Savanna Hoffman
International students often ask if they can be self-employed or start a business while studying in a foreign country. The answer depends on the country and the type of visa and immigration status. For example, in the United States, F-1 visa holders cannot be employed at an outside job, but they may be able to become self-employed business owners in limited circumstances, such as if their business is related to their degree program and they have the necessary licenses. In the UK, Tier 4/Student visa holders cannot be self-employed or set up a business. International students should carefully research the laws and regulations of their host country to understand the specific requirements and restrictions that may apply to their situation.
Can international students be self-employed?
| Characteristics | Values |
|---|---|
| F-1 Visa (Academic Student) | Allows international students to enter the United States as full-time students at accredited academic institutions. |
| M-1 Visa (Vocational Student) | For students in vocational or non-academic programs, excluding language training. |
| F-1 and M-1 Student Employment | Off-campus employment must be related to the student's area of study and authorized by the Designated School Official and USCIS. |
| F-1 Visa Work Restrictions | F-1 students may not work off-campus during the first academic year but may accept on-campus employment with restrictions. |
| M-1 Visa Work Restrictions | M-1 students may accept off-campus employment in specific cases with prior authorization. |
| International Students in F-1 Status | Generally forbidden from "engaging in business." However, there is no explicit prohibition against establishing a business. |
| F-1 Visa and Self-Employment | F-1 students on OPT may become self-employed in limited circumstances with proper licenses and if the business is related to their field of study. |
| H-1B Visa | Allows students to work for their company after an OPT period. Requires a bachelor's degree or equivalent. |
| UK Tier 4/Student Visa | Prohibits self-employment, setting up a business, or certain roles like professional sports or entertainment. |
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What You'll Learn
International students in the US on an F-1 visa
F-1 students can, however, be self-employed through Optional Practical Training (OPT), which allows them to gain hands-on experience in their field while complying with immigration requirements. To be eligible for OPT self-employment, students must prove they have the proper business licenses and are actively engaged in a business related to their degree program. F-1 students can also explore other visa options, such as the H-1B, E-2, or O-1 visas, to continue working for their company after their OPT period.
It is important to note that all forms of employment in the US, including self-employment, require work authorization. F-1 students must understand the rules and regulations around self-employment to avoid any violations of their visa status. Additionally, F-1 students who are self-employed may be subject to US income tax and should be aware of the tax consequences associated with self-employment.
While F-1 students can own a business, they may need to repatriate profits to an overseas bank account in the company's name to avoid violating their visa status. This way, the company can disburse funds for living expenses without directly paying a wage to the student. Proper tax filings are critical to maintaining compliance with US regulations.
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International students in the US on an M-1 visa
In general, US immigration laws do not permit nonimmigrants to earn self-employment income in the country. If a nonimmigrant student violates their status and earns self-employment income, they will be subject to US income tax. Additionally, if they become a resident alien, they will also be subject to self-employment tax.
There is no specific law or regulation preventing M-1 students in valid non-immigrant student status from starting their own business. However, the student must remain in valid student status and cannot receive any remuneration or salary from the business. They cannot be considered an "employee" of their own business, as that would require the business to pay them a wage, which is prohibited by immigration law.
M-1 students who wish to pursue self-employment should ensure that their business activities are allowed by USCIS and are closely connected to the purpose of their visa. They should also be mindful of their student status and ensure that they do not receive any wages or remuneration from their business, as this could violate their visa status and lead to potential deportation.
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International students in the UK on a Tier 4/Student visa
Tier 4/Student visa holders can only work full-time on a temporary basis and cannot be employed on a permanent contract. They cannot be self-employed, set up a business, or be employed as a professional sportsperson or entertainer. Self-employment includes activities such as freelance writing, publishing, private tutoring, or selling goods or services directly to an end customer. It is important to note that any work done while physically in the UK, including for a non-UK employer remotely, counts towards the weekly 10 or 20-hour maximum.
Students on a Tier 4/Student visa can volunteer, but the Home Office differentiates between volunteering and voluntary work. A small number of Master's courses include internships or placements as part of the course, which are permitted on a student visa, but the details must be provided to the Home Office in advance.
Once a student's course has officially ended, they are considered to be 'on vacation' and can work full-time for up to four months or until their visa expires, whichever comes first. If they wish to take a permanent full-time job in the UK after their course, they will need to change their visa status.
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International students in the US with an H-1B visa
International students in the US on an H-1B visa are generally not allowed to be self-employed. The H-1B visa is a non-immigrant visa that enables foreign nationals to work specifically for a US company. It is employer-specific, meaning that each H-1B visa is only valid for one particular company.
However, there are certain ways in which you can start your own business while on an H-1B visa. One way is to demonstrate an employer-employee relationship, where the control of your work is exercised by someone other than yourself, such as a Board of Directors. This Board should have the ability to supervise, direct, and review your work, as well as make decisions regarding your employment, such as termination. You can also provide an employment contract or agreement detailing the terms and conditions of your employment.
Another way to start your own business on an H-1B visa is through self-sponsorship. This requires meeting strict USCIS criteria, including demonstrating sustained national or international acclaim, providing a direct pathway to a Green Card, and showing that your start-up offers substantial merit and national importance.
It is important to note that you must maintain your original H-1B status until a new position is approved to avoid any periods of unlawful presence in the US. Additionally, the H-1B visa has an annual limit of 65,000 new visas each fiscal year, with an additional 20,000 petitions for those with a master's degree or higher from a US institution.
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International students in the US with OPT status
There are two types of OPT: pre-completion and post-completion. Pre-completion OPT can be authorized for part-time (up to 20 hours per week) or full-time (21 hours or more per week) and can be completed before a student finishes their academic studies. Post-completion OPT, on the other hand, is only authorized for full-time work and can be started after a student has completed their academic studies. Both types of OPT must be directly related to the student's major area of study.
Students with OPT status can also be self-employed and start their own businesses. However, they must adhere to strict guidelines enforced by the U.S. Immigration and Customs Enforcement (ICE). These guidelines include having the proper business licenses and being actively engaged in a business related to their degree program. Self-employed students must also secure a federal Employer Identification Number (EIN) from the Internal Revenue Service (IRS) for tax compliance and set up their business as an LLC, partnership, or corporation.
It is important for students with OPT status to carefully maintain their records and report any changes in employment. Failure to comply with OPT regulations can result in serious consequences, including removal from the country and reentry bars. Additionally, students should be mindful of the time limitations associated with OPT, as there is a maximum allowed period of unemployment during the OPT period.
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Frequently asked questions
International students in the US on an F1 visa are forbidden from "engaging in business" and cannot be employed by their own company. However, there is no law preventing them from establishing their own business, as ''preliminary business planning' is not considered 'engagement'.
International students in the UK on a Tier 4/Student visa cannot be self-employed.
M-1 visa holders are permitted to accept on-campus employment, and any off-campus training employment must be related to their area of study and authorised by the Designated School Official.
