On Friday, the White House announced proposed new visa rules for international entrepreneurs. Having advocated for a startup visa for years and then to have authored a booked called “The Startup Visa: Key to Job Growth and Economic Prosperity in America,” I am thrilled to see the rules published. I applaud the administration for its hard work.
The proposed rules were posted by the Department of Homeland Security last week, and is expected to be published on the Federal Register soon. When the Federal Register publishes the proposal there will be 45 days for the public to comment, after which the Department of Homeland Security will take those comments into consideration.
All those in the startup eco-system should take some time to review the rules and ensure appropriate comments are sent to the Department of Homeland Security. This is our opportunity to share our thoughts on how to make the rules the best as they can be.
Do we really need a startup visa?
Studies suggest that more than 40 percent of Fortune 500 companies were founded by immigrants or the children of immigrants. America’s history is intertwined by immigrant entrepreneurs such as Levi Strauss, John Nordstrom, and more modern ones such as Paypal founder Max Levchin and Tesla Motors CEO Elon Musk. These household names are also among America’s biggest employers. Entrepreneurs must be part of our strategy for economic development but also for continuing to lead the world in innovation.
There is no question that in a global economy with modern technology, entrepreneurs can be anywhere in the world. It is a boon for the country that gets them, and here in the U.S. we have steadily been losing this competition. Congress has refused to take action and let bill after bill for the startup visa die. The entrepreneurial parole proposed by these new rules, while not ideal, is better than having no option at all. So, let’s join together in applauding the Obama administration for keeping its word on entrepreneurship.
What do the proposed rules say?
According to the proposal, an entrepreneur could be eligible to receive two years admission into the U.S. on parole, with the possibility of another three years’ parole, if the following criteria are met:
- Formed a startup in the United States within the last three years of his or her application;
- Ownership of at least 15 percent of the startup and has an active or central role in operation;
- Has raised at least $345,000 from a qualified investor within the last 12 months, or at least $100,000 in grants or awards, or has partially met the prior two criteria.
The proposed rules also state that an entrepreneur must show household income of 400 percent above poverty guidelines, which can include a spouse’s income. The spouse will also get a work authorization for the duration. You can click here for my detailed summary of the proposal.
The application will be completed on a new form created specifically for this purpose — Form 941 with a filing fee of $1,200. Spouses and children will use the traditional Form I-131. The entrepreneur and dependents will have to pay biometrics fees of $85 also and undergo background check. The entrepreneur will have work permission, incident to approval. That means the entrepreneur can work as soon as there is an approval and will not have to file for an employment authorization document, commonly referred to as EAD.
At the time of renewal, Form I-941 will be used again with a fresh fee of $1,200. At that time, the entrepreneur must maintain at least 10 percent of the business entity and must have created at least ten full time jobs for American workers. The entrepreneur will get 240 days automatic work authorization while renewal of parole is pending. A renewal application can be made up to 90 days in advance of parole expiration.
If a case is denied, there will be no appeal. However, United States Citizenship and Immigration Services can reopen a case on their own motion. If a parole is terminated for any reason, the entrepreneur may be given an option to rebut those allegations.
The entrepreneur must notify the government of material changes in the startup. If ownership drops to less than 10 percent, that will be ground for automatic termination of the parole. Automatic termination can also occur if there is a criminal conviction any many other such grounds.
How do I comment? What should I say?
Comments from the public are crucial to ensuring that a good balance is set in these provisions. The public may comment for 45 days after the rules are published to the Federal Register. My immediate thoughts are that it would be important to lower the threshold of qualified investment from $345,000 to $250,000 as per previous Startup Visa Act provisions. I also think it is imperative to lower the household income from 400 percent to no more than 200 percent over poverty guidelines. Both these benchmarks are just too high.
I will be sure to share my comments with the Department of Homeland Security. But if this issue is important to you, and it should be if you are part of the startup echo systems in anyway, then please share your thoughts with the administration and the Department of Homeland Security at www.regulations.gov quoting DHS Docket number USCIS-2015-0006.