As published in the Immigration Daily on May 23, 2017.
Despite all the gloomy news about immigration ala Trump, U.S.C.I.S. is preparing to bring into the U. S. ambitious immigrants and their families to begin the road towards permanent residence. They will be given up to 5 years of legal stay to accomplish their purpose. The entrepreneur parole rule will come into effect on July 17, 2017, for individuals hoping to begin the next generation of innovative startups. Is this the new hope for China EB-5 investors stuck under a 6-8 year backlog or another option for all investors? U.S.C.I.S. and experts in the field have many times interchanged the terms “investor” and “entrepreneur” in describing participants in the EB-5 program. It remains a possibility that some investors may qualify, but most would likely not in light of the different requirements of the new program. The conditions are:
- Within the 18 month period prior to filing the application for parole, the entrepreneur received a qualified $250,000 from one or more qualified investors, or
- $100,000 through one or more qualified government grants or awards.
- If an applicant only partially satisfies either one of the 2 above conditions, he or she can provide other reliable and compelling evidence of the startup entity’s substantial potential for rapid growth and job creation.
The amount of money is certainly not intimidating compared to the current amounts required for the EB-5 program and especially the levels being discussed in U.S.C.I.S.’s proposed regulations of January 13, 2017 (raising investments for targeted employment areas (TEAS) from $500,000 to $1.3 million and all other investments from $1 million to $1.8 million). However, the huge hurdle is that the investment must come through a qualified U. S. investor . A “qualified investor” is defined as a U. S. investor who in the past 5 years has made investments in startup entities of no less than $600,000 and at least 2 of the entities created at least 5 qualified jobs or generated at least $500,000 in revenue with average annualized revenue growth of at least 20%. U.S.C.I.S. made clear that it is looking for established U. S. investors such as venture capital firms, angel investors, or start up accelerators. The qualified investor also cannot be closely related such as the entrepreneur himself or herself, parent, spouse, child, or sibling, or any entity where the entrepreneur or relative has an ownership interest. But for those who qualify, they can obtain up to 5 years of entrepreneur parole, and may put themselves in line for permanent immigration through the EB-2 National Interest Waiver (NIW) category.
The national interest waiver category was created with the Immigration Act of 1990 to allow EB-2 immigrant visa classification including waivers of the job offer requirement if in the national interest to members of the professions holding advanced degrees or their equivalent, and to individuals who because of their exceptional ability in the sciences, arts, or business would substantially benefit prospectively the national economy, cultural or educational interests, or welfare of the United States. Section 203(b)(2)(B) of the Immigration and Nationality Act (INA) allows a waiver where it will substantially benefit prospectively the national economy, cultural or education interests, or welfare of the United States. The precedent decision of Matter of New York State Department of Transportation, 22 I & N Dec. 215 (Comm., 1998) (“NYSDOT” ) stated 3 requirements to be met before a waiver could be granted – that the waiver applicant had to seek employment in an area of substantial intrinsic merit; that he or she had to demonstrate that the proposed benefit to be provided would be national in scope; and that he or she had to demonstrate that it would be contrary to the national interest to potentially deprive the prospective employer of the services of the waiver applicant by making available to U. S. workers the position sought by the waiver applicant. Under this reading, many NIW applicants were simply denied on the basis that the applicant could not demonstrate that non-allowance of the waiver for labor certification would damage the national interest. Recently however, the NIW has become more intriguing and accessible with the demise of NYSDOT in Matter of Dhanasar , 26 I & N Dec. 884 (AAO 2016) on December 27, 2016. There is now a new three-part test:
- Whether the work that the person would be doing has both substantial merit and national importance.
- Whether the person is well-positioned to advance the proposed work.
- Whether the requirement for a labor certification is impractical, e.g. entrepreneur, or if there is availability of U. S. workers, whether on balance it still would be sufficiently beneficial to the country to allow an NIW to be approved.
This new interpretation does not require either harm to the national interest or a comparison against U. S. workers in the field. An unpublished decision of the AAO on the same date that Dhanasar was issued is instructive on how the new standards would apply to entrepreneurs.
Matter of E-C-H- (AAO 12/27/16) featured an entrepreneur wanting to serve the U. S. veterans’ community by forming his own small consulting firm through which he would undertake projects aimed at improving veterans’ services and wounded warrior care. In approving the petition, the AAO found that substantial merit was proven by letters from prospective clients, a business plan for the company, and submitted news articles and research reports describing the plight of returning veterans and the necessity of ensuring adequate services for their physical and emotional well-being. National importance was proven by probative expert letters describing the importance of effective programs for U. S. troops upon returning home and transitioning to civilian life along with submitted news articles and other evidence documenting gaps in veterans’ health services and discussing the federal government’s initiatives. The AAO found that the petitioner was well-positioned to advance the proposed endeavor through his numerous support letters describing his expertise and record of success in his past work relating to Veterans Affairs, a detailed business plan, and communications from several prospective clients expressing their eagerness to use his services. Finally in balancing the factors to determine the waiver’s benefit to the United States, the AAO cited the petitioner’s experience in the field, the immense value of improving programs and assisting organizations that provide support and advocacy for U. S. veterans and wounded warriors, and that, based on the petitioner’s intention to start a consultancy firm through which he would be self-employed, it would be impractical for him to obtain a labor certification.
Dhanasar is new and E-C-H- is only illustrative of how the Dhanasar factors can apply in an entrepreneur case for NIW immigration. Entrepreneurs under parole may certainly have vastly different situations that U.S.C.I.S. will approve as long as they meet the 3 requirements of Dhanasar. Lending credence to the belief that many deserving cases will be approved is that most if not all of the petitioners will have been prescreened by the “Shark Tank” environment through which entrepreneurs must pass to gain funding for their projects under the parole rule – that experienced outside investors sufficiently believe in the innovative vision of the individual, which is certainly encouraging not only for entrepreneurs seeking parole but also NIW classification.
Insofar as mainland China and India born are concerned, the new pathway likely requires a legislative fix before it becomes truly useful. The impediment is the EB-2 category itself which is backlogged at present to cases filed by March 1, 2013 for China and July 1, 2008 for India (Although the time indicated for China EB-2 is 4 years plus, visa chart time does not correlate to calendar time, and it may take longer than 5 years for the category to advance 4 years in chart time). U.S.C.I.S.’s suggestion that paroled individuals may apply for any nonimmigrant classification for which they may be eligible is not a good solution in light of the lottery aspect of H-1B’s and the high requirements of O-1 extraordinary aliens in the sciences and business. Either the NIW must have a separate quota of its own, or the time under parole must be extended under a device such as in the American Competitiveness in the 21st Century (AC-21) which allows H-1B holders to stay past the maximum time allowed as long as they either have a labor certification application filed 365 days or an I-140 approval. Under NIW, no labor certification is involved as petitioners directly apply for I-140 approvals. The second solution appears more doable as it mostly involves adding words such as “entrepreneurs under parole” alongside H-1B holders. Either action would allow more utility of the new pathway to nationals of two countries known for the scientific and entrepreneurial acumen of their nationals.