USCIS Raises Investment Thresholds for International Entrepreneur Rule to Boost High-Potential Startups

The US Citizenship and Immigration Services (USCIS) will implement new investment and revenue thresholds under the International Entrepreneur Rule starting October 1. This rule, established in 2017, allows the Department of Homeland Security to use its parole authority to grant a period of authorized stay to noncitizen entrepreneurs on a case-by-case basis.

To qualify, these entrepreneurs must demonstrate that their startup has the potential for rapid growth and job creation, thereby providing a significant public benefit. If granted parole, the entrepreneur would be permitted to work for their startup, and their spouse, if also granted parole, would be eligible to apply for employment authorization in the United States.

Key Changes

From October 1, while the application fee will remain unchanged, the threshold amounts for investment and revenue will increase. For an initial application, entrepreneurs must show that their startup has substantial potential for rapid growth and job creation by securing at least $311,071 in qualified investments from qualifying investors, up from the current threshold of $264,147. Alternatively, they can show at least $124,429 in qualified government awards or grants, an increase from the current $105,659. If the entrepreneur only partially meets these investment or award criteria, they can provide alternative reliable and compelling evidence of their startup’s substantial potential for growth and job creation.

For a second authorized stay under the International Entrepreneur Rule, the requirements are also increasing. Entrepreneurs must demonstrate that their startup has received at least $622,142 in qualified investments or government grants, up from the current $528,293, created at least five qualified jobs, or achieved an annual revenue of at least $622,142, again up from the current $528,293, with an average annual revenue growth of at least 20 percent.

The USCIS defines a “qualified investor” as an individual or organization with a significant investment history in successful startups. Over the past five years, these investors must have invested at least $746,571 in startups for equity or convertible securities, up from the current $633,952. Additionally, at least two of these startups must have each created five qualified jobs or generated $622,142 in revenue, again up from the current $528,293, with an average annual growth of 20 percent.

Detailed Requirements and Implications

The adjustments in threshold amounts reflect the changing economic environment and aim to ensure that only the most promising startups and entrepreneurs benefit from the program. By increasing the investment and revenue thresholds, USCIS intends to attract high-potential ventures that can contribute significantly to the U.S. economy.

For an initial parole application, the requirement of $311,071 in qualified investments means that entrepreneurs need to seek more substantial backing from investors. This could drive a more competitive environment where only startups with robust business models and growth potential can secure the necessary funds. Alternatively, the requirement of $124,429 in government awards or grants signifies that entrepreneurs might need to demonstrate strong innovative capabilities and the potential for public benefit to gain governmental support.

For entrepreneurs seeking to extend their stay under the rule, the increased thresholds of $622,142 in investments or revenue underline the importance of scaling their operations. Meeting these criteria involves not just securing additional funding but also achieving significant milestones in job creation and revenue growth. The expectation of five qualified jobs created or achieving substantial revenue growth is intended to ensure that the startups have a tangible impact on the U.S. labor market and economy.

Furthermore, the definition of a “qualified investor” now necessitates a higher level of past investment in startups. The threshold of $746,571 in investments over the past five years ensures that the investors backing these entrepreneurs have a proven track record of supporting successful ventures. This criterion helps maintain a high standard of investment quality and aligns with the overall goal of fostering startups with the highest potential for success and economic contribution.

Impact on Entrepreneurs and Startups

The revised thresholds pose both challenges and opportunities for entrepreneurs. On one hand, higher investment and revenue requirements might limit access to the program for some early-stage startups that are still in the process of securing significant funding. However, for those that can meet the new criteria, the program offers a valuable opportunity to grow their business in the U.S. market, access a diverse pool of resources, and contribute to economic development.

For investors, the changes mean that they need to be more selective in their investments, focusing on startups with clear potential for substantial growth and impact. This could lead to a more vibrant and competitive startup ecosystem, as investors and entrepreneurs alike strive to meet the elevated standards.

The changes to the International Entrepreneur Rule by USCIS reflect a strategic move to enhance the quality and impact of the startups that benefit from the program. By raising the investment and revenue thresholds, the rule aims to attract high-potential ventures that can drive economic growth and job creation in the United States. While these adjustments may present new challenges, they also set the stage for a more dynamic and competitive entrepreneurial landscape, ultimately benefiting both the U.S. economy and the global startup ecosystem.