after October 1, 2021, but that needs to be adjusted by the CPIAUC.

Qualified Investment

To be considered a qualified investment, the investment must be made in good faith and not be an attempt to circumvent any limitations imposed on investments under US immigration law. Further, the investment must be lawfully derived capital in a start-up entity that is a purchase from such entity of its equity, convertible debt, or other security convertible into its equity commonly used in financing transactions within such entity's industry.

A qualified investment does not include an investment, directly or indirectly, from:

The entrepreneur;
The parents, spouse, brother, sister, son, or daughter of such entrepreneur; or
Any corporation, limited liability company, partnership, or other entity in which such entrepreneur or the parents, spouse, brother, sister, son, or daughter of such entrepreneur directly or indirectly has any ownership interest.

Qualified Investor

Only investments from a qualified investor (and not the applicant) count towards the minimum investment amount.

A qualified investor is an individual who is a US citizen, lawful permanent resident, or an organization located in the US that operates through a legal entity organized under US or state law, which is majority owned and controlled, directly and indirectly, by US citizens or lawful permanent residents.

Further, the qualified investor must regularly make substantial investments in start-up entities that subsequently exhibit substantial growth in terms of revenue generation or job creation by demonstrating that during the preceding 5 years:

The qualified investor made investments in start-up entities in exchange for equity, convertible debt, or other security convertible into equity commonly used in financing transactions within their respective industries comprising a total in such 5-year period of no less than the investment amount in the chart below; and
After such investment by such individual or organization, at least two such entities each either created at least five qualified jobs or generated revenue of at least the amount in the chart below with average annualized revenue growth of at least 20 percent.

After October 1, 2021, the minimum investment amount is $633,952 and the minimum revenue amount is $528,293.

An individual or organization is disqualified from being a qualified investor if:

Permanently or temporarily enjoined from participating in the offer or sale of a security or in the provision of services as an investment adviser, broker, dealer, municipal securities dealer, government securities broker, government securities dealer, bank, transfer agent or credit rating agency;
Barred from association with any entity involved in the offer or sale of securities or provision of such services; or
Otherwise found to have participated in the offer or sale of securities or provision of such services in violation of law.

Government Award or Grant Option

Qualified awards or grants are for economic development, research and development, or job creation (or other similar monetary awards typically given to start-up entities) made by a federal, state, or local government entity (not including foreign government entities) that regularly provides such awards or grants to start-up entities.

The qualified government award or grant must be within 18 months immediately preceding the international entrepreneur parole request.

The amount of the government awards or grants after October 1, 2021, must be at least $105,659.

Alternative Option

If the applicant only partially meets one or both of the criteria for qualified investments or qualified awards or grants, USCIS has authority to grant parole if the applicant provides additional reliable and compelling evidence of the start-up entity’s substantial potential for rapid growth and job creation.

4. Significant Public Benefit

There is no statutory or regulatory definition of significant public benefit. Parole determinations are case-by-case discretionary determinations that consider the totality of the circumstances of each case.

Conclusion

US immigration law offers more reliable solutions for entrepreneurs that should be considered. Other articles on this website discuss solutions for experienced executives and managers, as well as for individuals of extraordinary ability.