Immigration and firm news

USICS Holds Entrepreneur Parole Listening Session

Today, USCIS held a teleconference “listening session” with stakeholders in order to get feedback and ideas about how to implement President Obama’s proposed “significant benefit” entrepreneur parole program. USCIS officials merely listened to ideas and gave very few comments except to clarify the points they were most interested in learning about. Anyone can submit suggestions or ideas to They are particularly interested in feedback about minimum investment amounts, types of entrepreneurs/start-ups to cover and how to combat fraud.

The entrepreneur parole program is one of several Executive Actions that President Obama announced in November 2014 in order to tweak existing immigration laws in light of Congressional failure to enact immigration reform. Back in 2013, the Senate passed a bipartisan bill, S. 744, that would have created new visa categories for smaller investors, founders, and other entrepreneurial categories. But, the House of Representatives never brought the bill to a floor vote. Since then, there have been high skilled worker oriented piecemeal bills introduced such as the Startup Visa Act, iSquared and others that offer new categories and tweaks to old categories to encourage immigrant entrepreneurs to develop their products and services in the USA. But none of these bills have come up for a vote. One of the reasons is that GOP members have used court challenges to President Obama’s other Executive Actions expanding the deferred action program to the undocumented as hostage before they vote on any other immigration legislation.

The purpose of the “significant public benefit” parole for entrepreneurs listening session was for USCIS to get ideas about who should qualify for parole, what kinds and amounts of investments should be permitted, what types of entrepreneurs should it cover and how can the government monitor the program for fraud. By soliciting input from the public, entrepreneurs, the lawyers that represent them, and other interested parties are able to participate in the rule making process.  USCIS will eventually come out with a proposed regulation published in the Federal Register for comment, and ultimately there will be a final rule, unless Congress comes up with something better. Unfortunately, no timeline was presented.

What exactly is parole?

Parole is neither a visa nor a green card. It is a regulation found at 8 CFR 212.5 that allows for the government to exercise its discretion to let someone into the US without a visa because of humanitarian or emergency reasons or due to a “significant public benefit.” All three branches of the immigration authorities have parole authority: ICE, USCIS and CBP. Parole is generally limited to a specific period of time; work authorization may be granted. Parole is generally limited to those cases where there are no other immigration categories available. In this case, USCIS would amend the significant public benefit rule to accommodate certain entrepreneurs. Finally, admission in parole status is a valid ground for future adjustment of status applications to permanent residence that requires one to have been “inspected and admitted or paroled” in order to file. On the other hand, parole can be terminated at any time. Many rights are given up when one is parole status.

Why are there no other immigration categories available for this proposed group of entrepreneurs?

The following categories are often quite deficient for start-up entrepreneurs and early stage new companies:

E-1/E-2 – treaty trader or investors: Many entrepreneurs or investors are not citizens of the treaty countries; many start-ups don’t yet have enough “substantial” trade with a treaty country; or the initial start up investments are insufficient to meet the “substantiality” and/or “not marginal” tests for E-2 visas.

H-1B specialty occupations: This visa category has many problems. First, is the lack of visa numbers and a one week a year filing period for most private sector cap-subject H-1B employers.  For FY 2016, there were 233,000 applicants for 85,000 visas! That means 2 in 3 applicants were not eligible, and among those selected, there was a lottery.  In other words, the entire process is like gambling. Secondly, the “Neufeld memo” limits H-1B visa holders to those with “employer-employee relationships.”  Although there are some workarounds to this for some entrepreneurs, this memo really limits the ability of founders to have significant ownership interests in their creations. Further there are wage and work site requirements that start up entrepreneurs cannot always afford in the early years of business.

O-1 extraordinary ability workers: This category is for those at the very top of their fields. Not every entrepreneur can meet this standard despite having a successful product or service. In addition, O-1 visa holders need employers or agents to sponsor them, an itinerary and industry, labor or peer group consultation.

F-1 students: Many new companies are being started by students.  Although optional practical training can be used to work as an entrepreneur, without ability to transition to H-1B or E visas or the other longer term work categories, eventually these students reach a dead end when their studies conclude and OPT ends, even for STEM grads who get extra OPT time. In addition, the OPT work experience has to be related to the major field of study.  Many entrepreneurs come up with business ideas outside of their field of study.

L-1 multinational transferees: This program requires an entity abroad that has common ownership and control with a US entity. The visa holder has to have worked for one year abroad within the three before application and must be a manager, executive or have specialized knowledge.  The L visa doesn’t help if a new company is created in the US without there having been a foreign entity related to it. Further, there has been a lot of difficulty getting L-1B specialized knowledge cases approved even with a newly revised memo on the subject. There is a lot of scrutiny and suspicion of fraud given to first year companies and renewals.

J-1 Exchange Visitors: The proposed significant public benefit parole for entrepreneurs is also aimed at fostering R&D in the USA.  Many J-1 exchange visitors come to the US to teach or as scholars and researchers.  However, deficiencies in this program include J-1 holders who are subject to a two-year home residence requirement who cannot switch to another business category without either going home first or obtaining  J-1 waiver. Another restriction is the shorter length of stay and the requirement that there be an approved program authorized for exchange in the first place.  This can be overcome by having an umbrella organization be  a chamber of commerce or a nonprofit organization, but most of these occupations require an employer-employee relationship, not a founder or investor situation.

Permanent Resident Category Problems: The entrepreneur parole program could accommodate those founders and investors who cannot yet qualify for EB-2 National Interest Waivers but have received investor funding, or cannot qualify for EB-1 extraordinary ability, EB-1 Multinational transferees or EB-5 $500k or $1 million investors that have to create at least 10 jobs.  (The House of Representatives recently introduced a bill to increase these amounts to $800k/$1.2 million among other new restrictive requirements.) In addition, the EB-1 Outstanding Researcher and Professor category requires an employer-employee relationship and at least three full time researchers if the petitioner is a private sector employer.  And, of course, the applicant has to show they have reached a very high level of accomplishment in the field of endeavor. It should be noted that USCIS is also working on a policy to expand the EB-2 National Interest Waiver category to attract entrepreneurs who benefit the national economy, but their proposal has not yet been released.

Thus, the significant public benefit parole program is intended to help early stage companies that fall within the gap before the level of success required to meet the current visas and green card categories above, but who “hold promise of innovation and job creation through development of new technologies or pursuit of cutting edge research.” Intended beneficiaries of entrepreneur parole could be researchers working on temporary R&D for new and/or promising areas, start up accelerators, entrepreneurs, and founders, and inventors.

What is USCIS looking for specifically?

As USCIS drafts a proposed regulation, they are looking for “fact based written evidence” and statistics on a number of entrepreneur activities and trends so they can develop a specific methodology as to who will qualify for parole and how.  Anyone can send information to

What were some of the suggestions, issues and comments raised by the audience?

1. Why not fix the existing regulations and policies first before using parole so entrepreneurs have a more reliable visa status v. the legal fiction of parole?

One commentator mentioned that even before USCIS looks at the parole program, it should look at the current obstacles in the visa system we have because most people will be interested in a visa or green card, not the legal fiction of parole status. For example, the Neufeld “employee-employer” memo is a major obstacle to H-1Bs. Why not revisit that issue and regulation? All small companies are subject to the fraud profile (length of time in business, number of employees, revenue amounts). Why not remove the automatic suspicion of all small businesses? Why not use a third party consultation process (like for O-1 visas) since adjudicators don’t know every industry?  City and County Economic Development Centers can be good 3rd party opinion providers. Right now, petitions can be revoked if there is a FDNS fraud investigation visit and the worker is not at a traditional work site.  Rather than tie the entrepreneur to an enterprise or work location, why not tie it to the person and their accomplishments such as is done for National Interest Waiver cases?

2. Procedural/Administrative Concerns

  • For how long would parole status last, so that contributors can fashion suggestions around an anticipated status eligibility timeline? Would parole status be concurrent with another visa status (e.g., F-1 student)? Could one convert to a green card instead of having to leave the US and break continuity of work?
  • Someone getting parole should also be able to travel. Chinese nationals in particular also have companies in China and want to be able to go back and forth to work on both. Nor do many want to live in the USA permanently by pursuing a green card.
  • Parole status should allow for extensions, and while extensions are pending, use the same 240-day continued work authorization rule while the extension is pending, as is used for H and L visas.
  • Entrepreneurs need predictability of status and speedy approval because everyone is on a very fast timeline.

3. Include Undocumented Entrepreneurs

Could undocumented immigrants apply? Many who cannot prove work authorization to be employees have become entrepreneurs instead creating many jobs.  What about having a Parole in Place (PIP)-like scheme such as is available to spouses, children and parents of US citizens and permanent residents who have served in the U.S. military? PIP allows an undocumented relative who entered without inspection to adjust status in the US instead of having to consular process and get a waiver, which is very time consuming and separates families. It is a tremendous benefit to the family.

4.  Consider Risk Issues from the Entrepreneurs’ and Investors’ Point of View

  • For example, many Chinese nationals are interested in pursuing their own businesses in the US rather than in EB-5 regional centers. But they don’t like risk.  The parole program would allow for more gradual testing of the US market, such that if successful by year three, they would invest more money and if really successful, should be so by year five.
  • USCIS should not constrain clients to a particular industry.  Many early stage companies undergo changes in the early phases – e.g., changes to products or services, markets, industries served, locations, etc. This should not be a bar to getting extensions. Foreign entrepreneurs don’t want to make mistakes with immigration. They need clear cut rules and an appeals process. They need adjudicators who are familiar with early start ups.
  • Outside investors want assurances that if they back a founder, the person will be able to stay in the USA, or else they won’t invest.Further, US investors are hesitant to invest in someone whose stay in the US is not certain.  Risk is a concern.
  •  Student entrepreneurs in particular need a clear path to status after OPT expires.

5.  Early stage companies need more immigration help than later stage companies.

  • Many successful companies have started on a shoe string and took years to get Angel funding, while others have chosen not to be beholden to outside funding.  The first year or two of a start up is about proof of concept – seeing whether an idea will work.  Then it has to be tested.  Once a market has been established, there may be substantial or sufficient revenues and yet some entrepreneurs will have not raised any money from outside the company. Or initial funding requests can be under $100k for proof of concept. Then seed money comes in at $300-$500k/$1.7 million at Silicon Valley levels only after proof of success. By then the investor wants the company near them (even if abroad etc.) One entrepreneur thought that it is too late to give parole status after they have seed or angel or VC money. The biggest need for immigration status is the beginning early stage of development, not the middle or late stages of investment.
  • There are college students  who have started companies but are graduating and are not yet ready for funding. Many enter their ideas, products, companies and/or business plans into competitions that are judged by universities and external judges. Winners can come away with prize money such as $50,000 to fund their project plus encouragement to apply for an entrepreneurship program that would provide seed funds from a business school, for example, or connect the student to Angel and early stage VCs.    These students will need to stay longer than OPT affords to they have more time to build a start up, and raise funds, later. It’s the zero to three-year period that is important for students and co/founders who cannot qualify for E visas, H-1Bs and others.  The investors want the founders to be here because they are the brains that are important for the next stage of funding but it can become impossible to get E or EB-5 visas or create 8-11 jobs in the first year. Many high level jobs are being created for engineers, marketing and business people. Most start ups will either succeed within the first five years, will fail, or will be bought out.

6.  Accommodate current funding methods, patterns and sources.

  • According to someone who represents early stage entrepreneurs, typical funding is $700,000 in the first year to 18 months; $1.4 million if Silicon Valley investments are included.  Many are F-1 students or B-1 visitors seeking funding.  Incubators and accelerator clients are being funded by crowd sourcing such as Kickstarter. Acceptable investment sources should include crowd funding sources.
  • USCIS should accept investments into an enterprise from anyone, including US citizens and people living abroad. USCIS should not just require “credible investors” or “accredited investors,” or the founder(s) being the investor.
  • USCIS should consider that early stage investments can vary by city, by sector and even by race. Therefore, they should not focus so much on the amount invested.

7.  Focus more on innovation and promise v. the amount and type of money invested or ownership.

  • Consider using bank loan type analysis  Since small businesses collectively create more jobs than bigger companies, USCIS should not be as focused on the substantiality of investments or numbers of jobs created. Other than a desk and a computer, many IT companies do not need much investment to start up. USCIS should focus more on the promise of the company in terms of innovation or job creation rather than on the amount of money invested into it.  Further, investment amounts should be relative to the type of company and whether it was a buy – out of an existing company or  a start up.
  • When considering a requirement for the minimum percentage of foreign national ownership, USCIS should consider that often the founder contributes knowledge or inventions or access to grants, but not personal capital.  Further, ownership interests get diluted over time as Angel and VC investors contribute funds in exchange for equity interests. US investors are looking for equity in the company and a place on the Board of Directors to advise and direct the founders. Founders often start out as 100% owner, become 50% owners six months later and later become 30% owners when the Angel investors come in. What if the foreign national is not the sole owner?  Therefore ownership interests should be between 15% (as is very common) to less than the minimum 50% required for E visas.

8.  Oversight and monitoring for fraud.

  • Consider having an annual report requirement using a checklist such as is required for EB-5 regional centers. Another example given was to use the two-year marriage and EB-5 conditional residence model. Since there is a high rate of failure in the first five years, having a reporting requirement will keep USCIS up to date and will require less focus on the amount of investments that are provided at later stages of a company’s growth after it is on a success track.
  • USCIS should consider even the craziest of ideas.  Many business ideas sound crazy at the beginning, but later become very successful.  Uber is an example. Crazy ideas don’t mean the concept is fraudulent. As mentioned above, many entrepreneurs go through a proof of concept then testing phase to see if the idea works and there is a market.

9. Job creation

If there are any job creation requirements, they should include Regional Center indirect type  job creation and counting of independent contractors, since the latter is very common with early stage entrepreneurs.


USCIS is soliciting more comments and ideas now.  Anyone can participate by emailing with “Significant public Benefit Entrepreneur Parole” in the subject line. Although there is no deadline, the sooner is better given that USCIS is probably working on a draft regulation at this time.  If and when this program comes to pass, this Seattle immigration law firm will provide this service to budding entrepreneurs.  In the meantime, stay tuned for more on this topic, or contact us at (206) 282-2279 if you are interested in pursuing one of the existing visa or green card categories.