One Last Surprise from the Obama Administration

On January 17, 2017, the Department of Homeland Security (DHS) published a final rule (“The International Entrepreneur Rule”) to improve the ability of certain promising start-up founders to begin growing their companies within the United States and help improve the economy through increased capital spending, innovation and job creation. DHS published this final rule just 3 days before the Trump administration took office.

Under this final rule, DHS may use its “parole” authority to grant a period of authorized stay, on a case-by-case basis, to foreign entrepreneurs who demonstrate that their stay in the United States would provide a significant public benefit through the potential for rapid business growth and job creation. The new rule is effective on July 17, 2017.

Under this final rule, eligibility may be extended to up to three entrepreneurs per start-up entity, as well as spouses and children. Entrepreneurs granted parole will be eligible to work only for their start-up business. Their spouses may apply for work authorization in the United States, but their minor children will not be eligible for work authorization.
 

Validity Period of the Entrepreneur Parole

Eligible entrepreneurs may be granted a stay of up to 30 months, with the possibility to extend the period by up to 30 additional months if they meet certain criteria, in the discretion of DHS. An entrepreneur may not exceed the maximum period of five years on a parole based on the same-start up entity.
 

How to Qualify for the Entrepreneur Parole

To qualify, an entrepreneur must demonstrate that he or she meets the following criteria:

• The entrepreneur possesses a substantial ownership interest in a start-up entity created within the past five years in the United States that has substantial potential for rapid growth and job creation.
• • An entrepreneur must possess at least a 10 percent ownership interest in the start-up entity at the time of adjudication of the initial parole; and
  • An entrepreneur must possess at least a 5 percent ownership interest in the start-up entity at the time of adjudication of the re-parole.
  • During the initial parole, the entrepreneur may continue to reduce ownership interest, but must at all times during the initial parole period, maintain at least a 5 percent ownership interest in the entity.
  • During the re-parole period, the entrepreneur may continue to reduce the ownership interest, but must, at all times maintain an ownership interest in the entity.
• The entrepreneur has a central and active role in the start-up entity such that the applicant is well-positioned to substantially assist with the growth and success of the business.
• The entrepreneur can prove that his or her stay will provide a significant public benefit to the United States based on his or her role as an entrepreneur of the start-up entity by:
• • Showing that the start-up entity has received a significant investment of capital from certain qualified U.S. investors with established records of successful investments;
  • Showing that the start-up entity has received significant awards or grants for economic development, research and development, or job creation (or other types of grants or awards typically given to start-up entities) from federal, state or local government entities that regularly provide such awards or grants to start-up entities; or
  • Alternative criteria: showing that they partially meet either or both of the previous two requirements and providing additional reliable and compelling evidence of the start-up entity’s substantial potential for rapid growth and job creation.

Definitions

Qualified Investment: An investment made in good faith that is not an attempt to circumvent any limitations imposed on investments, of lawfully derived capital in a start-up entity that is a purchase from such entity of its equity, convertible debt, or other security convertible into its equity commonly used in financing transactions within such entity’s industry. A qualified investment cannot come, whether directly or indirectly, from the entrepreneur; the parents, spouse, brother, sister, son or daughter of such an entrepreneur; or any corporation, limited liability company, partnership, or other entity in which such entrepreneur or the parents, spouse, brother, sister, son or daughter of such entrepreneur directly or indirectly has any ownership interest.

Qualified Investor: An individual who is a U.S. citizen or lawful permanent resident (i.e. green card) of the United States, or an organization that is located in the United States and operates through a legal entity organized under the laws of the United States or any state, that is majority owned and controlled, directly and indirectly, by U.S. citizens or lawful permanent residents of the United States. The “investor” must be an individual or organization that regularly makes substantial investments in start-up entities that subsequently exhibit substantial growth in terms of revenue generation and job creation.

A qualified investor must have in the preceding five years:

1. Made investments in start-up entities in exchange for equity, convertible debt or other security convertible into equity commonly used in financing transactions within their respective industries, comprising a total in such 5-year period of no less than $600,000; and
2. Subsequent to such 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.

Qualified Job: A full-time employment (35 hours per week) located in the United States that has been filled for at least 1 year by one or more qualifying employees. Combinations of part-time positions (even if when combined, such positions meet the hourly requirement per week) do not meet this definition of a “qualified job.”

Qualifying Employee: A U.S. citizen, a lawful permanent resident, or other immigrant lawfully authorized to be employed in the United States, who is not an entrepreneur of the relevant start-up entity or the parent, spouse, brother, sister, son, or daughter of such an entrepreneur. Independent contractors do not count as a qualified employee.
 

Applying for Initial Parole

1. The start-up entity must have received, within 18 months prior to filing the application for parole, a qualified investment of at least $250,000 from one or more qualified investors; or
2. The start-up entity must have received within 18 months prior to filing the application for parole, an amount of at least $100,000 through one or more qualified government awards or grants.

Applying for Re-Parole

To qualify for a re-parole, the entrepreneur must demonstrate that she or he is still an entrepreneur and that the start-up entity has:

1. Received at least $500,000 in qualifying investments, qualified government awards or grants, or a combination of such funding during the initial parole period; or
2. Created at least 5 qualified jobs with the start-up entity during the initial parole period; or
3. Reached at least $500,000 in annual revenue in the United States and averaged 20 percent in annual revenue growth during the initial parole period.

Alternatively, an entrepreneur who partially meets one or more of the above criteria may provide other reliable and compelling evidence of the start-up entity’s substantial potential for rapid growth and job creation.
 

Employment Authorization

An entrepreneur who is paroled into the United States is authorized for employment with the start-up entity immediately upon entry or approval. However, the spouse of an entrepreneur must apply for employment authorization with USCIS which issues an Employment Authorization Document (EAD).
 

Maintaining the Entrepreneurial Parole

As a condition of parole, an entrepreneur must maintain household income that is greater than 400% of the federal poverty line for his or her household size as defined by the Department of Health and Human Services.

An entrepreneur granted a parole must report any material change(s) to USCIS. Material changes include but are not limited to the following: a significant change with respect to ownership and control of the start-up entity; a cessation of the entrepreneur’s qualifying ownership interest in the start-up entity or the entrepreneur’s central and active role in the operations of the start-up entity; a sale or other disposition of all or substantially all of the start-up entity’s assets; the liquidation, dissolution or cessation of operations of the start-up entity; the voluntary or involuntary filing of a bankruptcy petition by or against the start-up entity; any criminal charge, conviction, plea of no contest, or other judicial determination in a criminal case concerning the entrepreneur or start-up entity; any complaint, settlement, judgment, or other judicial or administrative determination concerning the entrepreneur or start-up entity in a legal or administrative proceeding brought by a government entity; any settlement, judgment or other legal determination concerning the entrepreneur or start-up entity in a legal proceeding brought by a private individual or organization other than proceedings primarily involving claims for damages not exceeding 10 percent of the current assets of the entrepreneur or start-up entity.

DHS estimates that 2,940 entrepreneurs will be eligible under this rule annually.

We will keep you posted with any further updates.

The U.S. Citizenship and Immigration Services (USCIS) published a final rule that would positively impact certain employment-based nonimmigrants by providing them greater employment flexibility, which would also benefit their families. The provisions of this rule will take effect on January 17, 2017.

Aside from confirming some of the provisions of the Twenty-First Century Act and the American Competitiveness and Workforce Improvement Act (AC21) that relates to foreign workers, below are some of the notable changes in the final rule.
 

Retention of priority dates

The final rule clarifies that priority dates can be retained as long as the approval of the initial Form I-140 petition was not revoked for fraud, willful misrepresentation of a material fact,the invalidation or revocation of a labor certification or material error.
 

Retention of employment-based immigrant visa petitions

Under the final rule, Form I–140 petitions that have been approved for 180 days or more would no longer be subject to automatic revocation based solely on the withdrawal by the petitioner or the termination of the petitioner’s business. This will enhance job portability for individuals with an approved I-140 petition who are not able to adjust their status to permanent resident due to visa backlogs.
 

Eligibility for employment authorization in compelling circumstances

The final rule will allow certain nonimmigrants (and their family members) to apply for separate employment authorization in order to avoid difficult employment situations, such as having to leave the country due to visa backlogs. In order to obtain this type of employment authorization, the individual must:

• be in the United States in E–3, H–1B, H–1B1, O–1, or L–1 nonimmigrant status, including in any applicable grace period, on the date the application for employment authorization is filed;
• be the principal beneficiary of an approved Form I–140 petition;
• establish that an immigrant visa is not authorized for issuance based on his or her priority date, preference category, and country of chargeability according to the Final Action Date in effect on the date the application is filed; and
• demonstrate compelling circumstances that justify the exercise of USCIS discretion to issue an independent grant of employment authorization.

The validity period of compelling circumstances employment authorization is limited to one (1) year and may be renewed in 1-year increments.
 

Automatic extension of EAD validity

The final rule will also automatically extend the validity of existing EAD’s (Employment Authorization Document), issued to certain employment-eligible individuals, for up to 180 days from the date of expiration. USCIS requires that:

• the renewal application is filed based on the same employment authorization category as the previously issued EAD;
• the renewal application is timely filed prior to the expiration of the EAD; and
• the individual’s eligibility for employment authorization continues beyond the expiration of the EAD and an independent adjudication of the underlying eligibility is not a prerequisite to the extension of the employment authorization.

10-day nonimmigrant grace periods

Currently, only nonimmigrants in H-1B, O, and P classifications are afforded with this “10-10” grace period — 10 days before the petition validity period begins and up to 10 days after the authorized validity period ends. Under the final rule, the 10-day grace period will extend to nonimmigrants in E-1, E-2, E-3, L-1 and TN classifications.
 

60-day nonimmigrant grace periods

In addition to extending the availability of 10-day grace periods, the new rule adds up to 60 consecutive days grace period for each authorized validity period for certain high-skilled nonimmigrants even when their employment ends before their authorized validity period so that they may more readily pursue new employment or an extension of status. This applies to individuals (and family members) in E-1, E-2, E-3, H-1B, H-1B1, L-1, O-1 or TN classifications. In sum, during the grace period, these nonimmigrant may change employment, change nonimmigrant status or extend their status while in the United States.
 

The U.S. Citizenship and Immigration Services (USCIS) announced today that new fees will take effect beginning December 23, 2016. This means that applications and petitions postmarked or filed on or after December 23, 2016 must include the new fees or USCIS will reject the petition or application.

The fee for Form I-907, Request For Premium Processing Service ($1,225) remains the same.
 
Some of the new fees taking effect on December 23, 2016 are as follows:

Beginning November 29, 2016, the U.S. Customs and Border Protection (CBP) will begin implementing its Electronic Visa Update System (EVUS) online program, which is designed to update basic and other biographic information of travelers (regardless of age) who are carrying maximum validity (10-year) B1/B2, B1, and B2 visas in their passports issued by the People’s Republic of China. After this date, Chinese travelers without valid EVUS enrollment will not be admitted into the United States even if they have valid visitor visas.

History

In 2014, the United States and China entered into a reciprocal arrangement, which extends each country’s visa validity for eligible students and visitors.

That same arrangement recognized that travelers would be required periodically to complete an online form updating the information they used to apply for the visa. EVUS was developed to allow travelers to provide the most current information – including name, passport number, address, and employment – to immigration officials before traveling to the United States.

Notes

• CBP expects to include additional countries in the future.
• CBP plans to begin accepting early enrollment on a voluntary basis beginning this month.
• EVUS is available at: www.cbp.gov/EVUS (not yet available as of this post).
• EVUS fee is $8 (or approximately 53 RMB) per submission of updated information.
• Anyone can submit information to EVUS on behalf of the traveler.
• CBP recommends enrollment at least one week before scheduled departure to the United States.
• EVUS enrollment is valid for two years or when the traveler’s visa or passport expires, whichever comes first.
• EVUS will not require the traveler to submit a photograph or fingerprints.
• Travelers subject to EVUS requirements are required to enroll whether or not there is new information.

On September 23, 2016, the State Department announced that U.S. embassies and consulates will no longer accept photographs of visa and passport applicants wearing eyeglasses beginning November 1, 2016. This also applies to photos for U.S. passport applications. Exceptions apply in rare cases where applicants are required to wear eyeglasses for medical necessity.

Under the No Eyeglasses Policy, an applicant may wear eyeglasses in a visa or passport application photograph in rare circumstances of medical necessity, for example, when an applicant has had recent ocular surgery and eyeglasses are necessary to protect his/her eyes during urgent travel. Applicants must provide a medical statement signed by a medical professional/health practitioner in these cases. Posts must issue a limited one-year validity passport (using endorsement code 46 or endorsement code 109 for EPDPs) when the medical condition is temporary and travel is imminent.

Grace Period

The State Department will provide applicants with a 30-day grace period, during which time U.S. embassies and consulates are advised not to refuse visa or passport applications with photographs of applicants wearing eyeglasses.

Beginning December 1, 2016, this new rule will be strictly enforced — applicants must submit photographs without eyeglasses for all new visa and passport applications, or provide a medical statement.