On August 24, 2016, the Department of Homeland Security (DHS) previewed a proposed rule that would provide certain entrepreneurs temporary permission to enter the United States through the DHS’s “parole” authority. . Recognizing the importance of start-up businesses to the American economy and the immigration difficulties that many non-U.S. founders have faced, DHS announced the likely publication of such a rule in a series of memoranda published in November 2014, previewing changes to U.S. immigration rules. The proposed rule is not a new visa, as establishing a new visa category would require action by Congress. Instead, it is an extension of the DHS’s authority to “parole” selected groups of people into the United States. 

The rule will soon be published in the Federal Register, allowing for public comment for 45 days thereafter. The rule will not go into effect until after the comment period and final publication of the rule.

The proposed rule provides guidance for case-by-case adjudication of applications to consider complex, specific details of the start-up business and represents the agency’s policy and intention to increase use of its “parole” authority. Entrepreneurs demonstrating that their start-up entity will “provide a significant public benefit” through job creation and “rapid business growth” may be granted an initial stay in the U.S. for a two-year period, which could be extended for an additional 3 years after demonstrating continued public benefit by showing “substantial increases” in investment, revenue or job creation during the initial period.

DHS will consider parole applications for startup entrepreneurs who can demonstrate that:

  • The business entity was formed in the United States within the three years prior to the application date
  • The applicant has a significant ownership interest (15% interest minimum) in the business entity and has an “active and central role in the operations and future growth” of the entity (not a “mere investor”)
  • Evidence of “significant U.S. capital investment or government funding” is provided, which includes:
    • receipt of at least $345,000 investments of capital from U.S. investors with a history of substantial start-up investments, or
    • receipt of at least $100,000 in Federal, state or local government grants, or
    • partially meeting one of the above criteria plus strong evidence of the entity’s “substantial potential for rapid growth and job creation.”

The proposed rule, if adopted in this form, is estimated to benefit several thousand foreign entrepreneurs every year. The rule does nevertheless include limitations that could present challenges to entrepreneurs from specific countries. Specifically, because of country quotas and resulting delays in green card issuance, entrepreneurs from oversubscribed countries such as India and China seeking permanent residency based on their role as start-up founders may find that the 5-year parole period is an insufficient time period to await eligibility to apply for adjustment of status (the final green card application).