International Entrepreneur

Effective from October 1, 2021, the International Entrepreneur Rule (IER) offers a much less complex path for those wishing to benefit from the opportunity to work in the USA.

History of the Program

Before the final year of Obama's term, the option for any international entrepreneur to establish a US company was limited to seeing if they were eligible for a temporary work permit visa such as H-1B, L-1, F-1 OPT, O-1, E-1/2, or similar. Unfortunately, many of these visa categories limit what an entrepreneur can do or present qualification barriers that prevent entrepreneurs from meeting the requirements. This led many entrepreneurs to forgo entering the US, causing a loss of talent, job creation, and revenue for the American economy.

To fill this gap, the Obama administration initiated the International Entrepreneur Rule (IER), a special work permit temporary protection program for international entrepreneurs. The program regulations were published on January 17, 2017, and were intended to come into effect later that year. However, the Trump administration postponed the implementation of the program for further regulatory review, and a series of lawsuits caused the program to be suspended during its tenure. Nonetheless, the Biden administration reinstated the IER program and re-published the regulations on September 13, 2021. IER then came into effect on October 1, 2021, and since then, the US Citizenship and Immigration Services (USCIS) has been accepting IER temporary protection applications from international entrepreneurs.

What is the IER Program?

The IER program provides a special Temporary Protected status to any foreign national entrepreneur (non-US citizen or permanent resident) and allows them to physically stay and work in the US for a duration of 2.5 years. The entrepreneur can remain in the US throughout this entire duration, provided they have established a start-up business contributing significant public benefit to the US. Moreover, the entrepreneur must actively participate in the start-up business and demonstrate sufficient minimal capital investment made by "qualified investors."

Start-Up Business

A start-up business must be established within five years from the date the entrepreneur applies for the IER program. The business must have been established within the US during this five-year period. Any business founded outside this five-year duration is not eligible.

Significant Public Benefit

The US start-up business must provide significant public benefit. This can be demonstrated by:

-Documented media coverage of the start-up;

-Documented investments or grants from qualified investors or government agencies;

-Proof of revenue or job creation;

-Press releases of qualified funding;

-Patents obtained for new technologies; and/or

Letters from qualified industry peers known for their expertise regarding the new business and/or advanced technologies or inventions.

Active Participation in the Startup

The entrepreneur's active participation and ownership in the start-up are two different requirements. The active participation element requires proof that the entrepreneur plays a central and active role in the operation, growth, and success of the business. This could include:

A detailed description of the entrepreneur's role in operating the business;

Press releases outlining the entrepreneur's role;

Evidence of the entrepreneur's knowledge, skills, or experience advancing the company, such as degrees, education background, LinkedIn profile, and resume;

Letters from relevant government or investment stakeholders confirming the entrepreneur's qualifications;

Documentary evidence about any technology, patent, or investment linked between the entrepreneur and the start-up business; or

Any relevant evidence establishing the entrepreneur's central and active role in the business.

Ownership

The ownership requirement mandates that at the time of applying for the IER program's Temporary Protection, the entrepreneur must own at least 10% of the start-up business. After the application is approved, this 10% ownership can fluctuate between 5% and 10% during the approved Temporary Protection period of the first 2.5 years. This Temporary Protection period can be extended for another 2.5 years under the IER program for a total duration of five years.

However, for the second 2.5-year period, the entrepreneur's ownership share must not be less than 5% at the time of applying for the Temporary Protection extension. After the Temporary Protection extension is approved, the entrepreneur's ownership share in the start-up business can fall below the 5% ownership share. However, at no time during the second 2.5-year Temporary Protection extension period can the entrepreneur lose all ownership stakes.

Sufficient Minimal Investment

Regarding the sufficient minimal capital investment made into the start-up business by "qualified investors," several types of "qualified investors" exist. These include "US investors with a proven track record of successful investments"; any US local, state, or federal government funding The required minimal investment from “qualified investors” includes various types: US investors with a proven track record of successful investments; funding from any US local, state, or federal government agency; or a combination of both.

A “US investor with a proven track record of successful investments” is one who has previously invested at least $600,000 in multiple startups, with at least two of those startups either creating a minimum of five full-time US jobs or generating $500,000 in annual revenue with a 20% growth rate. Essentially, the US investor should be a well-established US venture capital fund. Please note that the US investor cannot be a family member of the entrepreneur or companies/organizations owned by them. If the US investor is qualified, then they must invest at least $250,000 in the startup.

Additionally, for any US local, state, or federal government agency, this should be a grant or award used for economic development, research and development, or job creation totaling at least $100,000.

If the above totals are less than the required amounts but there is a combination of US investment and government grant, the entrepreneur may still apply for the IER program Temporary Protection under "compelling evidence."

Extension of IER Program for an Additional 2.5 Years

When the 2.5-Year Temporary Protection status is granted, it is given for a period of 2.5 years. If the startup continues to succeed and an extension is necessary, the entrepreneur can apply for an additional 2.5 years. The ownership interest needed for this 2.5-year extension is as specified above. However, the business itself must have received additional funding of $500,000 from “qualified investors; any US local, state, or federal government funding; or a combination of both,” achieved an annual revenue of more than $500,000 with at least a 20% growth rate from year to year, or show a combination of both under "compelling evidence."

Family Members

The entrepreneur’s spouse and minor children are also eligible for Temporary Protection status and will be granted the same duration as the entrepreneur. Moreover, the entrepreneur's spouse can apply for a work permit after being granted Temporary Protection status and entering the US.

This entrepreneur status is not a process for US permanent residency (i.e., a green card) and does not bridge to any other US immigrant or nonimmigrant status.

This process is subject to the discretion of relevant government authorities and may be subject to a comprehensive review by USCIS, and the application can be denied if the agency does not see the requirements for the entrepreneurial role being met.

USCIS examines whether any holder of Temporary Protection has separate funds to sustain their life while managing the startup business. This requires proving that the entrepreneur maintains a household income above 400% of the published US poverty level.

In summary, the IER program offers foreign entrepreneurs the opportunity to live and work in the US while establishing and growing a successful startup, but the required evidence is extensive.

At BRBF Solutions, we conduct one-on-one assessments with startup companies to manage the process. We work with specialist law firms and finance companies. For a detailed evaluation, please contact us.

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