The United States Citizenship and Immigration Services (USCIS) proposed a rule for the U.S. Government to provide parole (temporary permission to be in the country) to foreign entrepreneurs who are establishing their businesses and offering “significant public benefit” in America. The proposal specifies that a founder can qualify if he or she started a company in the U.S. in the last three years and meet founder, investor, and company criteria.
In order to qualify, a startup must be:
- Receiving significant investment of capital (at least $345,000) from particular qualified U.S. investors with exceptional track records of success in investments.
- Receiving significant awards or grants (at least $100,000) from specific federal, state, or local government entities.
- Partially satisfying one or both of the requirements above, in addition to other reliable and compelling evidence of the startup entity’s significant potential for expedient growth and employment creation.
The proposed Significant Public Benefit Parole for Entrepreneurs rule would allow qualified individuals to obtain parole for two years with the possibility of an added three-year extension. Five years is still considerably brief in regards to exit timelines for most business ventures. On average, an IPO-track startup takes seven years to exit, and many take 10 or even 12 years.
The extension regulations also place pressure on founders to accomplish success by the check-in and presents additional risk to investors that a company could be destroyed from the outside. While the newly proposed rules will help some, it will not help all foreign entrepreneurs.
The proposed rule reached the Office of Management and Budget for review on August 1, 2016. The office assists the president in fulfilling his vision throughout the executive branch. For this particular rule, the office will “coordinate and review all significant Federal regulations by executive agencies, to reflect Presidential priorities and to ensure that economic and other impacts are assessed as part of regulatory decision-making.”
For more information about the newly proposed rules, contact Sintsirmas & Mueller today.