Biden Administration Introduces International Entrepreneur Rule, Allows 5-Year Stay for Foreign Entrepreneurs

Nitin Konde

Jul 15, 2024 — 5 min read

US Immigration Introduces New International Entrepreneur Rule for Foreign Entrepreneurs

The Biden administration released updated details about the International Entrepreneur Rule (IER) last week. The IER permits foreign entrepreneurs to remain in the nation for a maximum of 5 years, provided their enterprise is determined to be significantly beneficial to the public. The entrepreneurs can be granted a first parole of 2.5 years, and if they meet additional funding, job creation, or revenue targets, they can be granted a second parole to extend their stay for up to 5 years.

According to the official statement, the International Entrepreneur Rule (IER) allows the Department of Homeland Security (DHS) to grant authorised stay periods to noncitizen entrepreneurs on an individual basis. These entrepreneurs must demonstrate that their business venture would significantly benefit the public and that they deserve a favourable exercise of privacy.

Entrepreneurs who are granted parole will be limited to working solely for their startup business under this provision. The parole eligibility of the noncitizen entrepreneur's spouse and children can be extended as well.

“The Biden administration’s revival of the International Entrepreneur Rule (IER) program provides great potential for Indian startups aiming to set up in the U.S. market,” said Siddharth Ugrankar, Founder & CEO at Qila.io. “Originally released by the Obama administration, it was shelved by the Trump administration. IER offers a way for foreign workers to obtain temporary residence in the U.S. through ‘parole,’ if their business venture can demonstrate significant benefits to American citizens and the nation.”

Frequently Asked Questions and Official Answers on Startup Requirements

What responsibilities and degrees of ownership are necessary for a startup?

At the time of the initial application's determination, you must have a central and active involvement in the operations of the startup business and a considerable ownership stake (at least 10%).

For a startup, what are the necessary conditions?

The startup, which must be a lawfully operating U.S. corporate entity, must submit its initial parole applications within five years of its formation. It also needs a lot of room to expand quickly and generate new jobs.

Is it possible to apply for parole while not in the US?

Yes, provided that both you and the startup satisfy all the requirements for consideration. To apply for an initial parole period under the International Entrepreneur Rule while outside the US, you'll need to provide biometrics, which includes a photo and fingerprints. Officials will notify you of the location to submit your biometrics once they have coordinated with the relevant Department of State or international USCIS field office.

Additional Requirements

Startup entities must show evidence of at least $264,147 in qualified investments from qualifying investors, or at most $105,659 in qualified government awards or donations, or alternative evidence that demonstrates substantial potential for rapid growth and job creation.

“The intended benefits of IER are substantial and resonate with the American dream, attracting entrepreneurs across the globe to become part of the U.S. growth story,” Ugrankar added. “Under IER, entrepreneurs receive authorisation to work at their startup and their spouses are eligible for employment in the U.S. The Rule has specific criteria to qualify, such as the venture demonstrating a $246,147 investment or $105,659 grants or rewards from the government.”

National Foundation for American Policy statistics show that US Citizenship and Immigration Services has only received 94 IER applications since FY21.

The US government’s tweak to the International Entrepreneur Rule (IER) is great news for Indian entrepreneurs, especially in tech. For Indian tech entrepreneurs, the rule's requirement of $264,147 in investments or $105,659 in grants is a reachable benchmark, opening doors to vast opportunities in innovation and job creation. As Indian startups flourish in the US, it can attract more foreign direct investment (FDI) back to India. Successful Indian entrepreneurs in the US often reinvest in their home country, funding new ventures and supporting local startups. Additionally, this can also strengthen economic ties between the two countries, stated Edul Patel, CEO and Co-founder, Mudrex.

According to immigration experts, the IER has not seen a significant increase in enrollment just yet because applicants are confused by the back-and-forth between administrations. One participant stated that the program does not lead to permanent residency, but rather to five-year temporary parole. This insecurity about the future could be a big turn-off. If an entrepreneur's startup fails, they will find themselves compelled to continue working for that company.

If an entrepreneur wants to stay in the country for more than five years, they will need to apply for a visa or green card from another country. Entrepreneurs from India face even more uncertainty about their long-term prospects in the US due to the decades-long green card backlog.

There have been a range of opinions on the revised US government regulation affecting foreign entrepreneurs. Some think it's a fantastic chance for Indian business creators, but others don't believe it will work. Issues of long-term stability and a clear route to permanent residency rank high on the list of worries.

“However, the IER program has faced some challenges due to its bureaucratic red tape and cumbersome application process,” Ugrankar noted. “The time for application processing is lengthy and unpredictable. Data from the U.S. Citizenship and Immigration Services (USCIS) shows that out of 94 applications received, many were denied or withdrawn, and only 26 were approved. Unlike the well-established H-1B visa program, the IER will need some simplification and transparency to gauge its success and outcomes.”

Some company owners believe that the US efforts to entice entrepreneurs demonstrate to governments around the world the importance of a strong founder ecosystem. Many, however, have spoken out against this change, arguing that, while appealing in theory, actually qualifying for the programme is a formidable challenge. The IER rule had previously gone into force during Obama's final days in office, but it has encountered obstacles since Trump took office. This is a huge boon for Indian entrepreneurs with US-based startup roots who want to launch a company in the US.

Countries such as Canada and Germany have come up with similar programs,” Ugrankar continued. “In Canada, under the Start-Up Visa Canada, entrepreneurs are offered permanent residence. Germany provides a range of visa options customised for startup founders, such as the Self-Employment Visa and the startup visa in Berlin. These programs have been more attractive to entrepreneurs due to their clearer guidelines and faster processing times. If the USCIS could make the process more efficient and faster, then it will attract more entrepreneurs to set up shop in the U.S.