In November 2014, President Barack Obama directed the Department of Homeland Security to undertake a set of administrative initiatives on immigration in the absence of congressional action on statutory immigration reform. The headline initiative was to try and protect the undocumented parents of U.S. citizen children from deportation, but several other directives were aimed at making the legal immigration system more responsive to highly skilled immigrants and entrepreneurs. In a flurry of activity as this administration comes to a close, a rule to allow “parole” of entrepreneurs into the United States was finalized, and the Department of Homeland Security issued a precedent decision setting a new standard for determining when highly skilled immigrants should be granted green cards “in the national interest.”
The entrepreneur parole rule, finalized Tuesday, will not take effect for 180 days. The parole rule uses authority granted by Congress to the secretary of Homeland Security to parole any foreign national into the United States—that is, to allow that person into the United States without a visa or green card. The secretary may do so “on a case-by-case basis, for urgent humanitarian reasons or for significant public benefit.” The new regulations provide one way for applicants to demonstrate that being allowed into the United States would be of “significant public benefit.” Generally, the grant of parole under this rule requires a newly formed business in which a foreign national is a key entrepreneur, and that meets one of three criteria demonstrating its growth potential. The entrepreneur may demonstrate that the business has received at least $250,000 in venture capital investment; or that it has received at least $100,000 in government grants; or that it can otherwise demonstrate potential for rapid growth and employment of U.S. citizens.
The new regulation represents a first step on a path to legal status for some foreign-born entrepreneurs. It is a major improvement to visa options currently available, which are not designed with entrepreneurs in mind. Unable to found their businesses in the United States, foreign-born entrepreneurs have to create their businesses outside the United States, which is a lost opportunity for job creation here. The two significant drawbacks of this regulation are that it will not become final until June (and so might be cancelled by the incoming administration), and it is by definition not a visa or a green card—only temporary permission to enter the United States and found a business.
The Department of Homeland Security also issued a new precedent decision to make it clearer how entrepreneurs can qualify for green cards by showing that their immigration is “in the national interest.” Since 1990, immigrants who have a graduate-level degree or who have “exceptional ability” in the arts, sciences or business have generally needed to be sponsored to immigrate by an employer through a process called labor certification. These highly skilled immigrants can self-sponsor without a labor certification, however, if they can demonstrate that their immigration would be “in the national interest.” The precedent decision, announced Dec. 27, 2016, is called Matter of Dhanasar (https://www.justice.gov/eoir/page/file/920996/download). The Dhanasar decision introduced a new framework used to determine immigrant petitions that request these self-sponsored national interest waivers (NIWs).
The Dhanasar framework requires successful petitioners to demonstrate that:
- The foreign national’s proposed endeavor in the United States has both substantial merit and national importance.
- The foreign national is well positioned to advance the proposed endeavor.
- On balance, it would be beneficial to the United States to waive the requirements of the labor certification process, and thus the requirement of a job offer from an employer sponsor.
Dhanasar’s first prong examines the merit and national importance of the specific endeavor the foreign national proposes to undertake upon immigrating to the United States, and explicitly states that the endeavor’s merit may be demonstrated in areas such as business, entrepreneurialism or culture, and not just in science or technology. This includes entrepreneurs whose proposed endeavors have the potential to grow employment of U.S. workers.
The second prong, requiring demonstration that the foreign national is “well positioned to advance the proposed endeavor,” gives the USCIS the flexibility to evaluate highly varied evidence of a prospective immigrant’s resources, skills, and opportunities. The decision explicitly does not require petitioners to demonstrate that their endeavors are going to succeed, but only that they have significant potential to succeed. Given that entrepreneurial endeavors may fail, or may succeed in ways their founders did not anticipate, this flexibility is important.
Dhanasar’s third prong emphasizes the broad discretion the adjudicator has to identify and promote benefits to the national interest. Specifically, the adjudicator may evaluate factors such as whether, in light of the nature of the foreign national’s qualifications or proposed endeavor, it would be impractical either for the foreign national to secure a job offer or for the petitioner to obtain a labor certification; and whether, even assuming that other qualified U.S. workers are available, the United States would still benefit from the foreign national’s contributions.
Considered together, the new entrepreneur rule and the Dhanasar decision create a smoother path to residency for entrepreneurs who demonstrate that their new businesses represent beneficial contributions to the interests of the United States. Given that immigrants are significantly more likely to be entrepreneurs than the native born, according to a study released last week by the Small Business Administration, it serves our national interest to provide a path to legal and permanent residence for any immigrant who wants to start a business and employ workers in the United States. It remains to be seen whether the new administration will try to reverse these initiatives over the objection of venture capitalists, startup incubators, and universities looking to attract entrepreneurs from abroad to found their businesses here in the United States.
Reprinted with permission from the January 17, 2017 edition of the The Legal Intelligencer© 2017 ALM Media Properties, LLC. All rights reserved.
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