IEP vs. Startup Visa: Understanding the Differences
Dear Sophie: Navigating Startup Visas and Entrepreneur Parole
This is another installment of “Dear Sophie,” a resource dedicated to addressing immigration concerns specifically related to employment within the technology sector.
Sophie Alcorn, a Silicon Valley-based immigration lawyer, emphasizes the importance of these inquiries. She states that these questions are instrumental in disseminating information that empowers individuals globally to overcome geographical limitations and achieve their aspirations.
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Dear Sophie,
Could you clarify the distinctions between International Entrepreneur Parole and the recently proposed startup visa?
What is your assessment of the likelihood of the startup visa being enacted? If it does come to fruition, what is a reasonable timeframe to anticipate?
— Financial Founder
Dear Financial,
Thank you for reaching out with these important questions. As you are probably aware, U.S. Representative Zoe Lofgren (D-CA) has put forward the Let Immigrants Kickstart Employment (LIKE) Act.
This legislation proposes the creation of both a startup visa and a pathway to a startup green card.
The LIKE Act and NVCA Support
Jeff Farrah, the general counsel for the National Venture Capital Association (NVCA), recently joined me on my podcast to discuss the LIKE Act in detail.
The NVCA is actively engaged in garnering support for the LIKE Act within the U.S. Capitol.
Current Congressional Priorities
However, the current focus of Congress is directed towards the budget reconciliation and infrastructure bills.
Consequently, the LIKE Act has been temporarily placed on hold as these other legislative matters take precedence.
The timing surrounding the potential enactment of the LIKE Act remains, therefore, uncertain.
Supporting the LIKE Act: A Guide to Advocacy
According to Farrah, several actions can be taken to help the LIKE Act progress towards becoming legislation and establishing an official startup visa within the United States. Individuals residing or employed within Representative Anna Eshoo’s congressional district, encompassing a significant portion of Silicon Valley, should consider writing to her.
Expressing gratitude for her introduction of the LIKE Act and sharing personal experiences can be impactful. For those living or working outside of this district, contacting their own congressional representatives is crucial.
Share your narrative and articulate the importance of a startup visa and a pathway to permanent residency for founders. It is vital to maintain honesty regarding citizenship status; misrepresentation could result in a permanent ban from the U.S.
Expanding the Circle of Support
Encourage both immigrant and U.S. citizen friends to also write to their respective congressional representatives. Furthermore, prospective foreign entrepreneurs seeking to establish businesses in the U.S. can directly contact the representative of the district where they intend to locate their venture.
This proactive outreach can demonstrate the broad support for fostering innovation and job creation. Let's now delve into a comparison between the provisions of the proposed LIKE Act and the existing programs available to startup founders.
Comparing International Entrepreneur Parole and the LIKE ActSimilar to a temporary non-immigrant visa, International Entrepreneur Parole (IEP) permits individuals to reside in the United States for a limited duration. However, it’s crucial to understand that IEP is distinct from a visa, resulting in differing procedures for both its issuance and any subsequent extensions.
The criteria for eligibility under IEP and the startup visa proposed by Representative Lofgren share considerable overlap. Nevertheless, the proposed visa is anticipated to be more readily obtainable and renewable. Furthermore, it would establish a clear pathway to obtaining a green card, alongside a new visa category specifically designed for employees in the early stages of a company’s development.
Currently, IEP allows for up to three co-founders from a single startup to qualify. Recently, U.S. Citizenship and Immigration Services (USCIS) announced adjustments to the minimum financial requirements, accounting for inflation. These revised amounts will become effective on October 1st.
Both IEP and the proposed startup visa necessitate the following:
- A startup founder must possess a minimum of 10% ownership within the startup entity.
- The founder is expected to fulfill a central and actively involved role in the startup’s management.
- Within the 18 months preceding the application, the startup must have secured at least $250,000 in qualifying investments, as stipulated by the LIKE Act, or $264,147 for IEP (reflecting inflation adjustments).
- Alternatively, within the same 18-month timeframe, the startup must have been awarded at least $100,000 in government grants or awards under the LIKE Act, or $105,659 for IEP (adjusted for inflation).
- For IEP applicants specifically, the startup can demonstrate “other reliable and compelling evidence” showcasing its significant potential for rapid expansion and job creation.
The renewal process for both IEP and the proposed startup visa requires:
- A startup founder must maintain at least a 5% ownership stake in the startup.
- The founder must continue to actively manage and play a central role within the startup.
- And one of the following conditions must be met:
- The startup has received at least $500,000 in investments, government awards, or grants during the individual’s stay in the U.S., as per the LIKE Act, or $633,952 for IEP (adjusted for inflation).
- Or, the startup has generated a minimum of five full-time, qualified employment positions.
- Or, the startup has achieved at least $500,000 in annual revenue within the United States, coupled with an average annual revenue growth of 20% for the LIKE Act, or $528,293 for IEP (adjusted for inflation).
Both IEP and the proposed startup visa allow accompanying spouses and children to reside in the U.S. Furthermore, a spouse is eligible to apply for employment authorization. IEP currently limits applications to a maximum of three co-founders per startup. Conversely, the proposed LIKE Act does not impose a limit on the number of co-founders from a single startup, provided each individual satisfies the ownership requirement.
Representative Lofgren’s proposed legislation also introduces a new visa program tailored for essential employees. Individuals without an ownership stake, or who do not meet the ownership criteria, may still qualify for a distinct employee startup visa, contingent upon the number of full-time U.S. employees the startup employs.
The IEP Process and Potential Alternatives
Engaging an experienced immigration lawyer to navigate your immigration concerns is consistently recommended. Their expertise can prove invaluable throughout the process.
Should your IEP application receive approval from USCIS, you will be issued a parole document with a 30-month validity period. This document is eligible for a single extension of another 30 months, contingent upon your startup fulfilling the specified extension requirements.
However, it’s crucial to understand that USCIS approval alone doesn’t automatically guarantee you and your family parole. A U.S. Customs and Border Protection (CBP) officer, stationed at a U.S. port of entry, retains the authority to either approve or deny your parole request.
Therefore, thorough preparation with your immigration attorney is essential, anticipating the questions CBP officers may pose. If you and your family are presently within the U.S., a “change of status” option isn’t currently available. Your attorney will likely advise a physical departure from the U.S. and presentation of your parole documents to the CBP officer upon re-entry at a land border.
Alternatively, if you intend to enter the U.S. by air or sea, obtaining a boarding foil – also known as a travel foil – from a U.S. embassy or consulate is necessary. This foil will permit boarding, as you won’t possess a traditional visa stamp in your passport.
In practice, CBP officials often grant entrepreneurs entry under IEP status in annual increments, rather than the full 30-month period. This may necessitate repeating the entry process each year.
The Potential of the LIKE Act
In contrast, the enactment of the LIKE Act would likely result in USCIS processing a startup visa similarly to other visa types. This would allow applicants to apply either from within the U.S. via a change of status application, or while abroad at a U.S. embassy or consulate.
The proposed startup visa would initially be valid for three years, with potential extensions of up to five additional years, dependent on the startup’s job creation and revenue generation. A significant advantage of the proposed legislation is a 60-day grace period for entrepreneurs and essential employees to depart the U.S. after their visa expires – a benefit currently absent from the IEP.
Furthermore, Lofgren’s bill proposes a startup green card that would be exempt from the annual quotas that typically apply to other green card categories. This is particularly important, considering the lengthy wait times – often spanning years or even decades – that many international entrepreneurs currently face for a U.S. green card due to per-country limitations.
Updates regarding the LIKE Act’s progress will be shared here. Please check back for further information.
Best regards,
Sophie
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Please note that the information provided in “Dear Sophie” is for general informational purposes only and does not constitute legal advice. For details regarding the limitations of “Dear Sophie,” please refer to our complete disclaimer. You can reach Sophie directly through Alcorn Immigration Law.
Sophie’s podcast, “Immigration Law for Tech Startups,” is available on all major podcasting platforms. She is currently accepting applications for potential guests!
