Lana Oconnell
International students in the USA on an F-1 visa are not permitted to work for their own startup or run their own business, but they can engage in passive work such as incorporating a company, applying for an EIN, and establishing a mailing address. To work for their startup, international students must obtain work authorization, such as OPT or CPT, which must relate to their degree program. After OPT expires, students can explore other visa options such as the O-1, H-1B, E-2, TN, EB-1A, and EB-2 NIW visas to continue working for their startup in the US.
| Characteristics | Values |
|---|---|
| Student visa types | F, J, M |
| F-1 visa | For foreign national students pursuing degrees, diplomas, or certificates at accredited institutions |
| J-1 visa | For participation in an exchange program |
| M-1 visa | Not specified in sources |
| OPT | Optional Practical Training; F-1 students can work for up to 12 months before or after graduation in a job related to their major area of study; can be used to work for a startup as long as it relates to the degree program |
| STEM OPT | OPT extension for students with degrees in STEM fields; can be extended for up to 24 months |
| CPT | Similar to OPT, but details unclear |
| Work visa options | O-1, H-1B, International Entrepreneur Parole (IEP) Program, EB-2 NIW, EB-1A |
| O-1 visa | No degree requirements, no wage requirement, can be extended indefinitely; difficult to qualify early in career |
| H-1B visa | Requires a degree |
| IEP | Details unclear |
| EB-2 NIW visa | Requires advanced degree or exceptional ability; does not immediately grant work authorization |
| EB-1A visa | For individuals with extraordinary abilities; does not immediately grant work authorization |
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What You'll Learn
- Understanding work visa options like O-1, H-1B, E-2, EB-2 NIW, EB-1A, etc
- Navigating work authorization for F-1 visa holders
- Exploring passive work options like incorporating a company, applying for EIN, etc
- Working with a co-founder who can handle operations while you obtain work authorization
- Consulting an immigration attorney to navigate complex laws and regulations
Understanding work visa options like O-1, H-1B, E-2, EB-2 NIW, EB-1A, etc
As an international student in the USA, there are several work visa options to consider if you want to start a business or work for a company. Here is an overview of some of the common visa types:
O-1 Visa
The O-1 visa is for individuals with extraordinary abilities or achievements. To qualify, you must demonstrate a sustained national or international reputation in your field, such as science, education, business, or athletics. This visa has no degree or wage requirements and can be extended indefinitely. However, it can be challenging to obtain early in your career.
H-1B Visa
The H-1B visa is a non-immigrant visa for specialty occupations, services of exceptional merit and ability, or distinguished fashion models. It typically requires a degree and has an annual cap on the number of visas issued. The employer must first obtain certification and file Form I-129 before the prospective employee can apply for the visa and admission to the US.
E-2 Visa
The E-2 visa is a non-immigrant visa for treaty investors, allowing nationals of certain countries with US treaties to invest a substantial amount of capital in a US business. It also applies to certain employees of such investors or organisations. The investment must not be marginal, meaning it should have the capacity to generate enough income to provide a living for the investor and their family within five years.
EB-2 Visa (NIW)
The EB-2 visa is an employment-based, second preference visa. It is for members of professions holding an advanced degree or its equivalent, or individuals with exceptional abilities. To qualify, you must provide evidence of a US degree above a bachelor's or its foreign equivalent, along with progressive experience in your specialty field.
EB-1A Visa
The EB-1 visa is an employment-based, first preference visa. It is for aliens of extraordinary ability, outstanding professors or researchers, or certain multinational executives or managers.
It is important to carefully review the requirements and eligibility criteria for each visa type, as well as seek professional advice, to determine the most suitable option for your specific circumstances.
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Navigating work authorization for F-1 visa holders
As an F-1 visa holder, you must show that you can afford school and living expenses before entering the US and should not plan to work off-campus. You can only work off-campus if you have been enrolled for at least one academic year, are in good academic standing, and can prove that on-campus employment opportunities are insufficient to meet your financial needs. You must also file Form I-765, "Application for Employment Authorization", and pay a fee to the US Citizenship and Immigration Services (USCIS). If your application is approved, you will receive a Form I-766, "Employment Authorization Document" (EAD), and can begin working. This off-campus work authorization is granted for one year.
F-1 visa holders can also engage in Optional Practical Training (OPT), which allows them to work temporarily for one full year before or after graduation in a job related to their college major. To be eligible for OPT, you must have been enrolled full-time for one academic year at an institution certified by the US Immigration and Customs Enforcement (ICE) Student and Exchange Visitor Program (SEVP). You can work part-time (up to 20 hours per week) during the academic year and full-time when school is not in session. If you have already received one year of full-time pre-completion OPT, you will not be entitled to any period of post-completion OPT.
If you have earned a degree in certain Science, Technology, Engineering, and Mathematics (STEM) fields, you may apply for a 24-month extension of your post-completion OPT. However, all periods of pre-completion OPT will be deducted from the available period of post-completion OPT.
After your OPT expires, you will have 60 days to find alternative work authorizations or leave the country. At this point, you can explore other visa options such as the O-1, H-1B, E-2, or TN visas, which do not require a degree, or the EB-1A and EB-2 NIW visas, which are permanent residency options. However, the EB-1A and EB-2 NIW visas do not immediately grant work authorization, and you will need to wait for your green card to be processed.
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Exploring passive work options like incorporating a company, applying for EIN, etc
As an international student in the USA, you can engage in "passive work", which includes activities such as incorporating a US company, applying for an EIN, establishing a mailing address, and applying for a business license. Here are the steps to accomplish these passive work options:
Incorporating a US company
Firstly, you need to set up your business entity. You can choose to structure your business as an LLC, a corporation, a partnership, or another type of entity. This step is necessary to protect your personal assets and establish your business's legal structure.
Applying for an EIN
An EIN, or Employer Identification Number, is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to businesses for tax purposes. As an international student without an SSN or ITIN, you can still apply for an EIN by completing Form SS-4, the Application for Employer Identification Number. You can submit this form to the IRS by mail, fax, or phone. When filling out Form SS-4, you must indicate the foreign status of your entity and follow the instructions for foreign entities, which include not providing an SSN or Individual Taxpayer Identification Number (ITIN) if you do not have one. Obtaining an EIN is free, but there may be associated costs if you hire professionals to help with the application process or understand your US tax obligations.
Establishing a mailing address
Your business must have a mailing address, which can be a US address or an international one. This address will be used for official correspondence and will be listed on your Form SS-4 when applying for an EIN.
Applying for a business license
Depending on the state in which your company will operate, you may need to apply for a business license. This license authorizes your company to conduct business within that state and may be subject to specific industry regulations.
Remember, while these passive work options are available to international students, you cannot "actively work" in the US without proper work authorization. These steps will help lay the foundation for your startup, and once you obtain the necessary work authorization, you can fully focus on growing your business.
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Working with a co-founder who can handle operations while you obtain work authorization
As an international student in the US, you can start a business and create a business plan on an F-1 visa. However, you cannot work for your startup on an F-1 visa without proper work authorization. This is where a co-founder can be extremely helpful. If your co-founder is an American citizen, a green card holder, or has work authorization, they can handle the operations of the startup while you obtain work authorization.
There are several steps you can take to launch your company in the US before obtaining work authorization. This includes setting up your business entity, such as an LLC, securing investors and clients, and acquiring a workspace. You can also incorporate a US company, apply for an EIN, establish a mailing address, and apply for a business license. Additionally, you can conduct market research, create a business plan, and make agreements with your co-founder.
Once your startup is off the ground, you can explore different visa options to obtain work authorization. The O-1 visa is a popular choice for startup founders as it has no degree or wage requirements, and can be extended indefinitely. However, it can be challenging to qualify for early in your career. Other options include the H-1B visa, the International Entrepreneur Parole (IEP) Program, the EB-1A visa, and the EB-2 NIW visa. Each of these visas has its own requirements and advantages, so it's important to research and plan ahead to determine which one is the best fit for your specific situation.
While navigating the visa process, you can continue to work on your startup in a more passive capacity. This includes activities such as incorporating your company, applying for an EIN, and establishing a mailing address. Remember, you are not alone in this journey; many successful startups in the US were founded by international students who navigated similar challenges.
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Consulting an immigration attorney to navigate complex laws and regulations
International students in the United States who are considering starting a business may benefit from consulting an immigration attorney. Immigration law can be complex, and even cases that appear straightforward may have hidden issues that are difficult to identify without legal expertise.
An experienced immigration lawyer can help international students navigate the various pathways for entrepreneurs to work in the United States. They can advise on the specific requirements and eligibility criteria for different visa options, such as the O-1A nonimmigrant visa, EB-1A immigrant visa, H-1B visa, E-2 visa, and L-1A visa, among others. For example, the O-1A and EB-1A visas are typically for individuals with "extraordinary ability" who have achieved sustained national or international acclaim in their field of expertise. On the other hand, the H-1B visa generally requires a U.S. bachelor's degree or its equivalent in a specialty related to the position.
Immigration attorneys can also guide international students through the process of securing work authorization, which is crucial for launching a startup. While F-1 student visas allow for "passive work," such as incorporating a U.S. company and establishing a mailing address, they do not permit "active work" without proper work authorization. Attorneys can help students understand the requirements and timing for obtaining the necessary work permits or visas to ensure they are compliant with U.S. immigration laws.
Additionally, immigration lawyers can provide valuable advice on the steps to take before obtaining work authorization, such as setting up the business entity, securing investors and clients, and acquiring a workspace. They can also assist in navigating the complex web of regulations and requirements that international student entrepreneurs need to consider when starting a business, helping them avoid potential pitfalls and saving them time and resources in the long run.
By consulting an immigration attorney, international students can gain clarity on their options, understand the risks associated with different pathways, and develop a well-informed strategy for launching their startup in the United States while ensuring compliance with immigration laws and regulations.
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Frequently asked questions
Yes, international students with an F-1 visa can start a business in the US. However, they cannot work for the company or earn an income from it unless their work falls under the guidelines for CPT or OPT. F-1 students are generally authorized up to 12 months of OPT (Optional Practical Training) and this must relate to their program of study.
There are several options for a startup visa in the US. The O-1 visa is a good option as it has no degree requirements and can be extended indefinitely. However, it can be difficult to qualify for. Other options include the H-1B, EB-1A, E-2, TN, and the International Entrepreneur Parole (IEP) Program.
F-1 visa holders cannot be found "engaging in business" or "actively working". They can, however, invest in their company and receive dividends. They can also incorporate a US company, apply for an EIN, establish a mailing address, and apply for a business license.
