International Entrepreneurs Proposal Unlikely to Encourage Foreign Entrepreneurs to Choose the United States
Updated: 11/07/2016
On 08/26/2016, USCIS issued a proposed rule to permit entrepreneurs who meet certain financing and job creation requirements to work in the U.S. temporarily under USCIS’ authority to grant “significant public benefit parole.” USCIS received more than 700 comments.
Read about the original proposal
However, as many of those who commented recognized, including the American Immigration Lawyers Association and the American Immigration Council who jointly filed comments, the proposal is impractical:
- Most entrepreneurs will not be able to meet the requirements, and
- Those few who may qualify are unlikely to apply given the inherent uncertainty of parole and the lack of a path to permanent residence.
Major problems with the proposal:
- Initial parole is limited to 2 years, with possible re-parole for no more than 3 years, if certain investment and job creation thresholds are met. USCIS can revoke at any time without giving the entrepreneur the right to challenge the decision. USCIS also is requiring that the entrepreneur file a new application if there is a “material change” after approval, which appears to include changes that occur routinely when an entrepreneur is trying to develop a business, such as ownership and funding changes.
- No mechanism to transition from entrepreneur parole to any other status.
- Foreign students, who could benefit the U.S. if they had the opportunity to obtain financial backing for promising projects (such as those developed as a part of an MBA program) are highly unlikely to be able to engage in the activities necessary to qualify for parole while meeting the requirements for student status. Instead they will continue to be thwarted in their efforts to apply the education they received in the U.S. and will take their ideas and grow their businesses abroad.
- Minimum initial investment of $345,000 is roughly 2/3 greater than the average amount provided by the leading funder at the earliest stage of funding start-ups.
- Unreasonable restrictions on the source of the investment, such as including only counting funds invested in the one year period before the entrepreneur files the application and excluding funding from the entrepreneur or family members, when most new businesses are funded from personal savings or family.
- Requiring the entrepreneur to own 15 percent of the start-up initially and 10% thereafter ignores the reality that entrepreneurs frequently raise additional funds by offering a percentage of their interest in the business.
- Spouses of entrepreneurs who also receive parole will have to apply separately for employment authorization, which will delay by several months when they could begin working.
