Greetings! Entrepreneurs within various immigrant communities have continuously made exceptional contributions to America’s advancement and economy. As many as one in every four small businesses and high-tech start-ups across America was established by an immigrant. Today, we are sharing vital information about The International Entrepreneur Rule an Obama-era program that helps foreign entrepreneurs start business in the United States.
The International Entrepreneur Rule (“IER”) is a federal regulation, issued by the Department of Homeland Security (DHS), that creates a clear pathway for high-potential entrepreneurs to stay in the United States and start or grow new companies. It permits foreign entrepreneurs to stay in the United States for up to five years as long as they own a minimum 10% ownership of the startup and generates at least $250,000.00 from U.S. investors. Although this program is a great initiative under the Trump Administration it remained largely dormant and proposed for elimination in 2018.
In May 2021 under the Biden Administration, the DHS relaunched the IER program to grant temporary entry to qualifying foreign nationals based on their role as entrepreneurs of a recently formed start-up. The DHS can grant “parole” to foreign entrepreneurs who can prove they are bringing “significant public benefit” to the U.S. Qualified entrepreneurs can be granted entry to the U.S. for a period of 30 months. This permit may be extended for a maximum of five years. If granted, the entrepreneur is required to work strictly for that start-up company. They are not permitted to engage in other employment or remain in the U.S. if they discontinue the intended work for any reason.
As mentioned above, the IER requirements have important distinctions as compared to other entrepreneurial options. Below are the minimum applicant and company requirements for the IER program:
- The applicant must have at least 10% ownership stake in the US start-up company;
- The applicant must have a central and active role in the company and be well-positioned to assist in its growth and success;
- The start-up company must have been created five years prior to the parole application; and,
- The company must be lawfully doing business in the US and must have substantial potential for growth and job creation.
The IER presents is exciting new opportunity for foreign entrepreneurs however U.S. tax planning should be a major consideration for such companies. In light of the IER’s requirement that the foreign national entrepreneur play a central and active role in the company, all prospective entrepreneurs should be aware of the U.S. tax implications arising from spending a significant amount of time physically present in the United States.
Entrepreneurship and business creation are key drivers of a healthy, growing economy. At The Law Offices of Marjory Cajoux, we are recommending clients who qualify for Entrepreneur Parole to apply now. We have over 25 years’ experience in helping foreign-based entrepreneurs realize their portion of the American Dream through U.S. based entrepreneurship.
