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International Entrepreneur Rule

USCIS Brings in the Delayed International Entrepreneur Rule

By Peek & Toland on December 22, 2017

International Entrepreneur RuleA rule intended to make it easier for foreign entrepreneurs to stay in the United States while they set up businesses is being implemented following a court decision. On December 14, U.S. Citizenship and Immigration Services (USCIS) announced it will be introducing the International Entrepreneur Rule.

The International Entrepreneur Rule was created under the former Obama administration. However, the Trump administration sought to stall its implementation. A bid to delay the rule until March has been overturned by the courts.

The IER gives an unlimited number of international entrepreneurs a new avenue to apply for parole, enter the United States and use American investments to create and grow start-up businesses, states USCIS.

Parole is a discretionary grant made available by the Secretary of Homeland Security. It is awarded on a case-by-case basis for urgent humanitarian reasons or significant public benefit.

The rule was meant to come into effect on July 17, 2017. It was delayed because the Department of Homeland Security issued a final rule on July 11, 2017 putting back the IER’s effective date until March 14, 2018.

A lawsuit was filed by the National Venture Capital Association, a trade association, which challenged the delay in implementing the IER. The association argued the Trump administration bypassed proper procedures when it delayed the IER’s implementation.

On December 1, 2017, the U.S. District Court for the District of Columbia ruled against the federal government in National Venture Capital Association v. Duke.

The rule establishes new criteria to guide the how parole applications from certain foreign entrepreneurs are dealt with. It provides them with temporary permission to come to the country.

However, the rule does not provide a path to citizenship, which only Congress can do.

What Does the Delayed International Entrepreneur Rule Do?

The IER is expected to help about 3,000 foreign investors a year to set up businesses in the United States, although no upper ceiling has been set.

The new rule smooths the path for start-up entrepreneurs to obtain temporary permission to enter the United States for 30 months or 2.5 years under parole.

The entrepreneur must be in the United States to start up a business. He or she may be granted an additional 30 months in the country to oversee the expansion of the enterprise.

The new rule was created to encourage entrepreneurs from abroad to set up successful start-ups in the United States via increased capital spending and the creation of jobs.

Eligible entrepreneurs should show their enterprise demonstrates a significant public benefit. Factors that can qualify an investor for “parole” include:

  1. Substantial capital investment
  2. A consistent record of capital investment;
  3. Grants from state, federal or local agencies.

The finalized IER allows up to three entrepreneurs to seek parole per business start-up entity. Their spouses and children can also qualify. However, entrepreneurs who qualify for parole are only eligible to work for the specific start-up business in the United States. They cannot seek another job in the country. Their spouses will only be eligible to apply for employment authorization once they arrive in the United States.

At Peek & Toland we advise investors and entrepreneurs who are seeking to invest in Texas how to take advantage of the International Entrepreneur Rule. Call us at (512) 474-4445.

 

 

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White House is Urged to Keep the International Entrepreneur Rule

By Peek & Toland on October 7, 2017

Concerns over the future of the International Entrepreneur Rule that allows business leaders from other countries to come to the United States more easily, have led American business leaders to put pressure on the White House.

An article in The Hill in June noted investors, entrepreneurs, and civic leaders are pushing the Trump administration to not block the rule that would smooth the way for entrepreneurs from other countries to come to the U.S.

We outlined the finalized rule earlier this year. Investors who can pump at least $250,000 into the U.S. economy can benefit under the International Entrepreneur Rule.

The measure was originally proposed by the Obama administration. It allows the Department of Homeland Security (DHS) to evaluate whether or not business owners can relocate to the U.S. to grow their companies, on a case-by-case basis.

business community fights for the International Entrepreneur Rule

Almost 80 groups representing investors, startup founders, economic development organizations and civic leaders sent a letter in May to the White House. They urged the administration to not roll back the International Entrepreneur Rule due to go into effect on July 17. In the letter they argued:

“Immigrant entrepreneurs are a critical driver of increased economic activity, as they play an outsized role in new company creation in communities all across our country.”

Over the summer, administration officials held a meeting with the National Venture Capital Association (NVCA), a Washington DC trade association that represents venture capital and entrepreneurial interests.

The Trump administration has not taken a stance on the International Entrepreneur Rule.

The groups believe the U.S. is missing out on potential investment from overseas. They say while the rule is not a substitute for legislation, it may be an important step to bringing entrepreneurial talent to the U.S., which has been declining in recent years.

At Peek & Toland , our experienced business immigration attorneys can help you hire people from overseas or if you are using complex federal investment programs. Call us for a consultation at (512) 474-4445.

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Final International Entrepreneur Rule is Announced by USCIS

By Peek & Toland on June 8, 2017

The International Entrepreneur Rule is expected to help almost 3,000 foreign investors a year to set up businesses in the United States. It has now been finalized and published in the federal register.

Under this final rule, the Department of Homeland Security (DHS) can use its “parole” authority to allow a period of authorized stay to foreign entrepreneurs who demonstrate that their time in the United States would provide a significant benefit to the public. The evaluations will make made on a case-by-case basis.

Investors must demonstrate the potential for rapid business growth and job creation of their business. The new rule becomes effective on July 17, 2017, a period 180 days after its publication in the Federal Register.

DHS estimates that about 2,940 entrepreneurs from abroad will be eligible under the International Entrepreneur Rule every year, states U.S. Citizenship and Immigration Services (USCIS). Eligible entrepreneurs may be granted a stay of up to 30 months, with the possibility to extend the period by up to 30 additional months if they meet certain criteria, in the discretion of DHS.

Overseas businesses benefit from the International Entrepreneur Rule

Foreign investors can benefit from the International Entrepreneur Rule

The Purpose of the International Entrepreneur Rule

The new rule makes it easier for start-up entrepreneurs to obtain temporary permission to enter the country for 30 months or 2.5 years under a process called “parole.”

They must be in the United States to start up a business enterprise. The entrepreneur may be granted an additional 30 months in the country to oversee the expansion of the business.

The new rule is intended to encourage investors and entrepreneurs from overseas to set up successful start-ups in the United States via increased capital spending and the creation of jobs.

Eligible entrepreneurs should demonstrate a significant public benefit in their enterprise. Factors that can qualify an investor for “parole” include:

1 Significant capital investment

2 An established record of capital investment;

3 Attainment of grants from certain state, federal or local agencies.

Family Members Can Benefit from the International Entrepreneur Rule

The finalized rule allows up to three entrepreneurs to seek “parole” per-start up entity. Their spouses and children also qualify. However, entrepreneurs who qualify for “parole” are only eligible to work for their start-up business entity in the United States and cannot seek another job in the country. Their spouses will only be eligible to apply for employment authorization once they are in the United States.

Unlike the EB-5 investor program, the entrepreneur rule does not allow investors to become permanent residents.

Significant Capital Investment Under the Entrepreneur Rule

There are a number of ways entrepreneurs can meet the capital investment requirement.

  1. Investments from established U.S. investors: The applicant can show his or her business entity received significant investment of capital from qualified investors in the United States. They must have well-established records of successful investments. An applicant will usually be able to meet this criteria by demonstrating the new business received capital investments of $250,000 or more from established investors in the United States. These entities should have a track record in investing in successful start-up ventures.

 

  1. Government grants: The receipt of significant grants or awards from government entities with expertise in research, economic development, or job creation can satisfy the criteria. An applicant should demonstrate grants or awards of at least $100,000 from these sources.

 

  1. Alternative criteria: The final rule also has alternative criteria. An applicant who partially meets the first two criteria may be considered for parole. The entrepreneur must show the start-up would provide a significant public benefit to the United States of America. It’s a wider criteria but job creation or rapid growth is key.

The final rule relaxes some of the requirement of the original one published last year. A foreign entrepreneur must have an ownership interest of at least 10 percent for initial parole, and at least 5 percent to be eligible for a second period of re-parole. The initial requirement was 15 percent.

The investment threshold of $250,000 is a reduction on the original proposal of $345,000.

There are many complexities to the new entrepreneur rule. For advice and guidance call our Texas business

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The International Entrepreneur Rule is Finalized

By Peek & Toland on April 18, 2017

The International Entrepreneur Rule was one of the last immigration reforms to come out of the Department of Homeland Security under the Obama administration.

In January, the department released its final international entrepreneur rule. It was published in the Federal Register on Jan. 17.

The Department of Homeland Security says the amended rule will encourage foreign entrepreneurs to set up business entities in the United States with “high growth potential.”

The rule will go into effect 180 days after publication. Within that time it could still be derailed by Congress or President Donald Trump.

The International Entrepreneur Rule is Finalized

Following the publication of the rule in August, the public and other responders were given 45 days to comment. Although Trump has taken a hard line on immigration, an article in Small Business Trends speculated that the new president may want to retain it.

The final rule contains some changes to the one we discussed earlier in a blog. The amendments are intended to make it easier for foreign investors to take advantage of the rule.

Changes in the Finalized International Entrepreneur Rule

  1. The minimum investment required from a qualifying investor is now $250,000. The original rule floated an amount of $345,000.
  2. The final rule contains relaxations on the requirements to be a “qualified Investor” under the rule.
  3. Under the final rule, a foreign entrepreneur must have an ownership interest of at least 10 percent for initial parole, and at least 5 percent to be eligible for a second period of re-parole. The proposed rule had set the minimums at 15 percent for initial parole and 10 percent for re-parole.
  4. The final rule relaxes the job and revenue creation requirements from initial indications in the proposed rule. The applicant must show the enterprise creates at least five full-time jobs in the first period of parole.

The final rule will make it easier for foreign entrepreneurs. However, there are still a considerable number of hurdles to be negotiated.

In contrast to the EB-5 Investor program which we detail here, those taking advantage of the International Entrepreneur Rule do not gain eligibility for a green card by taking part.

An experienced Austin immigration lawyer can help you to take advantage of this new program. Please call us at (512) 474-4445.

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