U.S. Citizenship and Immigration Services (USCIS) recently announced updated thresholds for the International Entrepreneur Rule (IER), which enables foreign startup founders to start and grow businesses in the United States. This Obama-era program, aimed at fostering innovation and economic growth by attracting global entrepreneurial talent, had previously seen limited uptake. Here’s an overview of the key updates effective as of October 1, 2024:
Updated Investment and Revenue Thresholds
To qualify, foreign entrepreneurs must now demonstrate their startup has met increased funding requirements:
- Initial Investment Requirement: An investment of $311,071 (previously $264,147) or $124,429 (previously $105,659) in government grants or awards.
- Alternative Evidence: If the startup doesn’t fully meet the above criteria, founders may submit other reliable evidence showing high growth potential and job creation.
For renewal applications, startups must demonstrate:
- Investment: $622,142 (previously $528,293) in investments,
- Job Creation: At least five jobs created, or
- Revenue: Annual revenue in the U.S. of $622,142 (previously $528,293).
Updated Requirements for Investors
To strengthen program integrity, USCIS updated the criteria for investor qualifications. Investors must have:
- Minimum Investment: Invested at least $746,571 (previously $633,952) in startups in exchange for equity.
- Track Record of Success: After investment, at least two startups must have each created at least five jobs or generated $622,142 in revenue with an average annual growth of 20%.
Other Key Eligibility Criteria
- Business Age and Location: Entrepreneurs must be associated with a U.S. startup formed within the past five years.
- Stay Duration: Entrepreneurs can receive an initial stay of up to 2.5 years, with a possible 2.5-year extension if the startup shows substantial growth in capital, revenue, or job creation.
- Spousal Work Authorization: While spouses can apply for work authorization, children are ineligible.
Background and Current Challenges
Launched in January 2017, the IER faced an uncertain future when the Trump administration moved to suspend the rule. However, a court ruling required DHS to continue processing applications. The Biden administration has since supported the rule, emphasizing the importance of foreign entrepreneurship to the U.S. economy. Despite this, the program has seen limited success: since FY 2021, only 94 applications were filed, with 26 approvals, 28 denials, and 40 pending or withdrawn cases.
Boosting the Program’s Impact
To increase adoption, USCIS updated its website on July 12, 2024, adding a detailed FAQ to clarify eligibility and application processes. This program provides a unique opportunity for international entrepreneurs and may also promote further immigration reform discussions to attract global talent effectively.
Compliance and Eligibility Requirements
Who Qualifies for the Extended Validity?
Under the International Entrepreneur Rule (IER), non-citizen entrepreneurs can qualify for temporary stay in the U.S. if they meet specific criteria. To be eligible for the extended validity of their work permits, applicants must demonstrate:
- Substantial Ownership: The entrepreneur must possess at least a 10% ownership interest in the startup during the initial parole period, which must decrease but remain above 5% thereafter.
- Active Role: The entrepreneur must play a central and active role in the startup’s operations, utilizing their knowledge, skills, or experience to facilitate growth.
- Startup Formation: The startup must have been formed in the U.S. within the past five years and demonstrate substantial potential for rapid growth and job creation.
- Investment Thresholds: Startups need to show at least $311,071 in qualified investments from U.S. investors or at least $127,000 in qualified government awards or grants.
Strategies for Meeting the New Standards
To meet these investment thresholds, entrepreneurs can consider several strategies:
- Securing Venture Capital: Approach venture capital firms or angel investors who are willing to invest in promising startups.
- Applying for Grants: Explore federal, state, or local government programs that offer grants to startups, particularly those focused on innovation and technology.
- Alternative Evidence: If unable to meet the investment threshold directly, entrepreneurs can provide alternative evidence demonstrating significant growth potential, such as customer acquisition metrics or partnerships with established companies.
Examples of Qualifying Investment Sources
- Venture Capital Firms: Investments from recognized venture capital firms that specialize in funding startups.
- Angel Investors: Individual investors who provide capital for startups in exchange for equity or convertible debt.
- Government Grants: Funds received from government programs designed to support innovation and business development.
Alternatives to the IER Visa
Overview of Other U.S. Visa Options for Entrepreneurs
For entrepreneurs considering alternative routes to establish their businesses in the U.S., several visa options are available:
- E-2 Visa: For investors from countries with treaties with the U.S., allowing them to invest a substantial amount in a U.S. business.
- O-1 Visa: For individuals with extraordinary ability in their field, including business.
- EB-5 Visa: For investors who invest a minimum amount (usually $1 million or $500,000 in targeted employment areas) in a new commercial enterprise that creates jobs for U.S. workers.
Comparison of the IER Visa with These Alternatives
The IER visa focuses on startup potential and does not require prior achievements like the O-1 or EB-5 visas. The E-2 visa requires a substantial investment but is limited to treaty countries, while EB-5 has higher financial thresholds but offers a pathway to permanent residency.
When an Entrepreneur Might Consider Another Route
An entrepreneur might consider alternative routes if:
- They do not meet the IER investment thresholds.
- They seek permanent residency rather than temporary parole.
- They have established a strong record of achievements that qualifies them for an O-1 visa.
Legal and Financial Considerations
Role of Legal Counsel in Navigating the IER Visa Process
Engaging legal counsel is crucial for navigating the complexities of the IER visa process. An immigration attorney can help:
- Ensure compliance with all eligibility requirements.
- Prepare comprehensive applications that meet USCIS standards.
- Guide on securing necessary investments or grants.
Tips for Securing Investors or Grants Under the New Requirements
- Develop a Solid Business Plan: A well-prepared business plan that outlines your startup’s goals, market analysis, and financial projections can attract potential investors.
- Network Actively: Attend industry events and networking opportunities to connect with potential investors and partners.
- Leverage Online Platforms: Use crowdfunding platforms designed for startups to secure small investments from many individuals.
Common Pitfalls to Avoid When Applying
- Incomplete Documentation: Ensure all required documents are submitted accurately and completely to avoid delays or denials.
- Ignoring Deadlines: Be mindful of application deadlines and ensure timely submissions.
- Underestimating Evidence Requirements: Provide compelling evidence of your startup’s potential beyond just meeting financial thresholds.
Current Date: January 7, 2025
As we assess these immigration pathways today, entrepreneurs need to stay informed about evolving regulations and opportunities within U.S. immigration policy.
How Law and Visas Can Help?
At Law and Visas, our team of expert immigration consultants is here to make your travel to the US straightforward and successful. Whether you’re applying for a Green Card, Visitor Visa, or Study Visa, we handle every step from preparing your application to gathering the required documents.
Our immigration Consultants and Lawyers ensure that your application meets the highest standards, with no details missed. We’ll also keep you informed throughout the process and coordinate with the immigration office or embassy on your behalf.
Law and Visas has a strong record of helping clients secure the visas/permits they need in the US. Call us today at +234 812 5505 986 to learn how we can assist you.
