The International Entrepreneur Parole Rule (IEP) is here to stay! The Department of Homeland Security adopted the IEP in early 2017. The rule was put on hold by the Trump Administration, but it was never actually removed. With support from the Biden Administration, the IEP will remain an option for foreign founders and entrepreneurs to build their companies in the U.S.
IEP is another pathway for founders to build businesses in the U.S., but what are the key differences between the O-1 and IEP?
On Demand Q&A Session about the IEP
Comparing the IEP Program to the O-1 Visa for 'Aliens of Extraordinary Ability'
The International Entrepreneur Parole (IEP) program allows foreign entrepreneurs to grow their startups in the U.S. For startup founders who do not yet qualify as an O-1 “Alien of Extraordinary Ability”, the IEP program is an alternative option for U.S. work authorization.
However, IEP has several limitations, including:
- Approval under the IEP program is discretionary.
- You can only remain in the U.S. for a maximum of 5 years.
- Initial IEP validity is only for 2.5 years, and the 2.5 year extension is not guaranteed.
- Under IEP, you are granted entry into the U.S. as a “Parolee”. “Parolee” is not a status, and the Department of Homeland Security has the discretion to terminate or revoke parole.
- You cannot change from IEP to a different status directly from within the U.S. (i.e., if you later want to switch from IEP to O-1, you must depart the U.S. before you can activate the O-1).
- IEP does not provide a direct path to permanent residency.
Generally, if you are a strong candidate for the O-1, the O-1 allows you more flexibility and it is a better option compared to IEP. Benefits of the O-1 include:
- The O-1 provides initial status for up to 3 years, and you are then eligible for indefinite extensions.
- Under USCIS’ deference policy to prior approvals, there is a strong likelihood that the O-1 extension will be approved if the material facts and parties (i.e. information about you and your company) have not changed.
- If you are in valid O-1 status, you may have the option to later change to a different status without leaving the U.S.
- A significant portion of the O-1 petition may be reused in your immigrant petition for the green card process.
USCIS published a detailed list of documents to satisfy the requirements for IEP, linked here: https://www.uscis.gov/sites/default/files/document/forms/i-941instr.pdf
Comparing the O-1 to IEP
What are the requirements of IEP?
You must meet all 3 requirements below and provide supporting documents for all 3 requirements.
- Formation of new startup entity. You must have established a U.S. startup within 5 years before the IEP application. The U.S. startup has lawfully done business since its creation and has substantial potential for rapid growth and job creation.
- Supporting documents to show that your company meets the definition of a startup may include organizational documents such as articles of incorporation, tax records, and financial records. See page 7 for more examples.
- You are an entrepreneur. You must establish that:
- You have at least 10% ownership interest
- Supporting documents to show your ownership stake may include organizational documents such as articles of incorporation, cap table, and equity certificates. See page 7 for additional examples.
- You have an active and central role in the operations and future growth of the startup. Your knowledge, skills, or experience would substantially assist the startup in conducting and growing its business in the U.S.
- Supporting documents to show you have an active and central role may include letters from investors, newspaper articles, degrees, patents, a position description of your role, and others. See page 7 for a full list of examples linked here.
- You have at least 10% ownership interest
- Significant U.S. capital investment or government funding. Either:
- Within 18 months before filing the application, your startup must have received a capital investment of at least $250,000 from one or more qualified U.S. investors with a history of substantial investment in successful startup entities (such as venture capital firms, angel investors, or startup accelerators); or
- Within 18 months before filing the application, your startup must have received at least $100,000 in grants or awards from one or more qualifying U.S. federal, state, or local government entities; or
- If you only partially satisfy the funding criteria, you may provide additional compelling evidence of the startup’s substantial potential for rapid growth and job creation.
- Supporting documents to show that the investment funds you have received came from a qualified investor may include organizational documents, proof that the investor is a U.S. citizen or lawful permanent resident, and evidence that the investor has made investments that meet a value threshold and those investments generated jobs or revenue. See page 8 for a full explanation of the specific requirements, and they are very specific!
What are the requirements of the O-1?
You received a major, internationally-recognized award, such as a Nobel Prize, or you meet at least 3 of the following:
- Receipt of nationally or internationally recognized prizes or awards for excellence in the field of endeavor;
- Membership in associations in the field which require outstanding achievements;
- Published material in professional or major trade publications, newspapers or other major media about you or your work;
- Original scientific, scholarly, or business-related contributions of major significance in the field;
- Authorship of scholarly articles in professional journals or other major media in the field;
- A high salary or other remuneration for services;
- Participation on a panel, or individually, as a judge of the work of others in the field.
- Employment in a critical or essential capacity for organizations that have a distinguished reputation
How long is the initial stay of IEP and the O-1?
Initial IEP is up to 2.5 years
Initial O-1 status is up to 3 years
How long is the extension of the IEP and O-1?
An additional 2.5 years of parole may be available if you demonstrate that:
- The business continues to operate;
- You retain at least a 5% ownership interest and continues to play a central role in the business; and
- The business has either:
- Created at least five qualifying jobs; or
- Received at least $500,000 in qualifying investments, government grants or awards; or
- Generated at least $500,000 in U.S. revenue and averaged 20 percent annual growth.
O-1 status can be extended indefinitely.
What is the maximum stay of IEP and O-1?
Can I file premium processing for IEP and O-1?
No. IEP is not eligible for premium processing.
Note: IEP is a relatively new program, and USCIS has not published the current processing timeline for this application.
Yes, O-1 petitions are eligible for premium processing. Once the petition is filed, you can receive a final decision from USCIS within 15 days, unless a Request For Evidence is issued.
What is the approval data for IEP and the O-1?
IEP is granted on a discretionary basis. IEP is a relatively new program, and national data on approval is currently not widely available.
Note: Based on information provided by USCIS, "As of February 10, 2020, USCIS had received a total of 28 IEP applications. Of these, 1 was approved, 22 were denied, 3 were withdrawn, and 2 were pending.
The O-1 is granted to Aliens of Extraordinary Ability. Based on information provided by USCIS, in 2020, the O-1 had an approval rate of 89.7% nationally.
Legalpad’s O-1 approval rate for startup founders is over 95%.
What is the Status in the U.S. for IEP and the O-1?
Admitted as “Parolee”. Parolee is not an immigration status, but rather a discretionary and temporary permission to enter and remain in the U.S.
Who can you work for in the U.S. IEP and the O-1?
Under IEP, you can only work for your startup.
If the O-1 was sponsored by a company, you can only work for the company that sponsored your O-1.
How many people within the same startup can apply for IEP and the O-1?
IEP may be granted for up to 3 entrepreneurs per startup.
Can dependents come to the U.S. IEP or the O-1?
Spouses and eligible children are also eligible for parole.
Spouse and eligible children can obtain O-3 dependent status.
Can a dependent spouse work IEP or the O-1?
Yes, the spouse can apply for work authorization once physically present in the U.S. as a Parolee.
No, O-3 spouses cannot work.
Can dependent children work IEP or the O-1?
No, children are not eligible for work authorization.
No, O-3 children are not eligible for work authorization.