President Obama’s 2014 administrative actions included directives for changes aimed at providing needed avenues for entrepreneurs and investors within existing immigration categories. One important and promising action item intended to open US immigration opportunities for entrepreneurs and investors was finalized in late December 2016. This item is the clarification of the National Interest Waiver (NIW) standard for startup founders and the elimination of often insurmountable requirements for qualification for this valuable option.

The NIW category provides an avenue for self-sponsorship of permanent resident (“green card”) status. Since 1998, eligibility for this selective, discretionary category has been based upon criteria set forth in Matter of New York State Department of Transportation, 22 I&N Dec. 215 (Acting Assoc. Comm’r 1998). This case, known as NYSDOT, was vacated by the Administrative Appeals Office (AAO) on December 27, 2016. The new NIW interpretive framework is set out in an AAO precedent decision, Matter of Dhanasar, 26 I&N Dec. 884 (AAO 2016). The revised Dhanasar standard, explained below, is likely to benefit entrepreneurs, investors, and other NIW applicants.

Background: NIW Eliminates Job Offer and Labor Market Test

The NIW provides an exception in the permanent residence (“green card”) process, which eliminates both the need for employer sponsorship, as well as a stringent test of the labor market, known as a labor certification. The NIW requires applicants to demonstrate that it is in the national interest to waive the standard US labor market protections embodied in the labor certification process. The NIW is limited to applicants who are members of professions holding an advanced degree or individuals of exceptional ability in science, art, or business, as defined in immigration law.

NYSDOT established a framework for adjudicating NIW petitions, which was difficult to meet and particularly inhospitable to entrepreneurs, investors, new inventors and start-up founders. Under NYSDOT, the foreign national had to establish that the area of employment was of “substantial intrinsic merit,” that the benefit from the work would be “national in scope,” and that the national interest would be “adversely affected,” if a job offer and labor market test were required.

New Standard: More Flexible with Real-World Considerations

The new standard articulated In Matter of Dhanasar continues a three-pronged analysis, as follows:

1) The foreign national’s proposed endeavor has both substantial merit and national importance;

2) The foreign national is well positioned to advance the proposed endeavor, and

3) On balance, it would be beneficial to the US to waive the requirements of a job offer and labor market test.

Substantial Merit: Economic Impact Not Required

The first prong has two elements – substantial merit and national importance. The AAO specified that, for this prong, the focus is to be on the specific endeavor in which the foreign national plans to engage. Such endeavors may be in a wide range of areas, including business, entrepreneurialism, science, technology, culture, health, or education. Establishing the first element within this prong, substantial merit, does not require a showing of a likely significant economic impact. While such evidence is a positive factor, it is not a requirement. The AAO acknowledged that pure science and furtherance of human knowledge are valuable and have substantial merit in themselves.

National Importance: Not Always National in Scope

The second element of the first prong, national importance, is determined by the potential prospective impact of the endeavor. The AAO explained that this element is not evaluated purely by geography. While undertakings, such as medical advances, have national or global impact, this is no longer required. The AAO will look at the “broader implications” and states that even ventures which focus on one geographic area in the US can have national importance.

The AAO found NYSDOT’s focus on “national in scope” unduly emphasized geographic expansiveness. The Dhanasar decision gives a clear nod to investors and entrepreneurs in stating that, “an endeavor that has significant potential to employ US workers or has other substantial positive economic effects, particularly in an economically depressed area….may well be understood to have national importance.”

Positioning to Advance the Proposed Endeavor

The second prong focuses on the NIW applicant and looks to the foreign national’s education, skills, knowledge, and record of success. This element can be established via plans for future activities, progress toward the endeavor, the interest of potential customers, investors or other relevant entities. The allowance for the use of this type of evidence is again favorable for investors, entrepreneurs, and inventors.

Beneficial to Waive Job Offer: More Flexible Standard

Historically, the third prong has been the most difficult aspect of a NIW petition. It is no longer necessary to show that the national interest would be harmed in the absence of a waiver; no comparison of the applicant to others in the field is required. Rather, the question to be asked is “whether, even assuming that other qualified US workers are available, the United States would still benefit from the foreign national’s contributions; and whether the national interest in the foreign national’s contributions is significantly urgent to warrant forgoing the labor certification process.”

The AAO emphasized that the USCIS can consider whether the nature of the endeavor makes it impractical to present a job offer or obtain a labor certification. The decision cites foreign nationals with unique knowledge or skills not easily set out in a labor market test, as well as entrepreneurs and the self-employed, as potentially appropriate for an NIW. The factors are to be considered together, and a decision is to be based upon whether, on balance, it would be beneficial to waive the job offer and labor market test requirements.

NIW Opportunities: Entrepreneurs, Investors, Inventors, Researchers, Artists, Business Experts

The Dhanasar standard is a significant departure from NYSDOT standard which, if implemented consistent with its wording and spirit, would open opportunities for valuable contributors, including entrepreneurs, investors, inventors, researchers, artists, and those in business fields which do not fit well within the standard labor certification-based “green card” process. We will be closely tracking further developments and guidance following Dhanasar, as well as related proposed regulatory changes for entrepreneurs which, as of this writing, are under review by the Office of Management and Budget.