Newly Proposed Parole for Entrepreneur Visas – Episode 22
Just recently, the U.S. Citizenship and Immigration Services (USCIS) proposed a new rule that gives another chance for entrepreneurs all over the world the opportunity to gain entry in the United States. This brought about a lot of confusion in the EB5 industry, which is why Mona Shah and Mark Deal sit down with Rebecca Singh and Omar Hakim to talk about what’s entailed, and its similarities and differences with EB5.
The newly proposed parole for Entrepreneur Visas has been getting a lot of buzz the past few days. This was actually part of Obama’s executive order that was proposed in 2012, but has been overshadowed by other rules. The USCIS has breathed new life into it and has been the subject of talk ever since.
There has been much discussion about how it affects the EB5 industry, but this proposed rule has its strict qualifying factors, which makes it different from EB5. Although it has been said to be tailored towards Silicon Valley and Tech firms, the aim is to benefit both eligible, foreign entrepreneurs as well as the U.S. economy by creating new jobs, generating income and attracting more investors.
Requirements to qualify for Parole:
- Parole allows limited entry in the United States. This means limited entry according to certain facts and circumstances. The idea behind this can be explained as seeing EB5 as revolving more of starting a family business, using the family money for the startup with the aim of getting a green card.
- Meanwhile, the proposed rule is designed to move towards the likes of Silicon Valley and Tech firms. Parole focuses on getting a US partner or domestic venture capital to invest in the company. Here are the following outside validating factors:
1. Receiving an investment capital of at least $345,000 from a qualified U.S. investor or venture capital. In addition to that, the investor or the company should also be a new startup that has started within the last 3 years, with at least 3 successful investments totaling to at least $1 million in the last 5 years.
2. Receiving at least $100,000 grant from a government agency
3. If 1 or 2 are not possible, the entrepreneur must present a compelling reason or evidence of the startups potential for job creation and revenue.
- Much of the confusion between the new proposed rule and EB5 is because EB5 also has an Entrepreneur Visa. A strict requirement by the USCIS under the proposed rule is that the Entrepreneur has to own at least 15% of the company. There is no specific designation as to the amount or domestic funding that will be brought in. However, another additional requirement is for the Entrepreneur to have a separate income that is 400% above the poverty line, which is a good contribution to the U.S. economy.
- In relation to this, the reason why a lot of E2 petitions fail is because the investment that companies are willing to put forth is marginal. When a company cannot afford the EB5 requirement and opts for E2 petitions instead, the amount collated is not a credible amount that is considered for a business and has very limited buying power.
- The Entrepreneur under the proposed rule also has to have an active and central role in the company. Simply put, EB5 focuses on the funds going in, while the new rule is looking for the actual talent to manage the funds.
- Proposals are kept open for 45 days for comments. The realization of this rule can reach up to a year. Parole is meant for people who are not able to avail of E2 or EB5. It can also be applicable to countries with no treaty trade visas like Vietnam, China and India, to name a few.
How to get the most of it:
- With the issue of retrogression coming into play and with interest rates going up, foreign entrepreneurs would want to look for a stable country to invest in. Statistics show that over 50% of companies worth a billion or more were started by immigrants. The idea of Parole is a brilliant startup accelerator.
- Parole can work hand in hand with EB5 to get a company started, especially for those companies outside the U.S. This can also be applicable to foreign students who are already in the U.S. who are planning to open a startup company after graduation but do not want to apply via the H1B lottery system.
- Parole only allows an entrepreneur to stay for 2 years. The conditions that allows an extension has not been finalized, but companies should be able to have ample time to get the company started with the allowable period.
- The concept of Parole opens the doors to outside ideas. It is a great way to attract talent to the U.S.