Foreign Startups Get Up to 5-Year Stay Under New US Visa Rule

In a landmark decision set to invigorate the American startup ecosystem, the United States has revamped the International Entrepreneur Rule (IER), administered by the Department of Homeland Security (DHS). The rule grants non-citizen entrepreneurs the approval to stay in the US for up to five years if they meet the investment and ownership criteria for their startups.

This strategic overhaul is poised to significantly impact foreign startups looking to scale up their businesses in the US. By extending the potential stay for foreign entrepreneurs to up to five years, contingent on their venture's public benefit, this move not only aims to attract global entrepreneurial talent but also promises to foster innovation, drive economic growth, and create jobs within the country. The updated guidelines make the US an even more appealing destination for ambitious startups seeking to expand and thrive in a dynamic and supportive environment.

Role of Non-Americans in America’s Startup Ecosystem

According to the"World of Statistics", 56% of the unicorn founders in the US were born in the nation but 44% were born outside the US. Interestingly, 90 of the unicorn founders in the US, hail from India, which is the highest number. With a contribution of 62, Israel is at the second place among non-US countries which have supplied unicorn founders. 52 founders from Canada, 31 from UK and 27 from China, form the number three, four and five of the list. Germany(18), France(17), Russia(14), Taiwan(12), Ukraine(12) are among the top ten countries to which the unicorn founders belong.

Enhanced Stay Period for Entrepreneurs

Under the updated guidelines, foreign entrepreneurs can initially secure a stay of up to two-and-a-half years, with the possibility of an extension based on specific criteria. Entrepreneurs must demonstrate significant public benefit through their business ventures to qualify for this extension. The potential for job creation, funding milestones, and rapid business growth are pivotal factors considered for extending the stay to a total of five years.

Parole for Entrepreneurs and Their Families

The IER allows noncitizen entrepreneurs to apply for an authorized stay in the United States, known as "parole." This enables them to work exclusively for their startups. According to the DHS, "Under the International Entrepreneur Rule (IER), the Department of Homeland Security (DHS) may use its authority to grant a period of authorized stay, on a case-by-case basis, to noncitizen entrepreneurs who show that their stay in the United States would provide a significant public benefit through their business venture and that they merit a favorable exercise of discretion."

Spouses of the entrepreneurs may also be granted parole and can apply for employment authorization, although this provision does not extend to their children.

Eligibility Criteria and Key Elements of IER

Start-up Requirements

To qualify, the start-up entities must meet the following conditions:

• Formation Date: The start-up must have been formed within the last five years.
• Growth Potential: The entity must demonstrate substantial potential for rapid growth and job creation. This can be shown through at least $264,147 in qualified investments from qualifying investors or $105,659 in qualified government awards or grants. Alternative credible evidence can also be submitted.

Entrepreneur’s Role and Ownership

Applicants must fulfill specific ownership and operational roles within their start-up:

• Ownership: Entrepreneurs must own at least 10% of the start-up at the time of the initial application.
• Active Role: They must play a central and active role in the day-to-day operations and decision-making processes.

Duration and Extension of Parole

Entrepreneurs may initially be granted parole for up to two-and-a-half years. If they meet additional benchmarks related to funding, job creation, or revenue growth, they can apply for re-parole, extending their stay by another two-and-a-half years, making the total possible duration five years. As stated by the DHS, "Entrepreneurs granted parole will be eligible to work only for their start-up business."

Family Members’ Eligibility

While the entrepreneur’s spouse may apply for employment authorization after being paroled into the US, children are not eligible for employment authorization under this rule. However, unmarried children under 21 years old can apply for parole.

Application Process and Status Adjustments

Entrepreneurs can apply for parole from abroad or while already in the United States. However, if approved for IER parole, those currently in nonimmigrant status may need to depart the US to re-enter under parole conditions. Parole does not allow for an adjustment of status within the US, and those overstaying their nonimmigrant status may face immigration consequences.

Additional Options

The IER provides a pathway for noncitizen entrepreneurs to work in the United States. Up to three entrepreneurs per start-up can be eligible for parole under this rule, creating a supportive environment for collaborative ventures and innovative growth.

By refining the International Entrepreneur Rule, the US aims to attract and retain global entrepreneurial talent, driving innovation, economic expansion, and job creation within its borders.

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