A new immigration law was published recently that opens the door for another visa option for Entrepreneurs. Where in the past, foreign entrepreneurs could rely mainly on an EB-5 visa or an E-2 visa, this new option opens the door to entrepreneurs. The program targets individuals who have started a business in the United States, have received funding, and who can demonstrate that the business will grow and create U.S. jobs. The new law takes effect on July 17, 2017. One technical distinction between this program and a regular visa and status is that the program gives the qualifying entrepreneurs something called “parole” rather than a visa or status. While the word parole does not conjure up the most positive image, this program gives the applicant discretionary permission to enter and remain in the United States so is very much like the status you would obtain with a visa.
What are the Requirements of the New Entrepreneur Program?
To qualify for this program, a foreign investor or entrepreneur must meet the following criteria:
- A business/company must exist in the U.S. and the business must have been started within 5 years of the application date;
- The person applying must own at least 10% of the company;
- The person applying cannot be a passive investor and must play an active role in the company; and
- The company must have received certain investment funding targets
- at least $250,000 invested from qualified U.S. investors; or
- at least $100,000 in grants or awards from qualifying U.S. federal, state or local government entities.
- Foreign nationals who do not, or only in part, meet the above criteria would need to provide additional compelling evidence of the start-up’s substantial potential for rapid growth and job creation.
There is also a rule that a maximum of three entrepreneurs may be granted this status per entity.
How Long can the Applicant Stay in the U.S.?
Applicants are initially granted this status for up to 30 months and can only work for the company that they have invested in. Dependents can join the applicant and can also apply for work authorization.
The applicant can get more time after the 30 months if he/she can demonstrate the following:
- The business continues to operate with the investor playing active role;
- The applicant has at least a 5% ownership interest in the company (the rule recognizes that often the shares an owner may hold will decrease as the company gets more funding); and
- The company has:
- Created at least 5 “qualifying jobs”
- A qualifying job is full-time employment in the United States where the position has been filled for at least 1 year by one or more by a qualifying employee which includes “a U.S. citizen, a green card holder, or other immigrant lawfully authorized to be employed in the United States, who is not an entrepreneur of the relevant startup entity or the parent, spouse, brother, sister, son, or daughter of such an entrepreneur;”
- Received at least $500,000 in qualifying investments, government grants or awards, or a combination thereof; or
- Generated at least $500,000 of U.S. revenue and averaged 20 percent in annual growth during the initial parole period.
- Like with the initial application, other evidence can be provided if the investment and/or revenue forecasts have not been met.
- Created at least 5 “qualifying jobs”
The new rule creates a significant opportunity for technology and other companies who have founders that may not be eligible for other visas. We expect that the new rules will benefit a large number of talented foreign entrepreneurs who have great ideas and who want to grow a company in the U.S.. Given the benefit to the U.S. economy, we are hopeful that the new administration will not delay or suspend the implementation of this new rule but time will tell. The rule will go in to effect on July 17, 2017.
To find out more about the new rules or other investor visas, contact Scott Legal, P.C.
Ian E. Scott, Esq. is the Founder of Scott Legal, P.C. He can be reached at 212-223-2964 or by email at email@example.com.
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