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 American companies and stay in the United States for up to five years.
IEP is another pathway for founders to build startup businesses in the U.S., but what are the key differences between the O-1A visa and IEP?
Comparing the IEP Program to the O-1 Visa for 'Aliens of Extraordinary Ability'
The International Entrepreneur Parole program (IEP) allows foreign entrepreneurs to grow their business in the United States. For startup founders who do not yet qualify as an O-1A “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 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 used again in your immigrant petition for the green card process.
USCIS published a detailed list of documents to satisfy the requirements for IEP, linked here.
What are the requirements of the 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.
- 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?
The O-1A is a popular startup visa for founders. To qualify, you must have received a major, internationally-recognized award, such as a Nobel Prize, or you meet at least three 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
IEP and O-1 side-by-side comparison
Comparing the O-1 to IEP
How do you get an 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 in three year increments. To get an extension, you must still qualify for the O-1 visa. Since the O-1 visa is based on past accomplishments, most O-1 visa holders continue to qualify.
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.
Who can you work for in the U.S. on 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.
Immigration law can be difficult to navigate on your own. When you work with us, you're matched with a qualified immigration attorney and supporting immigration team to guide you through the process. Whether you go with the O-1 or IEP, we'll be by your side!
Get started today.