International Entrepreneur Rule (IER): A Comprehensive Guide for Startup Founders

Donald Trump recently announced a new visa program, ‘Gold Card’ that he describes as “somewhat like a green card, but at a higher level of sophistication”. The option has a potential pathway to US citizenship for $5 million. 

But let’s be honest - not everyone has $5 million just casually sitting in their bank accounts.

Hence, young international entrepreneurs need to find a cheaper way to get legal permission to build a startup in the US. 

The USA doesn't have a dedicated startup visa, forcing entrepreneurs to use categories like H-1B, L-1, or O-1 visas, which are poorly designed for founders' needs. Thus, the International Entrepreneur Rule (IER) was created to address this problem.

Here's how the IER has evolved over the years:

Not many entrepreneurs apply for IER, as they remain unaware of the program or hesitant due to its complex requirements. This guide is especially written to bridge this gap and help international founders with available US entry options, including IER and O-1 visa. 

You'll learn the exact eligibility requirements, application steps, benefits, limitations, and practical advice on whether IER makes sense for your situation.

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What is the International Entrepreneur Rule?

The International Entrepreneur Rule (IER) is a Department of Homeland Security program that allows foreign entrepreneurs to enter and remain in the United States for up to five years to start and grow their businesses. 

According to the United States Citizenship and Immigration Services (USCIS), the IER grants "parole" status, not a visa, to qualifying entrepreneurs demonstrating substantial potential for rapid business growth, job creation, and innovation.

Since this is a parole status different than what a visa is, it's important to understand the key differences:

International Entrepreneur Rule Key Features:

• It's parole, not a visa. 
• It allows qualifying entrepreneurs up to 5 years total in the US (initial 2.5 years with one renewal).
• Final entry decisions rest with Customs and Border Protection officers.
• IER does not provide a direct path to permanent residence.

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Eligibility Requirements for IER

To qualify for the IER, founders must meet specific criteria designed to identify startups with high growth potential. Meeting these requirements proves you have a legitimate business that deserves this special immigration consideration.

i) Ownership Requirements

Here is how the ownership structure of your startup should look when you are applying for IER.

• You must own at least 10% of the startup at the time of application.
• Your US entity must be less than 5 years old from the date of formation.
• The company must have received qualifying investments or grants within 18 months before filing.
• You must have an active and central role in the operations of the business, which includes managerial positions such as CEO, CFO, etc.

ii) Funding Requirements

The IER requires you to show significant funding to prove your business is viable. You must meet one of the funding thresholds shown in the table below, which include investments from qualified US investors, government grants, or a combination of other pieces of evidence.

Note- Qualified U.S. investors include individuals who have made at least $105,659 in investments in startups that have created at least 5 qualified jobs or generated at least $528,293 in revenue with an average annualized revenue growth of 20% or more.

iii) Company Growth Metrics

Beyond funding and grants, the USCIS evaluates business potential through the following-

• Job creation capacity for the US economy(existing and projected positions)
• Growth rate of revenue- how much revenue percentage increase takes place every year.
• Annual projected revenue
• Patent applications or grants
• Market standing or competitiveness reports- how well your startup performs under the competition.
• Letter of recommendation from relevant industry associations or experts.

iv) Required Documents

The seven most critical documents for your IER application:

1. Form I-941, Application for Entrepreneur Parole
2. Business formation documents proving company age and structure
3. Evidence of at least 10% ownership (cap table, stock certificates)
4. Proof of qualifying investments or government funding
5. Comprehensive business plan that you have laid out to set in the USA with 5-year projections.
6. Evidence of active business operations in the United States
7. Documentation of intellectual property or unique business advantage

v) Special Considerations

Depending on your business type, here are the specific elements that the USCIS will evaluate before approving your application status.

Remember that USCIS officers are looking for evidence that your business has significant potential to grow rapidly and create jobs in the United States. Your application should demonstrate how your venture meets these objectives.

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How to Apply for IER?

Applying for the International Entrepreneur Rule involves a detailed process that requires careful planning and thorough documentation. Here's how to navigate each step:

Step 1: Prepare your business documentation

Start by gathering your business formation documents showing establishment within the past five years, proof of minimum 10% ownership, and evidence of qualifying investments or grants received in the last 18 months. 

Also, prepare your comprehensive business plan demonstrating growth potential and job creation.

Step 2: Complete the required forms

Fill out Form I-941 (Application for Entrepreneur Parole) for each qualifying entrepreneur in your startup. This form requires detailed information about your business structure, its funding sources and amounts, your qualifying ownership stake, and your specific role within the company. 

Step 3: Pay the application fees

Submit the $1,200 filing fee plus the $85 biometric services fee per applicant. These fees are non-refundable, regardless of the application outcome. 

Payment can be made by check, money order, or credit card using Form G-1450. Ensure payment details are accurate to prevent application rejection.

Step 4: Submit your documents

Send your complete application with all supporting documents to the USCIS address on the form instructions. Your package should include all the documents discussed in the section above.

Step 5: Post-submission process

Wait 6-12 months for processing, as there is no premium processing available for IER applications. If approved, you'll need to get a boarding foil from your local US embassy before flying. 

Here's what to expect after submission:

Important Note-
USCIS approval of your IER petition doesn't get you into the US alone, as it's parole, the U.S. Customs and Border Patrol (CBP) border guard has the final say. Even with approval, CBP officers make the final determination at your port of entry.

The entire process requires careful planning, particularly regarding timing and documentation. Once paroled into the U.S., you'll have 2.5 years to grow your business before potentially applying for an extension.

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Benefits of the IER Program

The International Entrepreneur Rule offers several advantages over other U.S. immigration options, especially for founders just starting out. Here are the benefits of EIR:

1. Cost-Effective Entry Option

IER is a cheaper option as compared to O-1 or EB1. The IER costs about $1,285 per person, much less than the $7,000-$11,000 you'd typically spend on an O-1 visa. For startup founders watching their budget, this price difference matters a lot.

2. Clear Qualification Requirements

The IER has clear definitions and little subjectivity about how 'outstanding' you are. Unlike the O-1 visa, where you need to convince officials you're "extraordinary," the IER looks at simple numbers and facts like:

• How much money you've raised
• What percentage of the company do you own
• How old your company is
• How many jobs you might create

3. Family Benefits

Dependent spouses and children can work (as opposed to O-1 dependents). This is a game-changer for many entrepreneurs because:

• Your spouse can get a work permit and earn income
• They can take a job with any company in the U.S.
• Your family won't rely solely on your startup income
• Both you and your partner can build careers in America
• Your family can better integrate into American life

4. Strategic Stepping Stone

It might be a good thing to use in order to spend time in the US and get your O-1 profile credentials up to the mark. Think of the IER as a 2.5-year opportunity to:

• Get your business up and running in US markets
• Make important connections in your industry
• Speak at conferences or events
• Win awards or recognition
• Get media coverage
• Build the impressive resume you'll need for an O-1 visa later

The IER also lets you do everything a normal business owner would do - open bank accounts, sign office leases, hire American workers, and fully operate your company in the world's largest market.

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Limitations of IER

While the IER offers a pathway to enter the U.S., it comes with significant restrictions that entrepreneurs must understand before applying.

1. No Path to Permanent Residency

Parole has no immigration intent, and there is no direct path to immigration or permanent residency. It means that you'll eventually need to qualify for a different visa category or green card program if you want to stay permanently. Unlike H-1B or L-1 visas that can lead to green cards, the IER is explicitly temporary.

2. Limited Duration

IER gives you 2.5 years + 2.5 years; after that, you must either leave the US or transition to another visa. This five-year maximum creates a tight timeline to grow your business and establish qualifications for other immigration options. Once your renewal period ends, no further extensions will be available.

3. Status Limitations

You cannot do a 'Change of Status' whilst in the US as a parolee. If you decide to pursue another visa category, you must leave the U.S. and apply from abroad. This adds complexity, expense, and uncertainty to your immigration journey, as you'll need to factor in time outside the country.

4. Daily Challenges with Parole Status

Here is a table to understand the daily challenges you can face when you visit and work in the country with parole status.

These limitations can create unexpected obstacles in establishing and growing your business in the United States. Before pursuing the IER path, carefully consider how these restrictions might affect your specific situation and business goals. 

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IER vs O-1 Visa Comparison

The O-1 visa, officially called the "O-1A visa for Extraordinary Ability," is designed for individuals who have demonstrated extraordinary achievement in their field.

Let us understand the difference between both and how they differ.

O-1 is superior as it's a visa with real standing. Y Combinator (YC) founders and other venture-backed entrepreneurs typically develop the kind of profile that qualifies for O-1 status through their fundraising activities, media coverage, and industry recognition. 

While the IER might seem more accessible initially, successful founders should carefully consider the long-term implications of their immigration choice. The O-1 offers a pathway to permanent residency, stronger legal standing, and unlimited extensions.

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Which Option Should You Choose between IER and O-1?

Your decision to take the immigration path depends on several key factors:

• Your current achievements and recognition in your field
• Your business stage and funding situation
• Whether your spouse needs to work in the US
• How quickly you need to enter the country
• Your long-term plans for staying in the US

We've analyzed the most common founder scenarios to help guide your decision-making process:

Family needs can make a big difference in your choice. If your spouse needs to work, the IER is better since it allows work permits for spouses. The O-1 doesn't let spouses work. 

But if you're considering staying in the US permanently, the O-1 creates a better foundation for getting a green card. IER is an excellent option if you don't yet qualify for an O-1 visa. Many founders use this strategy: start with IER to get into the US, build up their achievements and recognition while growing their business, then switch to an O-1 visa when they've established themselves better.

Before making your final decision, talk to an immigration lawyer who works specifically with startup founders. They can look at your unique situation and help you create the best immigration plan for your business journey.

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Frequently Asked Questions

1. What exactly is the International Entrepreneur Rule (IER), and how does it differ from a traditional visa?

IER is a parole program, not a visa. It allows startup founders to live in the U.S. for up to five years but doesn't grant formal immigration status.

• IER -  Temporary permission based on business potential, requires CBP approval for re-entry.
• Visas (e.g., O-1, L-1A) -  Provide legal status, often longer duration, and stronger protections.

IER lacks a direct path to permanent residency, unlike many visas.

2. How much funding do I need to qualify for IER, and what types of funding are accepted?

You need funding from qualified U.S. sources within 18 months before applying to qualify:-

• Private Investment -  $264,147+ from reputable U.S. investors.
• Government Grants -  $105,659+ from U.S. government entities.
• Alternative -  Partial funding plus evidence of high growth potential and job creation.

3. Can I transition from IER to a green card or other visa status?

No direct path to a green card exists under IER.

• Parole does not imply immigration intent.
• You must switch to a visa like O-1, EB-2 NIW, or EB-5 for permanent residency.
• Changing status from within the U.S. is not possible; you must apply from abroad.

4. How does an IER compare to an O-1 visa regarding cost and requirements?

5. What happens after my initial IER period expires?

IER lasts 2.5 years, with one renewal for a total of 5 years.

• To extend, you must show continued business growth and job creation.
• No additional extensions after 5 years—you must transition to another visa or leave the U.S.
• Switching to an O-1, EB-2 NIW, or EB-5 can provide longer-term residency options.

6. Can my spouse and children work while I'm on IER?

Yes, spouses and children can work under IER, unlike O-1 dependents.

• Spouses can apply for work authorization and take any job.
• Children under 21 can also stay but cannot work.
• This makes IER family-friendly compared to O-1, which does not allow dependent employment.