International Entrepreneur Rule: An Initial Review and Analysis

International Entrepreneur Rule:

Parole of Foreign Start-up Entrepreneurs into the United States

Yongbing Zhang Esq.

On August 31, 2016, USCIS announced the Notice of Proposed Rulemaking (NPRM) in the Federal Register: International Entrepreneur Rule, seeking opinions and comments from the public to finalize the regulation. This is an effort by the United States executive branch in its rulemaking process to attract international entrepreneurs.

Background

The current U.S. immigration and Nationality Act was enacted more than twenty years ago in 1996. The technology industries in the U.S. have experienced explosive advancement since then. A large number of IT based start-ups came into being and have grown into multibillion dollar giants, such as Google, Facebook, and Amazon. The increasing demand of foreign high tech talents from the technology industries has posed a challenge to the 1996 version of U.S. immigration law. Although Congress has passed some amendments to the Act, such amendments could not keep up with the growing demand from the U.S. tech industry for international talent. The law is way behind the need of the industries.

The following are some examples of the effect this gap between the law and the demand for foreign workers has had: 1) High tech companies cannot hire as many foreign skilled workers as they want because of the annual cap to H1b working visas. Some of the graduate students with science or technology degrees from U.S. universities have no choices but to leave the U.S. for their home countries or elsewhere after failing to secure work visas. 2) The employment-based immigrant visa annual quota has not increased, which has caused long waiting times for certain foreign skilled workers to obtain green cards. For instance, according to the U.S. State Department’s September 2016 visa bulletin, for Employment based 2nd preference, the cut off day for China-born applicants is January 1, 2010. For India-born applicants under the same preference, the cut-off date is in the February 2005. Every month, there is an update to the bulletin. Sometimes the cut-off date can move forward significantly, and sometimes, they can retrogress substantially. The overall trend is that applicants are experiencing a longer waiting time. 3) More and more foreign nationals that have intention to start up high tech businesses have to abandon their plans due to the current U.S. visa system.

In an attempt to solve the third problem, former U.S. Democratic Senator John Kerry proposed a bill in the U.S. Senate in 2011, the 2011 Entrepreneur Start Up Act. The bill suggested to add an Employment based 6th preference for start-up entrepreneurs after Employment Based 5th preference. It failed to obtain the sufficient support in the Senate and eventually fell into silence.

In November 2014, President Obama announced that the administration would initiate certain reforms to the U.S. immigration system within the authority granted by the Constitution to the executive branch. One of such reforms was to seek more effective solutions to attract and make it easy for foreign entrepreneurs to start up businesses in the U.S. The NPRM released on August 31, 2016, is the measure to solve this problem.

This article will first examine the proposed rulemaking to determine the exact requirements for parole of entrepreneurs. It will then follow with a discussion on the proposed rule.

Initial Parole Requirements

According to NPRM, at the time of applying for initial parole, the entrepreneur must establish that parole will provide a significant public benefit to the U.S. based on his or her role as an entrepreneur of a start-up entity. To meet the criteria, the application must satisfy three requirements. First, the applicant must meet the definition of an entrepreneur by possessing ownership interest of at least 15 percent in a start-up entity, and by having a central and active role in the operations. Secondly, the start-up entity must be a U.S. business entity recently formed and have substantial potential for rapid growth and job creation. The entity will meet the recently formed criteria if, at the time of filing application, the entity is within three years of its formation. The entity that has received qualified government grants or award or investment within three years after the formation may also be considered recently formed for this purpose. Thirdly, within one year prior to the filing, the start-up entity must receive qualified government grants and award or investment from qualified investors. For qualified government awards or grants, the amount cannot be less than $100,000; for investment funds from a qualified investor, the amount must be no less than $345,000.

The proposed rule provides very restricted definitions to qualified government award or grant and qualified investors. A qualified government award or grant is an award or grant for economic development, research and development, or job creation made by a federal, state, or local government entity that regularly provides such awards or grants to start-up entities. The definition of a qualified investor is even stricter. First, the investor must be a U.S. citizen (USC) or lawful permanent resident (LPR) or an organization located in the U.S. that is majority owned and controlled by USCs and LPRs. Secondly, such individual or organization regularly makes substantial investments in start-up entities that subsequently exhibit substantial growth in revenue and job creation. Such individual or organization must have a good record as an investor. Lastly, the proposed rule provides a quantitate criteria to qualified investors. As to the investment amount, the investor must show that in the five years preceding the application, the investor has made investment in start-up entities in exchange for either equity or convertible debt in 3 separate years of no less than $1,000,000. As to the entities receiving the investment, at least 2 such entities each created at least 5 qualified jobs or generated at least $500,000 in revenue with average annualized revenue growth of at least 20 percent.

If the application can meet the first two requirements, and meet a portion of the third requirement but not all of it, the applicant must provide other reliable and compelling evidence of the entity’s substantial potential for rapid growth and job creation.

After the approval of initial parole, the entrepreneur can stay in the U.S. for two years. The spouse and unmarried children may join the entrepreneur. The spouse may apply for employment authorization and seek unrestricted employment in the U.S. upon the approval of the employment authorization application. During the parole, USCIS will issue multiple entries advance parole documents to the spouse and children so that they can make international travels.

Re-Parole

Before the expiration of the two-year initial parole, the entrepreneur may apply for re-parole. If granted, the entrepreneur may extend the parole for another three years. The criterion for re-parole is the same as initial parole. In order meet this criteria, the entrepreneur has to satisfy three requirements. The first two requirements are similar to the first two requirements for initial parole application. The only difference is that in the re-parole application, 10 percent ownership interest will be sufficient to meet the ownership requirement.

The third requirement is the key for USCIS to consider, and is also quite challenge for most applications. The rule provides three objective tests for start-up entities to show its substantial potential in revenue growth and job creation. Satisfying either one of the three objective tests will meet the third requirement. They are: 1) the entity has received at least $500,000 in qualifying investments, qualified government grants or awards, or a combination of such funding; 2) the entity has created at least 10 qualified jobs; or 3) the entity reached at least $500,000 in annual revenue and averaged 20 percent in annual revenue growth. All of these must occur during the two-year parole period.

If the entity cannot meet either one of the three objective tests, the applicant will have to present other reliable and compelling evidence of the start-up entity’s substantial potential for rapid growth and job creation.

Once the re-parole application is approved, the entrepreneur and the qualified family members can continue to live in the U.S. for an additional three years.

Comments

Followings are some general comments about the proposed rules.

First, the NPRM is just a proposed rule for the purpose of seeking comments and opinions. It has not become effective yet. The period for seeking comments from the public will run 45 days up till October 17, 2016. Normally, there will be additional time needed before the proposed rules can become final rules. Then it will be announced to the public and will become effective thirty days from the announcement. To estimate, the earliest possible time for the NPRM to become effective will be around the end of 2016.

Secondly, USCIS authority in parole comes from the section 212(d)(5) of the Immigration and Nationality Act. 212(d)(5)(A) provides that the Attorney General in his discretion may parole into the U.S. certain aliens on case-by-case basis for urgent humanitarian reasons or significant public benefit. The statute explicitly states that such parole “shall not be regarded as an admission.” Thus, the paroled entrepreneur will not be able to change or adjust status within the U.S. when applying for a nonimmigrant visa or green card, and will have to travel outside to the U.S. embassy or consulate overseas for a visa interview and come back to the U.S. with the approved visa.

Thirdly, the NPRM has put forward a financial obligation to the paroled entrepreneur under the regulation. As a condition to maintain the parole status, the household income of the entrepreneur’s family must be at such a high level that the annual income is not less than 400% of federal poverty line. Under the 2016 federal poverty line, the income for a family of two is $19,360, and four times the poverty guideline is $63,720. For a family of four, four times the poverty line is $97,000. According to NPRM, if the family cannot maintain such level of income, USCIS may terminate the parole at any time. Other than the requirement, the proposed rule is silent on how this requirement will be enforced. It can only be determined after the rule becomes effective.

Summary

The International Entrepreneur Rule is an administrative measure created by the executive branch within its authority under the Constitution to supplement the existing parole rules. According to this rule, international entrepreneurs may enter into the U.S. after satisfying certain requirements. It will help ease international entrepreneurs’ coming to the U.S. to start up business. This is just a reform from the executive branch. For the long term, other immigration plans should still be contemplated by entrepreneurs if they and their families intend to permanently stay in the U.S. Such plans may include H, O or L nonimmigrant visas or Employment Based 2nd or 3rd preferences. Furthermore, the NPRM is only in the stage of seeking public opinions and has not become effective yet. After it becomes effective, there are still uncertainties about how USCIS would adjudicate the application under the regulations.

September 15, 2016

The End

DISCLAIMER: This article is composed to provide practical and useful information on the subject matter covered.  However, it is provided with the understanding that no legal, tax, accounting, or other professional services are being rendered or provided.  If legal advice or other expert assistance is required, the services of a competent professional should be sought.

国际企业家规则:创业企业家的赴美特别通行证

对国际企业家特批入境申请实施细则提议案的初步分析

张勇兵律师

2016年8月31日,移民局对外公布了国际企业家特批入境申请行政实施细则的提议案。向社会公众征询完善这一实施细则的建议和评论。 它是美国政府的行政分支为了吸引国际企业家到美国创业而出台的一项行政实施细则。

背景

美国现行的移民法于1990年颁布,至今已二十多年。而这二十多年来美国的科技却经历了突飞猛进的发展。虽然美国国会在这期间对1990年的移民法做了一些变更,但不能从根本上满足科技业的要求。造成了移民法对美国科技发展滞后的现象。其中的一些具体表现有:1)工作签证名额有限,高科技公司不能随心所欲地招聘外籍技工。而一些优秀的外籍人士由于不能获得工作签证不得不离开美国,到原居住国或其他国家寻求发展。2)劳工技术移民的名额长期不增加,导致无数外籍高技术员工需要等待很长的排期才能获得绿卡。以美国国务院公布的2016年移民签证排期表为例,中国出生的劳工二类优先申请仅排到在2010年1月1日前递交的申请人,而同类的来自印度的申请更是夸张地只排到2005年2月。移民排期每个月都会有更新,虽然有时会大幅跃进,不时也会出现大幅倒退。总的趋势是等候的时间越来越来长。3)许多有意在美国创业的外籍人士,由于不能满足现行的美国签证要求,不得不放弃了在美国的创业计划。

在第三个问题上,2011年,时任民主党参议员的克里向参议院递交了2011创业签证法案。该法案建议在EB5之后增加针对创业家的EB6移民类别。由于没有获得足够的支持,最终在国会不了了之。

2014年11月,奥巴马总统宣布美国政府将在宪法赋予的行政职权内对美国现行的移民体系进行行政改革。改革的项目之一就是寻求更有效的方法吸引和便利外国企业家在美国开办企业。8月31日公布的提议案是移民局是对这一问题改革的具体措施。

本文首先考察一下对国际企业家申请特批入境,都有哪些具体要求。然后对提议案做出一般评论。

首次申请特批入境

根据提议案,国际企业家在首次申请特批入境时,必须要证明企业家入境会给美国带来重大的公共利益。申请必须满足三个要求。第一,企业家必须拥有至少创业企业百分之十五的股份并且在企业的运营与发展中充当中心和积极的角色;第二,创业企业必须是新近成立的企业并具有快速成长和创造就业的巨大潜力。在递交申请时,成立不满三年的企业可以算作新近成立的。另外,那些在成立后的三年内获得了合格的投资或拨款的企业,也算在内。第三,在特批入境申请前的一年内,创企必须获得足够的政府拨款或有资质的投资机构注入的投资款。如果是政府拨款,数额不能少于十万美元。如果是投资款,至少要有三十四万五千美元。

提议案对政府的拨款部门和投资机构的界定都做了一定的限制。政府的拨款必须来自联邦,州或当地政府主管向创业企业拨款的部门。投资机构的定义更加严格。首先投资机构必须由美国直接或间接控股,而且常规性地向创业企业提供投资。获得投资后企业出现收益和就业的快速成长。其次投资机构必须有良好的遵纪守法的记录。至于什么样的投资机构才符合要求, 提案也提供了量化的标准。在申请递交前五年中,至少在三个不同的年份中,该机构向创业企业提供了不少于一百万美元的产权或可转换债券的投资。在接收投资企业中,至少有两个企业分别创造了不少于五个岗位的就业机会,或者分别实现了不少于五十万美元的年收入和不小于百分之二十的年增长率。

如果申请人能满足前两项的全部要求,只能满足第三项的部分要求,申请人须提供其他的证据来证明如何可以为美国带来重大的公众利益。

首次特批入境批准后,企业家可以在美国停留两年。配偶和未满二十一周岁的子女可以陪同进入美国。配偶可以申请工作许可,一旦获批可以在美国就业打工。在此期间,移民局会向企业家及其家属签发多次往返美国的旅行证件,以方便他们的国际旅行。

延期申请

两年期满之前,企业家可以向移民局递交延期申请。获批之后,可以在美国继续逗留长达三年的时间。对延期申请,移民局将继续使用同样的标准来审核,即企业家入境会大大惠及美国公众。为了证明企业家符合这个标准,企业家必须满足三个要求。头两条与初期申请的第一和第二个要求相似。在股权方面,企业家只要拥有至少百分之十的创企股份就可以满足第一条了。

第三个要求是移民局审查延期申请的重点。也是比较负有挑战的要求。根据提议案,企业家首先看创企是否可以满足三条客观要求当中的一条。如果不行,再看是否可以通过递交其他相关的主观证据,展示创业企业在快速成长和创造就业方面有巨大潜力。三条客观的要求实际上是考察创企两年期间在吸引投资,增加就业和总体经营的业绩。它们分别为:1)获得不少于五十万美元的追加投资或拨款; 2)创造了至少十个合格的就业岗位;3)实现了不少于五十万美元年收入和不小于百分之二十的年增长率。企业家只要证明企业在两年期间满足了其中的一条即可。

延期申请一旦获得批准, 企业家及其家属可以继续在美国境内居住长达三年。

评论

下面对提议案做一些总体的评论。

首先,移民局在8月31 日公布的只是一份征求意见的提议案,不是立即生效的实施细则。征求意见的期限为45天,到2016年10月17日为止。通常在征求意见期之后,移民局还需要额外的时间将提议案变为最终细则。向社会公布,最终生效至少要在公布最终细则的30天左右。估算起来,这条实施细则最快也要到2016年年底才有可能生效。

其次,这条实施细则的法律依据来自美国移民法案第212条第四款第五项。其中第五项的第一段赋予美国行政机构,就外籍人士申请入境的个案情况,酌情特批允许申请人临时入境美国。审批的标准有两个,一个出于紧急的人道主义考虑,另一个就是看申请人是否可以给美国带来重大的公众利益。法律明确表示,特批入境不等同于移民法中对持有签证的外籍人许可入境。因此,特批入境的企业家如果未来申请其他类别的移民或非移民签证,是不能在美国境内调整或转换身份的,而必须先离境到美国的驻外使领馆面签,获批后持相应的签证再次入境美国。

第三,提议案对企业家在美国居住期间的家庭收入做出了具体的要求。根据提议案,作为特批入境的条件,在美国居留期间,企业家的家庭收入必须保持在较高的水平,即每年不低于联邦贫困线的四倍。以2016年的联邦贫困线为例,一个两口之家的联邦贫困线收入是19360美元,四倍于贫困线就是63720美元。而四口之家的四倍于联邦贫困线的收入,2016年就是97000美元。提议案规定如果企业家不能保持这一家庭收入水平,移民局将随时终止企业家的特批入境权。提议案只是列出了这一要求,至于如何具体实施,还有待提议案将来生效后进一步观察。

总结

移民局的国际企业家规则是美国行政分支在宪法赋予的权力内对现行特批入境规定的补充。根据这一规则,国际企业家在满足了一定的条件后可以进入美国经营创业企业。这无疑会方便国际科技的高端人才赴美创业。由于提议案只是行政机构单方面的改革,从长期来看,国际企业家如果计划在美国长期居留,仍然需要考虑其他的移民规划,诸如H,O或L工作签证等,和职业移民一类或二类优先的移民申请。此外,由于提议案目前只在征求意见阶段,一旦生效后,移民局在审核特批入境申请时如何解释和应用该实施细则也存有很大的变数。

结束

2016年9月

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