Without action from Congress on new immigration regulations to create a visa category for entrepreneurs, the Obama Administration has used existing regulations to create a path for entrepreneurs to come to the U.S. to start businesses. At the end of August, the U.S. Department of Homeland Security (DHS) issued proposed regulations for the use of parole for entrepreneurs of start-up enterprises with high growth potential. The use of parole is expected to facilitate research and development in the U.S., create jobs for U.S. workers, and otherwise benefit the U.S. economy. It would be granted on a case-by-case basis and could assist up to an estimated 3,000 entrepreneurs. If an entrepreneur meets the qualifications for this use of parole, the parole would be granted initially for 2 years, with the possibility of a 3 year extension if the requirements for the extension are satisfied.

What is parole? Pursuant to Section 212(d)(5) of the Immigration and Nationality Act, the Secretary of DHS is granted the authority to use discretion to allow someone to enter the U.S. who may not otherwise be admissible or have any other means to enter the U.S. Someone who has been paroled into the U.S. has not been “admitted” into the U.S. even though the person is allowed to enter and remain in the U.S. The parole does not grant a person a status in the U.S. A person can be paroled into the U.S. either for urgent humanitarian reasons or significant public benefit.

The Administration has creatively used this parole authority and determined that entrepreneurs of start-up companies would be a significant public benefit to the U.S. economy if able to show a potential for rapid growth and job creation. The general criteria for the discretionary, case-by-case evaluation of parole applications include:

  1. The start-up entity must be formed in the 3 years prior to filing the application;
  2. The applicant entrepreneur must show least 15% ownership;
  3. The applicant entrepreneur must show that s/he will have an active and central role in the operations and growth of the entity (can’t be a passive investor); and
  4. There must be significant U.S. capital investment or government funding to show potential of rapid growth; the regulation sets forth specific threshold amounts from U.S. investors and/or government grants in the U.S., or other acceptable criteria.

In granting parole to entrepreneurs, the DHS must use its discretion to determine from the applications submitted that the entrepreneurs would provide a significant public benefit, and that the applicant merits a grant of parole. The regulation also sets out specific thresholds for granting a 3 year extension of the parole to demonstrate that the start-up continues to show substantial potential for rapid growth and job creation. The use of parole does not create a new visa category, and entrepreneurs who would benefit from this would not have a set path to a green card or citizenship.

In an article today, it is indicated that Hillary Clinton would support a “start-up” visa or visas for entrepreneurs, but there was not a clear statement as to whether or not Donald Trump would do the same. Law 360, Clinton, Trump Tackle Skilled Foreign Worker Issues, Allissa Wickham (September 16, 2016). I think that we can expect an increased focus on the immigration issue of skilled workers as the campaign continues.

Will this new regulation become final? The proposed DHS regulation above is just that – proposed. There is a 45 day period during which comments to the rule can be submitted, and then DHS needs to address all of the comments received, and publish a final regulation. It is uncertain whether all of this can be accomplished by the end of the year.

Posted by: Linda Rahal