USCIS Proposes Rule to Welcome International Entrepreneurs

A less &quot;PR&quot;-ey take (but still PR-ey non the less) on the White House Medium blog: <a href="https:&#x2F;&#x2F;medium.com&#x2F;the-white-house&#x2F;welcoming-international-entrepreneurs-d27571475dfd" rel="nofollow">https:&#x2F;&#x2F;medium.com&#x2F;the-white-house&#x2F;welcoming-international-e...</a><p>As an international founder who has had to suffer the stresses of dealing with US immigration while building a company based in the states, this is incredibly welcome news.

Anyone here aware of tax implications of the parole status?<p>Usually, &quot;us taxpayer&quot; status is only triggered with a proper visa (H1B, L1, O1, etc.) or permanent resident status (green card). I&#x27;ve never met any mention of tax status on parole.<p>To someone who has any non-trivial financial life outside the US (which I expect to be true for most people who would apply for this), a us taxpayer status is a horrible curse:<p>You might get a call from your bank&#x2F;broker&#x2F;insurer back home, telling you that they have to close all of your accounts except perhaps a checking and 1 simple saving (and perhaps those too). If you accrued any benefits in your pension plan, you have to report them each year _and_ plan to pay yearly and&#x2F;or dearly (because it is a PFIC[0]) for any profit made in that account, even though you cannot touch it for 30 years.<p>Also, if you own another business outside the US -- e.g. you had a previous startup, or operated through some kind of personal LLC providing services -- the &quot;us taxpayer&quot; status means that you have to start filing financial reports to the IRS as if those business were operated in the US (that is, according to US financial standards, regardless of where it operated - and that might mean double taxation despite any treaties in place).<p>Sure, you can just ignore it, and if your startup fails, no one will come after you. But of course, you plan to succeed, so be sure to read on PFICs, FATCAs, FBARs, and consult a US accountant that specializes in international taxation.<p>As a general rule, the US tax system assumes any financial dealings you have outside the US are an attempt to evade taxes, and penalizes that (whether by forms or by actual tax). Once it is assumed you plan to make the US the center of your life (green card, H1B, L1), those assumptions, through the &quot;us taxpayer&quot; status, affect you. If it is assumed you won&#x27;t stay (e.g. F1 visa for studying), they don&#x27;t.<p>So, what taxpayer status will parole put you in?<p>[0] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Passive_foreign_investment_company" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Passive_foreign_investment_com...</a>

It looks like this rule would provide the entrepreneur a 5 year stay (2+3 additional if the start-up is doing well), but I don&#x27;t see any mention of granting a green card, so what would happen to that entrepreneur on year 6?<p>EDIT: from the medium link posted in another comment by yurisagalov:<p>&gt; DHS will also publish guidance to clarify when entrepreneurs may self-petition for lawful permanent residence (also known as a “green card”).<p>EDIT2:<p>&gt; That entrepreneur will have the confidence of knowing whether she is eligible for the temporary “parole status” pathway, allowing her to start growing her company here right away. Later, she will know under what circumstances she may qualify for the green card pathway, if she is successful in creating jobs for U.S. workers and attracting more capital from U.S. investors, allowing her to become an American over time. (Note that these pathways will likely also be open to &quot;bootstrap&quot; entrepreneurs who are successful in generating revenue from U.S. customers, without needing to rely on external financing.)<p>(From <a href="https:&#x2F;&#x2F;www.whitehouse.gov&#x2F;blog&#x2F;2014&#x2F;11&#x2F;26&#x2F;entrepreneurs-wanted-president-s-actions-immigration" rel="nofollow">https:&#x2F;&#x2F;www.whitehouse.gov&#x2F;blog&#x2F;2014&#x2F;11&#x2F;26&#x2F;entrepreneurs-wan...</a> )

It&#x27;s pretty cool that they&#x27;re proposing <i>parole</i> rather than an actual visa - I never thought of that possibility, but it seems to fix a lot of policy-related issues, such as visa caps, and allow qualifying entrepreneurs faster entry. Might short-circuit the process and we don&#x27;t have to wait for politicians to agree that a founder visa makes sense.<p>Founders also wouldn&#x27;t have to get a certified LCA or meet minimum wage requirements, which can be pretty costly for a startup and is less relevant in case of founders (who are not taking anyone else&#x27;s jobs or lowering average wages). And generally founders would probably prefer (and have more to gain from) spending that money to grow the company.<p>I suspect there are downsides to paroles vs visa (like fewer rights or difficulty obtaining green card&#x2F;other visa types later maybe?), but this seems like a surprisingly good proposal to fix an acute issue.

For those looking to get a much more comprehensive look at this proposed rule from USCIS, read the advance version of the notice to be published in the Federal Register:<p><a href="https:&#x2F;&#x2F;www.uscis.gov&#x2F;sites&#x2F;default&#x2F;files&#x2F;USCIS&#x2F;Laws&#x2F;Articles&#x2F;FR_2016-20663_793250_OFR.pdf" rel="nofollow">https:&#x2F;&#x2F;www.uscis.gov&#x2F;sites&#x2F;default&#x2F;files&#x2F;USCIS&#x2F;Laws&#x2F;Article...</a> (PDF, 649 KB, 155 pages)<p>The sections most relevant to those who wish to apply under this rule would be:<p>IV. Proposed Changes<p>A. Overview of Parole for Entrepreneurs (pages 30 - 32)<p>B. Criteria for Initial Parole (pages 32 - 52)<p>1. Recent Formation of a Start-Up Entity 2. Applicant is an Entrepreneur Who is Well-Positioned to Advance the Entity’s Business 3. Capital Investment or Government Funding Criteria<p>C. Application Requirements for Initial Period of Parole (pages 53 - 61)<p>1. Filing the Application for Entrepreneur Parole (Form I-941) 2. Requirement to Appear for Submission of Biometric Information 3. Income-Related Condition on Parole 4. Adjudication of Applications 5. Limitation on Number of Entrepreneur Parolees Per Start-Up Entity 6. Authorized Period for Initial Grant of Entrepreneur Parole<p>D. Employment Authorization (pages 61 - 66)<p>1. Employment Authorization Incident to Parole with a Specific Employer 2. Employment Authorization Eligibility for Spouses 3. Documentation for Employment Eligibility Verification (Form I-9)<p>F. Re-Parole (pages 67 - 84)<p>1. Criteria for Re-Parole 2. Application Requirements for Re-Parole 3. Ensuring Continuous Employment Authorization 4. Technical Changes<p>G. Termination of Parole (pages 84 - 87)<p>1. Automatic Termination 2. Termination on Notice<p>H. Automatic Adjustment of Investment and Revenue Amount Requirements (pages 87 - 88)<p>V. Statutory and Regulatory Requirements<p>C. Executive Orders 12866 and 13563<p>3. Population of Entrepreneurs Potentially Eligible (pages 103 - 116)

Relevant essay: <a href="http:&#x2F;&#x2F;paulgraham.com&#x2F;foundervisa.html" rel="nofollow">http:&#x2F;&#x2F;paulgraham.com&#x2F;foundervisa.html</a><p>In 3-5 years we&#x27;ll probably hear founders tell stories about how this new rule allowed them to establish very successful companies in the US. That should help prove the value of a proper founder visa and (assuming the immigration system is still broken at that time) pass legislation to fix it.

Who knows what happens. The Canadian startup visa in three years managed to bring in 100 people including dependents <a href="http:&#x2F;&#x2F;www.cbc.ca&#x2F;news&#x2F;canada&#x2F;windsor&#x2F;start-up-program-disappointment-laywer-says-1.3443956" rel="nofollow">http:&#x2F;&#x2F;www.cbc.ca&#x2F;news&#x2F;canada&#x2F;windsor&#x2F;start-up-program-disap...</a>

Although they mention funding and grants as the criteria and not revenue, I hope &quot;Partially satisfying one or both of the above criteria in addition to other reliable and compelling evidence of the startup entity’s substantial potential for rapid growth and job creation.&quot; means that revenue will at least be considered to some extent.

There&#x27;s already a visa deal for foreign investors, the EB-5 visa. You have to invest at least $1M ($0.5M if you&#x27;re willing to invest in a bad area of the US) and create 10 jobs.<p>That&#x27;s why downtown Palo Alto has all those rug stores.

What happens, if you get one of these paroles, but your business falls apart for whatever reason within the first two years?<p>There doesn&#x27;t appear to be any specific language in the actual document outlining the rules changes, but it does say DHS would retain the right to terminate the parole at any time without prior notice and in DHS&#x27; discretion (pg. 84 in the PDF).<p>Looks like a little bit of gray area, unless there is some language in there about the parolees responsibilities to maintain the conditions under which the parole was granted and consequences if the parolee does not. I couldn&#x27;t see anything like that during a quick read through the document.

Great news for all the non-US budding entrepreneurs. Founders have to satisfy either of 3 criteria stated -<p>1. $345K from private investors.<p>2. $100k from govt or Federal entities.<p>3. partially satisfying the above criteria(up for a toss with uscis).<p>Some nascent YC potential companies might still loose out but nevertheless theres some glimmer of hope. Hope the rule gets published.

Wow!!! So great. I have two international cofounders. So stoked.

I am inviting foreign nationals in a nonimmigrant F-1 Post Completion OPT (EAD) status to meet in San Francisco and discuss their thoughts about the proposed rule.<p>I am drafting a response from a nonprofit research organization and H-1B cap-exempt employer perspective:<p><a href="https:&#x2F;&#x2F;www.eventbrite.com&#x2F;e&#x2F;lets-discuss-proposed-rule-by-uscis-to-welcome-international-entrepreneurs-tickets-27393876823" rel="nofollow">https:&#x2F;&#x2F;www.eventbrite.com&#x2F;e&#x2F;lets-discuss-proposed-rule-by-u...</a><p>or SMS text WHOMENTORSDOTCOM to 50500 to obtain my contact information.<p>This year, my organization endeavors to maintain a relationship with startup founders of a startup that would not otherwise be a qualifying institution to work part-time on-site at the non-profit research organization anywhere in the USA.

Does anyone know where and how the public can provide their comments? I cannot find a link on the page. Bootstrapped startups with no outside investments wouldn&#x27;t be eligible based on this criteria.

The number doesn&#x27;t quite work out: you got two years, and if the business can demonstrate passing certain benchmarks (500k funding or (500k revenue and 20% annual growth) or 10 &#x27;murican jobs), you get another 3 years. 5 years is enough if your business fails fast, but otherwise it&#x27;s unlikely to be sufficient for building one (on average).<p>This is a parole rather than a visa, so it still leaves the question on what&#x27;s the follow up afterward.

A great start for sure.<p>&gt;Receiving significant investment of capital (at least $345,000) from certain qualified U.S. investors with established records of successful investments<p>Not sure what does the qualified US investors mean though. Would seed funding&#x2F;angel funding from individuals not be considered for this? I guess this has been added to avoid abuse by wealthy foreigners, but how do they determine the qualified individuals or companies?

What will happen after the 5 years stay ? Should the entrepreneur pack up and leave ? Why should an entrepreneur startup something when he&#x2F;she is not sure about their residency in US. This rule says &#x27;parole&#x27; &amp; self petition, the residency path is not clear. And when it comes to residency, US immigration for skilled immigrants is so broken that you will regret applying for one.

Please note that this does not seem to be any improvement for citizens of &quot;US treaty countries&quot;, e.g. most northern and western european countries. Where the needed capital investment is only needed to be substantial to get an E-2 investor&#x2F;entrepreneur visa. E.g. 100-150k of initial investment needed as far as I know ;)

&quot; A subsequent request for re-parole (for up to three additional years) would be considered only if the entrepreneur and the startup entity continue to provide a significant public benefit as evidenced by substantial increases in capital investment, revenue or job creation.&quot;<p>How will they measure this? It&#x27;s so subjective.

Is it really required to found a startup inside US to have a greater chance of success? Or more specifically in the bay?<p>I have seen many successful startups found in other countries (such as China) Alibaba, Tencent, etc.<p>Is this a push that all talented software engineers HAVE TO move to the bay to become successful?<p>I&#x27;m very doubtful on that claim.

This is a great step forward. I actually like the idea of parole rather than a proper visa upfront. First, get entrepreneurs to US and let them show their skills. If they succeed, they can always apply for GC directly through the existing outstanding skills category or take an investor visa.

<a href="https:&#x2F;&#x2F;www.cia.gov&#x2F;library&#x2F;publications&#x2F;the-world-factbook&#x2F;rankorder&#x2F;2199rank.html" rel="nofollow">https:&#x2F;&#x2F;www.cia.gov&#x2F;library&#x2F;publications&#x2F;the-world-factbook&#x2F;...</a>

&quot;Give me your tired, your overworked, your entrepreneurs yearning to innovate.&quot;

If entrepreneur can keep at least 50% of the company then already today L-1 could be a viable option.<p>Looks like the proposed parole is quite similar to L1 except instead of foreign company there&#x27;s foreign private person direct relationship.

Can anyone see if this applies to bootstrappers or solo founders?<p>It doesn&#x27;t look like it. Referring to the type of business that can have significant revenue, but doesn&#x27;t need investment or even necessarily employees.

As another international founder, it is definitely a great step in the right direction. I am still missing an easier way to bridge the transition gap into a Green Card, maybe a different EB?

This is great for the US and many foreign entrepreneurs, but would suck for other country&#x27;s startup efforts. Its like the Golden State Warriors getting Kevin Durant.

This sounds like the holy grail for international founders, but how likely is it to pass ? Anyone here in the know ?

Seems like the necessary investment amounts are pretty low.

My prediction: This too will be gamed just like the rest of the immigrant worker visa systems (H-1B, OPT, O-1, EB-5, etc). That big fat vague 3rd criteria will see to it. A whole cottage industry of immigration attorneys who specialize in this visa will crop up to prey on unsuspected foreigners and collude with the knowing and corrupted ones.<p>The fact of the matter is most foreigners complaining about not being able to start businesses in the US don&#x27;t have profitable or well funded businesses. The ones that do have profitable and well funded business can easily set up shop on US soil and don&#x27;t need to immigrate here and can use L1 visas when they do need to come state side.<p>To me the most interesting aspect to this visa is it takes away the talking point from the H-1B proponents that immigrant workers are job creators because immigrants start companies that employ citizens.

If you are a hardware entrepreneur there may be better options than trying to set up in the USA.<p>Try setting up shop in Shenzhen, China. Just spent a week over there. It is truly a Hacker&#x27;s Paradise.<p>You can validate your ideas and get an MVP out in much faster time than the USA. You can be close to your eventual supply chain when you do make it big. It may sound a bit like premature optimization but the advantages are huge.<p>Of course, it will not hurt to learn a bit of Chinese (Mandarin) if you do decide to take that route. At least start with a few useful phrases to help break the ice. &#x27;Ni Hao&#x27; (Hello); &#x27;Xie Xie&#x27; (Thank You) and &#x27;Duo Shuo Qian&#x27; (How much does it cost?). Learning the number system will also help know what the price is.<p>I spent a lot of time in the Huaqiang Bei and LoWu malls.<p>A special shoutout to Andrew &quot;Bunnie&quot; Huang for his &#x27;The Essential Guide to Electronics in Shenzhen&#x27;[1]. It was invaluable.<p>Another shoutout to my Mandarin teacher Larry Xue and the San Jose Learning Center.[2] Attending his classes made me so much more confident that I could manage there even with the language barrier.<p>1. <a href="https:&#x2F;&#x2F;www.crowdsupply.com&#x2F;sutajio-kosagi&#x2F;the-essential-guide-to-electronics-in-shenzhen" rel="nofollow">https:&#x2F;&#x2F;www.crowdsupply.com&#x2F;sutajio-kosagi&#x2F;the-essential-gui...</a><p>2. <a href="http:&#x2F;&#x2F;sanjoselearningcenter.com&#x2F;mandarin.php" rel="nofollow">http:&#x2F;&#x2F;sanjoselearningcenter.com&#x2F;mandarin.php</a>

Summary: - New startup entity (&lt; 3 years old) - Atleast 10% stake - No more than 3 applications per startup - Atleast $345,000(VC,Angel,Incubator) or $100,000(govt grants) or show public benefit if less funding available - Initial stay for 2 years - Employment authorization only from startup - Minimum salary at 400% poverty level - Spouse gets EAD, but minor children do not.<p>After 2 years, 3 years extension - Atleast 10% ownership and active role in startup - Atleast $500K additional funding OR $500K revenue with 20% growth OR 10 Full time Jobs<p>0

This would definitely help foreign founders but after they have founded the company in US since 3 years. That initial period of founding a startup is the most difficult part for immigrants in USA as their visas are tied to employer (like H1B).<p>So would this &quot;startup visa&quot; help in anyway in that initial stage of founding a startup?

How about a rule to welcome anyone who isn&#x27;t a criminal?

My startup will focus on building walls. I believe this is a burgeoning market.

Unfortunately wealthy foreigners are just going to abuse the hell out of this to drive up real estate prices.

When I looked at that title I thought: &quot;new rule in ____ . Leaves drivers furious!&quot; and wondered how HN was infiltrated with click-bait advertising.<p>The Internet has ruined me.

I wish having an advanced degree was a criteria here. A few years ago, I noticed that Britain would give a blanket visa to anyone with an MBA from a list of top international schools. How about something like that for people with Masters&#x2F;PhDs (in STEM) from top-50 schools in the world.<p>That said, the proposed rule might mean if one gets into YC&#x2F;techstars, etc. they would be able to get a visa for the US easily.<p>The limited term and renewals do raise some flags. But I guess if you are successful with your startup in the given time period, you can apply for a green card through other categories like Extraordinary Ability, etc.