The Biden administration has released new information aimed at strengthening existing immigration policies. … [+]
The Biden administration has released new information aimed at strengthening immigration policies for entrepreneurs, but officials acknowledge the policy would benefit from greater clarity and transparency. The International Entrepreneur Rule went into effect in the final days of the Obama administration, but the Trump administration “removed the IER before the program even began and tried to block its implementation, costing American jobs and innovation,” said the National Venture Capital Association, which successfully sued the Trump administration over the rule.
New Data Reveals Challenges Facing New Programs
The novelty of the International Entrepreneurs Rule is causing anxiety among potential applicants and perhaps adjudicators, according to new data obtained by the National Foundation for National Policy. Since fiscal year 2021, USCIS has received just 94 applications. The agency has approved 26 and denied 28. 19 have been withdrawn, and the remaining 21 are awaiting responses from applicants to the agency’s requests for evidence. There is no backlog.
Unlike categories such as the H-1B visa, which have a long history and a stable regulatory environment prior to the Trump administration, we cannot evaluate the denial rates of the new program to determine whether U.S. Citizenship and Immigration Services adjudicated cases appropriately. We would need to review denied cases to know whether they met the standards of the International Entrepreneurs Rule or whether individuals misunderstood the standards required to gain approval under the new program.
Under the rule, the Department of Homeland Security (USCIS is an agency within DHS) can grant parole on a case-by-case basis to foreign entrepreneurs who “can demonstrate that their presence in the United States will result in substantial public benefit through their business.” Entrepreneurs receive work authorization (to work in their own companies). Spouses can also work in the United States.
Updated information on the USCIS website explains: “Startups must demonstrate significant potential for rapid growth and job creation by showing qualified investments of at least $264,147 from accredited investors and at least $105,659 in qualified government awards or grants. or “Alternative evidence”
When filing the initial application, an individual must hold at least a 10% ownership interest, whether residing in the U.S. or abroad. USCIS lists accredited investors such as venture capital firms, but an “accredited investor” cannot be an individual or their immediate family member, or an entity in which an individual or their immediate family member has an ownership interest.
An entrepreneur’s experience
Jason Sasser, a partner at Siskind Sasser, got his client approved under the international entrepreneur rules, but the process took so long that his client returned to Canada, where she now runs her business. “She was a grad student and started a great company,” Sasser says. “It took so long to get approved, and Canada has a big tax credit for research and development for startups. [research and development] She told me that after waiting two years, she will probably not avail herself of parole under the international entrepreneur rules and will remain in Canada.”
Case history of Sasser’s clients:
- February 28, 2022: Our client’s Entrepreneur Parole application was filed with USCIS.
- November 10, 2022: I received a request for evidence from USCIS.
- December 2, 2023: Client received notification to undergo biometric verification.
- March 13, 2024: Client’s Entrepreneurial Parole is approved.
According to Susser, his client had raised over $1 million after earning his MBA from Stanford University. Nine months after submitting his application, he finally received a request for evidence from USCIS. “The first red flag was that the RFE came from the Office of Immigrant Investor Programs, the officials who handle EB-5 applications, but the program is notoriously slow to process,” Susser says. “The RFE then didn’t ask about my client, but was entirely focused on whether the US investor was an ‘accredited investor.’ Even there, the big stumbling block for the investor was not whether he invested, but whether his investments in other companies led to the necessary growth.”
“They were asking for documents from other portfolio companies of U.S. investors that were not related to this case,” Sasser said. “The investors that we were working with were very cooperative, but they could not go to the companies they invested in and ask for employee I-9s, taxes and other personal information to give to other companies for immigration cases.”
Although the case was ultimately approved, it took more than two years from the initial application to USCIS approval.
New USCIS Information Guidance and Instructions for Entrepreneurs and Lawyers
On July 12, 2024, USCIS published new information on its website providing more details about which startups and investments qualify and the evidence examiners will require. (See here and here.) This information is more extensive than previous explanations on the USCIS website.
The website now provides more detailed answers to questions such as:
What type of evidence can entrepreneurs provide to prove that an investor in a startup meets the definition of an “accredited investor”?
What happens if my startup does not meet the financial threshold for a “Qualifying Investment” or a “Qualifying Government Award or Grant”?
How can you prove that an investor has a track record of successful investments in other startups?
If I have evidence that I meet all of the above entrepreneur and startup qualification requirements, do I need to submit additional supporting evidence?
Sasser recommended that USCIS set reliable processing times and that investors not seek evidence from non-parties, such as companies that provided capital. He also supports providing guidance on evidence to be submitted in advance, and USCIS has provided this guidance in more detail in new information posted on its website.
Susser believes the expanded instructions from USCIS will be helpful if employees apply it. “I appreciate the procedural guidance they’ve put together here, and this kind of expanded guidance is a step in the right direction to getting more entrepreneurs on parole,” Susser said.
On March 10, 2023, USCIS updated its Policy Manual for Examiners.
Is it a viable path for international students?
According to a study by the Foundation for National Policy Studies, 55% of American startups valued at $1 billion or more have at least one immigrant founder, and about a quarter of American billion-dollar companies have an immigrant founder who came to the US as an international student.
Sasser and USCIS officials agree that if the international entrepreneur rule works well, it will allow international students with startup ideas to stay in the U.S., including those who don’t win H-1B status through the annual lottery. The extension allows entrepreneurs to stay in parole status for up to five years, after which they can use immigration categories to obtain permanent residence. Successful businesses could give individuals employment-based first preference (extraordinary ability) or second preference status, plus the possibility of self-application through a “national interest” exemption.
“The Biden Administration and USCIS have been working to ensure that every available pathway is available to the best and brightest minds from around the world,” a USCIS official said, “including entrepreneurs.”
