What is the International Entrepreneur Parole Program?
Explained: International Entrepreneur Parole (IEP) Program Qualifications
The Biden administration relaunched the Start-up Visa, appropriately called the International Entrepreneur Parole (IEP) program (IEP), which offers foreign entrepreneurs another appealing way to start a new business in the United States.
The IEP originated under the Obama Administration and stems from the interest in promoting greater use of the EB-2 National Interest Waiver (NIW).
The purpose of the IEP is to grant a period of authorized stay, on a case-by-case basis, to inventor researchers and founders of start-up enterprises who demonstrate that their start-up would provide a significant public benefit through rapid business growth but may not yet qualify for the National Interest Waivers.
The standard for getting the IEP is lower than the standard of the National Interest Waiver.
Here we take a closer look at the regulations under 8 CFR 212.19 to clarify the criteria for the IEP program.
What is “substantial ownership” to obtain lawful status to operate a start-up in the U.S. under the International Entrepreneur Parole program?
An entrepreneur has a substantial ownership interest in a start-up entity with an active and central role in the operations of that entity. Due to their knowledge, skills, or experience, the alien is well-positioned to substantially assist the entity with the growth and success of its business.
For purposes of this section, the substantial ownership interest is 10 percent in the start-up entity at the time of adjudication of the initial grant of parole. At the time of adjudication of subsequent re-parole, at least a five percent ownership interest in the start-up entity at the time of adjudication.
During the period of initial parole, the entrepreneur may continue to reduce their ownership interest in the start-up entity, but must, at all times during the period of initial parole, maintain at least a five percent ownership interest in the entity. The entrepreneur must maintain an ownership interest in the entity but may continue to reduce it during re-parole.
What is a “start-up” under the International Entrepreneur Parole program?
A start-up entity is a recently formed U.S. business entity that has lawfully done business during any period of operation since its date of formation and has substantial potential for rapid growth and job creation.
Under this section, a recently formed entity that is the basis for a request for parole must be created within the five years immediately preceding the filing date of the alien’s initial parole request.
For purposes of paragraphs (a)(3) and (5), it is an entity formed within the five years immediately preceding the receipt of the relevant grant(s,) award(s), or investment(s).
The potential for rapid growth and job creation is not easily defined; use evidence to show this.
One technique is to use an independent expert, someone who may know the beneficiary or company but doesn’t have a vested interest.
A business plan that complies with the Matter of Ho, financial projections and job creation projections, actual payroll records, articles, or press releases qualify as evidence for growth or potential growth.
A statement from the beneficiary or someone in the company detailing projected growth over a specific time could also be helpful but need to be supported by evidence.
What is a “qualified government award or grant” under the International Entrepreneur Parole program?
Qualified government award or grant is an award or grant for economic development, research, and development, or job creation (or other similar monetary awards typically given to start-up entities) made by a federal, state, or local government entity (not including foreign government entities) that regularly provides such awards or grants to start-up entities.
This definition excludes any contractual commitment for goods or services and precludes foreign grants and goods and services purchases. Scholarships or other awards to attend educational institutions don’t qualify under this criterion.
What is a “qualified investment” under the International Entrepreneur Parole Program or start-up visa?
Qualified investment means an investment made in good faith, and that is not an attempt to circumvent any limitations imposed on investments.
A purchase of lawfully derived capital in a start-up entity is from an entity of its equity, convertible debt, or another security convertible into its equity, typically within the same industry.
Cannot include an investment:
• directly or indirectly, from the entrepreneur;
• the parents, spouse, brother, sister, son, or daughter of such entrepreneur;
• or any corporation, limited liability company, partnership, or other entity in which such entrepreneur or the parents, spouse, brother, sister, son, or daughter of such entrepreneur directly or indirectly has any ownership interest.
Notice how “qualified investment” omits using money gifted from family members or their companies. Additionally, loans may only be viable if they can convert to equity.
Who is a qualified investor under the International Entrepreneur Parole program or start-up visa?
A Qualified Investor is an individual who is a U.S. citizen or lawful permanent resident of the U.S. or a U.S.-based organization operating under U.S. laws that is majority-owned and controlled, directly and indirectly, by U.S. citizens or legal permanent residents of the United States. Provided such individuals or organizations regularly make substantial investments in start-up entities that subsequently exhibit substantial revenue generation or job creation growth.
A “qualified investor” is an individual or organization legally able to participate in the offer or sale of a security or the provision of services as an investment adviser, broker, dealer, municipal securities dealer, government securities broker, government securities dealer, bank, transfer agent or credit rating agency.
Qualified investors cannot have illegally participated in the offer or sale of securities or provision of such services and be able to participate in such associations.
Under this section, such an individual or organization may be considered a qualified investor if, during the preceding five years:
(i) The individual or organization made investments in start-up entities in exchange for equity, convertible debt, or another security convertible into equity commonly used in financing transactions within their respective industries comprising a total within five years of no less than $600,000; and
(ii) after such investment, by those individuals or organizations, at least two entities each created at least five qualified jobs or generated at least $500,000 in revenue with revenue growth averaging at least 20 percent annually.
The challenge is obtaining this evidence from the investor to prove that they meet the criteria to help the recipient of their investment receive approval of this status.
How much funding is required to qualify for the International Entrepreneur Parole program?
Under 8 CFR 212.19(b)(2)(ii)(B)(1) of the International Entrepreneur Parole program, the applicant’s start-up has either:
(1) Received, within 18 months immediately preceding the filing of an application for initial parole, a qualified investment amount of at least $250,000 from one or more qualified investors; or
(2) Received, within 18 months immediately preceding the filing of an application for initial parole, an amount of at least $100,000 through one or more qualified government awards or grants.
However, according to alternative criteria, a foreign-national who partially meets one or both requirements may provide other reliable and compelling evidence of the start-up entity’s substantial potential for rapid growth and job creation.
How long can a person hold the International Entrepreneur Parole Program status?
Under 8 CFR 212.19(f): a foreign-national can’t receive more than one initial grant of entrepreneur parole or more than one additional grant of entrepreneur re-parole based on the same start-up entity for a maximum parole period of five years.
Duration of IEP parole is for two and a half years or 30-months increments.
What are the criteria for extending International Entrepreneur Parole status?
8 CFR 212.19(c)(2): Criteria for consideration –
(i) In general, an alien may be considered for re-parole under this section if the alien demonstrates that a grant of parole will continue to provide a significant public benefit to the United States based on their role as an entrepreneur of a start-up entity.
(ii) Typically, an alien may meet the standard described in paragraph (c)(2)(i) of this section by providing a detailed description, along with supporting evidence that:
(A) Demonstrates the alien continues to be an entrepreneur as defined in paragraph (a)(1) of this section and that their entity continues to be a start-up entity as defined in paragraph (a)(2) of this section; and
(B) Establishing that the alien’s entity has:
(1) Received at least $500,000 in qualifying investments, government grants or awards, or a combination of such funding, during the initial parole period;
(2) Created at least five qualified jobs with the start-up entity during the initial parole period; or
(3) Reached at least $500,000 in annual revenue in the United States and averaged 20 percent in annual revenue growth during the initial parole period.
• if the alien satisfies the requirements in paragraph (c)(2)(ii)(A); and
• partially meets one or more of the criteria in paragraph (c)(2)(ii)(B), then • they can provide other reliable and compelling evidence of the start-up entity’s substantial potential for rapid growth and job creation to meet (c)(2)(i) criteria.
Remember the rule of 5s: 5 jobs, raising $500,000 or generating $500,000 in revenue. If you can’t reach these thresholds, you must show other evidence of potential to get there.
What are the criteria and benefits spouses and children have under the International Entrepreneur Parole Program?
The entrepreneur’s spouse and children seeking parole as derivatives must individually file Form I-131, Application for Travel document. The application must also include evidence that the derivative has a qualifying relationship to the entrepreneur and otherwise merits a grant of parole in the exercise of discretion. The spouse or child will be required to appear for biometrics collection per the form instructions or upon request.
(2) The spouse and children of an entrepreneur granted parole under this section may be granted parole for no longer than the time given to such entrepreneur.
(3) After being paroled into the U.S., the spouse of the entrepreneur parolee may be eligible for employment authorization under this section. To request employment authorization, an eligible spouse paroled into the U.S. must file an Application for Employment Authorization (Form I-765).
(4) A child of the entrepreneur parolee may not be authorized for and may not accept employment based on parole under this section.
For more information on the International Entrepreneur Parole program and how you may qualify, schedule a strategy session with one of our licensed immigration attorneys.
For more information on the International Entrepreneur Parole program and how you may qualify, schedule a strategy session with one of our licensed immigration attorneys.
IEP Visa FAQs
Yes. The maximum initial parole period is two-and-a-half years. Upon re-entry at the U.S. port of entry, you may be granted parole for up to the remainder of the two-and-a-half-year initial parole period.
No. Awards or grants from foreign government entities are not considered qualified government awards or grants for the IEP program.
Yes, individuals who are currently in the United States in nonimmigrant status can apply for IEP. Individuals who are not presently maintaining nonimmigrant status may also apply for entrepreneur parole but would have to depart the United States in order to be paroled back in if authorized, and may have immigration consequences upon departure if they did not maintain their nonimmigrant status.
At any time during the period of parole, you may apply for classification as an immigrant or nonimmigrant, if you are eligible.
No, an I-941 applicant who currently holds a nonimmigrant status in the United States cannot concurrently be an entrepreneur parolee. If your I-941 application is approved and you are currently in the United States, you may choose to depart the United States and appear at a U.S. port of entry for a final parole determination.
The requirements for the IEP program are set forth in 8 CFR 212.19. DOS does not have different requirements for the program, because parole determinations are made by DHS (provisionally by USCIS and finally at the port of entry by CBP, both USCIS and CBP are components of DHS). If you are outside the United States and will need to apply to DOS for travel documentation, DOS rules pertaining to the process for obtaining travel documentation if USCIS approves your Form I-941 would apply.
The government award or grant may be initiated by either the parole applicant or the start-up entity. However, the grant must be awarded to the start-up entity in accordance with the regulations outlined at 8 CFR 212. 19.
The officers who will process your application are guided by the DHS regulations at 8 CFR section 212.19. We consider ownership interest “substantial” if you (the Form I-941 applicant) possess at least a 10% ownership interest in the start-up entity at the time of adjudication of the initial grant of parole, and if you possess at least a 5% ownership interest in the start-up entity at the time of adjudication of a subsequent period of re-parole.
If you are a Form I-941 applicant residing outside the United States and seeking initial parole under the IEP program, you must submit biometrics.
A pending or conditionally approved Form I-941 application does not authorize you, if you are present in the United States in nonimmigrant status, to remain in the United States beyond the expiration of your authorized period of stay.
You may be granted initial parole for up to two-and-a-half years. If approved for re-parole, you may receive up to another two-and-a-half years, for a maximum of five years.
Spouses who are paroled into the United States by CBP may immediately apply for work authorization by filing Form I-765. The spouse parolee, however, will not be authorized to work in the United States until the Form I-765 is approved and an employment authorization document is issued.
The regulation defines the term “qualified investor” to include an organization that is located in the United States and operates through a legal entity organized under the laws of the United States or any state that is majority-owned and controlled, directly and indirectly, by U.S. citizens or lawful permanent residents (LPRs). While USCIS does not require the applicant to establish that at least 50% of the capital contributed to the fund is sourced from U.S. citizens or LPRs, the applicant must nevertheless show that the fund is majority owned, directly and indirectly, by U.S. citizens or LPRs (which often corresponds with the amount of capital contributed).
Each dependent (your spouse or unmarried children under age 21) seeking parole must independently establish eligibility for parole based on a significant public benefit or an urgent humanitarian reason. Each individual must establish that they merit a favorable exercise of discretion to be granted parole. If you have been granted parole under the IEP, USCIS may consider granting parole to your spouse and children if we determine that maintaining your family unity provides a significant public benefit because it further encourages you to operate and grow your business in the United States, and to provide the benefits of such growth to the United States.
You can demonstrate substantial potential for rapid growth and job creation by the receipt of significant capital investment from U.S. investors with established records of successful investments in start-up entities. You can also demonstrate this through significant awards or grants from certain federal, state, or local government entities that regularly provide awards or grants to start-up entities. DHS regulations also include alternative criteria for applicants who partially meet the thresholds for capital investment or government awards or grants and can provide additional reliable and compelling evidence of their entities’ significant potential for rapid growth and job creation.
The alternative criteria is discussed in 8 CFR Section 212.19 (b)(2)(iii), Form I-941 instructions, and the preamble to the final rule.
Generally, the start-up entity must have received a qualified investment of at least $250,000 (adjusted for inflation – see note below) from one or more qualified investors within 18 months immediately preceding the filing of your Form I-941.
The definition of a qualified investor at 8 CFR section 212.19 requires the investor to have a history of substantial investment in successful start-up entities.
Generally, the start-up entity must have received at least $100,000 (adjusted for inflation – see note below) through one or more qualified government awards or grants within 18 months immediately preceding the filing of Form I-941. DHS regulations also include alternative criteria for applicants who partially meet the thresholds for capital investment or government awards or grants and can provide additional reliable and compelling evidence of their entities’ significant potential for rapid growth and job creation.
You must be well-positioned to substantially promote the growth and success of your start-up business to qualify as an entrepreneur under the IEP program. You must possess the required knowledge, skills, or experience.
- Form I-941;
- The Instructions for Form I-941;
- The International Entrepreneur Rule as published in the Federal Register at 82 FR5238; and
- The relevant regulation at 8 CFR section 212.19.
Your dependents may file Form I-131 at the same time you file Form I-941, regardless of whether they currently reside outside of the United States at the time of filing.