International Students: Business Owners Or Employees?

International students in Canada who are interested in starting a business have a variety of resources available to them. For example, the University of British Columbia has hosted events aimed at linking students with entrepreneurs, and programs like the federal Start-Up Visa program can help international students extend their time in Canada after graduation. To start a business in Canada, non-residents must be federally incorporated, and some provinces require residency while others do not. International students with a study permit and off-campus work permit may be able to work for their own company, but they should check the restrictions on their permit and request amendments if necessary.

Characteristics of starting a business as an international student

International students on an F-1 visa in the US can create a business plan and launch their own business, but they are not permitted to run the business after it has been founded

International students on an F-1 visa in the US can create a business plan and launch their own business. However, they are prohibited from running the business or engaging in day-to-day operations after it has been founded. This means that F-1 visa holders cannot work for their own company or receive compensation for their efforts.

To comply with visa rules, F-1 visa holders can form a partnership and have another partner run the business while they invest in the company. They can be limited partners, contributing to the capital of the business without participating in day-to-day operations. Alternatively, F-1 visa holders can invest in their company and hand it over to a capable team they trust to run the business.

To work in the US after graduation, F-1 visa holders can apply for Optional Practical Training (OPT), which is considered valid employment authorization. However, OPT must be directly associated with the applicant's main field of study and can only be obtained after the first year of academic study. F-1 students who have graduated with a degree in a STEM field may be eligible for a 24-month extension of their authorized period of post-completion OPT if their degree is listed on the Department of Homeland Security STEM-Designated Degree Program List.

It is important to note that accessing capital for a business as an international student may be more difficult than expected, as some US angel investors and venture capital firms may be hesitant to invest in a startup with an international student as a lead founder due to their visa status. Additionally, as a non-citizen, exiting a startup in the US can be daunting, and selling a business does not guarantee the ability to stay in the country.

F-1 students in the US cannot be self-employed and work in their own company, but they can form a partnership and have the other partner run the business while they invest in the company

International students in the US on an F-1 visa can create a business plan and launch their own business. However, they are prohibited from engaging in business and running their company after it has been founded. F-1 students cannot be self-employed and work in their own company. This means they cannot conduct business activities or receive compensation or a salary.

However, F-1 visa holders can invest in their own company and receive dividends. They can also form a partnership and have the other partner run the business while they invest in the company. This can be done by setting up a limited liability partnership (LLP), where the F-1 student is a limited partner and the other partner is a general partner. Limited partners contribute capital but cannot participate in day-to-day operations.

To be able to work for their business, F-1 students must apply for Optional Practical Training (OPT) authorization, which is considered valid employment authorization as long as the work is related to their field of study. F-1 students who have graduated with a degree in a STEM field may be eligible for a 24-month extension of their post-completion OPT.

It is important to note that US immigration and visa laws can change, so international students should stay up-to-date on the latest rules and regulations. Additionally, maintaining compliance with all laws and regulations is crucial when starting a business as an F-1 visa holder.

International students in Canada can start their own business, but only after they have started their study program

International students in Canada can start their own business, but there are several important considerations to keep in mind. Firstly, it is crucial to understand the eligibility requirements for working in Canada as an international student, even if it is for self-employment. Working for yourself is recognised as ''working off-campus'' by the Government of Canada, and you can only commence this type of work after starting your study program.

To be able to work off-campus, including for your own company, you must be a full-time student at a designated learning institution (DLI). During regular school terms, self-employed students are permitted to work on their business for up to 24 hours per week. It is important to note that most study permits have conditions that restrict your ability to work while studying, but they do allow for some employment opportunities. However, starting a business may not be explicitly covered under the typical work conditions of a study permit, and you may need to apply for additional authorisation, such as a work permit, to ensure your business operates legally.

If you are still in your home country awaiting a response on your student visa application, it is advisable to seek legal advice regarding the specific details of operating an online business in Canada. While international students cannot work more than 20 hours per week for a Canadian company, the rules may differ if your business is registered and operated remotely from your home country. In such cases, revenue may not be treated as Canadian income, and you may not breach Visa rules.

To start a business in Canada, you will need to choose a business structure and register with the appropriate provincial or federal authorities. Common structures include sole proprietorship, partnership, and corporation, each with its own legal and financial implications. As a business owner, you will also need to understand your tax obligations, including registering for a Business Number (BN) and potentially charging Goods and Services Tax (GST)/Harmonized Sales Tax (HST).

There are various resources available to support international student entrepreneurs in Canada, including incubators and accelerators, Small Business Enterprise Centres, and networking events. These programs offer mentorship, funding opportunities, workshops, and advisory services to help new businesses navigate the complex global trade environment.

International students in the US can apply for Optional Practical Training (OPT) which is considered a valid employment authorization for working as long as the employment is related to their field of study

International students in the US on an F-1 visa are not permitted to run a business after it has been founded. However, they can apply for Optional Practical Training (OPT), which allows them to work in the US for up to 12 months, as long as the employment is related to their field of study. OPT can be used during a student's program, such as during summer break, and this is called pre-completion OPT. It can be used to gain work experience in the student's field of study, but a job offer from a US employer must be obtained before starting work.

F-1 students who have graduated with a degree in a STEM field may be eligible for a 24-month extension of their authorized period of post-completion OPT if their degree is listed on the Department of Homeland Security STEM-Designated Degree Program List. The OPT year can be used to gain work experience after graduation, but once it has ended, the student may not continue to work for their business unless they qualify for and receive a non-immigrant or immigrant status that authorizes them to continue working in the US.

International students on F-1 visas can also invest in their own company and receive dividends. They can form a partnership and have another partner run the business while they invest in the company, which helps them comply with F-1 visa rules as they are not working for the business.

International students in the US can access funding for their business, but many US angel investors and venture capital firms may be hesitant to invest in a startup with an international student as one of the founders

International students in the US on an F-1 visa can start a business, but they cannot be found "engaging in business". This means that they can create a business plan and launch a business, but they cannot run the business or be compensated for their work. To get around this, F-1 visa holders can apply for Optional Practical Training (OPT), which allows them to work as long as the work is related to their field of study. They can also invest in their company and hand it over to a capable team.

F-1 visa holders can also use personal savings, loans from family and friends, or venture capitalist funding to start their business. However, they may face challenges in accessing funding from US angel investors or venture capital firms due to their international student status. This is because international students on F-1 visas cannot work more than 20 hours a week, and their employment must be related to their major area of study. Additionally, there may be concerns about the student's ability to stay in the country after graduation or about the complexity of international transactions.

To increase their chances of receiving funding, international students should consider having a co-founder who is an American citizen, green card holder, or has work authorization. They can also look into alternative visa options, such as the O-1 or IEP visas, which may provide more flexibility in terms of work authorization.

Despite these challenges, international students in the US have been found to contribute significantly to the creation of new startups. A study by Beine et al. (2024) found that international master's graduates increased the rate of highly valuable and innovative startups, with a significant boost to startups raising $25 million or more in capital within the first three years of creation. This effect was even more significant than simply adding startups, as many startups do not succeed.

Frequently asked questions