Lori Meadows
International students in the United States with dreams of launching their own startup face a complex and confusing process, with many considerations such as visa requirements, work authorizations, and business compliance. However, with the right guidance and preparation, it is possible to turn these dreams into reality, as demonstrated by successful entrepreneurs such as Adam Neumann and Satya Nadella. International students on F-1 visas can utilize Curricular Practical Training (CPT) or Optional Practical Training (OPT) to start working on their startups, allowing them to gain experience and build their ventures while studying. To navigate the intricate immigration landscape, it is advisable to consult with immigration attorneys or experts who can provide tailored advice and help students understand their visa options, such as the O-1, IEP, EB-1A, and others.
| Characteristics | Values |
|---|---|
| Student visa types | F, J, and M |
| F Student Visa | For study at an accredited U.S. college or university or to study English at an English language institute |
| J Exchange Visa | For participation in an exchange program, including high school and university study |
| M Student Visa | For non-academic or vocational study or training in the U.S. |
| OPT | Optional Practical Training (OPT) allows international students to work in the U.S. for up to 12 months, which can be extended for STEM majors |
| CPT | Curricular Practice Training (CPT) allows F-1 students to work temporarily after completing one academic year, as long as the work relates to their college major |
| O-1 Visa | For individuals with extraordinary abilities in their field |
| IEP | For startup founders who don't meet O-1 requirements; valid for 2.5 years and can only be extended once |
| EB-1A Visa | For international students from China and India; does not immediately grant work authorization |
| EB-2 NIW Visa | Requires an advanced degree or exceptional ability; does not immediately grant work authorization |
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What You'll Learn
Student visa types and requirements
To study in the US as an international student, you must obtain a student visa. There are two primary non-immigrant visa categories for international students: F and M visas. The F-1 visa is for full-time international students pursuing academic studies, while the M-1 visa is for those in vocational or other non-academic programs. To be eligible for these visas, you must be enrolled in an academic, language-training, or vocational program at a school approved by the Student and Exchange Visitors Program (SEVP).
F-1 visa holders may not work off-campus during their first academic year but may accept on-campus employment under certain conditions. After the first year, they may work off-campus in specific circumstances, such as severe economic hardship. Any off-campus employment for F-1 and M-1 visa holders must be related to their area of study and authorized by the Designated School Official.
Optional Practical Training (OPT) and Curricular Practice Training (CPT) are two programs that allow F-1 visa students to work temporarily. OPT enables students to work for one year before or after graduation in a role related to their college major. CPT allows students to work full-time during the fall and spring semesters and part-time during breaks, provided their work relates to their college major.
After completing their studies, F-1 students may be eligible for a STEM OPT extension, allowing them to work off-campus in STEM fields. However, they must work full-time and register their company with E-verify.gov. Once OPT/STEM OPT expires, students have 60 days to find alternative work authorizations; otherwise, they must leave the country.
For those looking to start a business while in school, the O-1 visa is an option. This visa has strict requirements, and preparing early is essential. The EB-1A visa is another option for international students, especially those from China and India, but it does not immediately grant work authorization.
Other visa options include the TN visa for Canadian and Mexican nationals, the E-3 visa for Australian nationals, and the E-2 visa for investors.
Working Visa Options for International Students
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Understanding work visas
International students in the United States typically hold an F1 visa, which is a non-immigrant student visa. This visa allows students to work in the US, but only under certain conditions and restrictions set by the United States Citizenship and Immigration Service (USCIS).
On-Campus Employment
On-campus employment is the most accessible option for F1 visa holders. It does not require USCIS approval, but opportunities may be limited. On-campus work includes jobs at school locations, such as bookstores or cafeterias, as long as the work directly provides services for students.
Off-Campus Employment
There are four categories of off-campus employment for F1 visa holders:
- Optional Practical Training (OPT): OPT allows students to gain work experience during or after their studies. Students must first apply for temporary employment authorization through OPT. If they find an employer who will support a work visa during their OPT, they can apply for a permanent or temporary work visa. The duration of OPT depends on the student's program, and STEM students may be eligible for a 24-month OPT extension.
- Curricular Practical Training (CPT): CPT must be completed while the student is still enrolled in their program. CPT allows students to gain work experience during and after their studies, with a total eligibility of 12 months of practical training.
- Employment with a Recognized International Organization: This category includes organizations listed by the State Department, such as the Red Cross, World Health Organization, and World Trade Organization. Students must have a job offer and sponsorship from one of these organizations to qualify.
- H-1B Visa: The H-1B visa is a temporary work visa that allows individuals to work in the US for a limited number of years. To qualify, students must have an employer initiate the visa process and obtain approval of a labor condition attestation (LCA) from the Department of Labor. The H-1B status is granted for an initial period of three years and can be extended for an additional three years under certain circumstances.
Other Visa Options
- M-1 Visa: This is for vocational students enrolled in non-academic programs (except language training).
- B-1/B-2 Visa: This is a temporary, non-immigrant visa for business or tourism purposes. It does not include student travel, which is categorized under the F1 visa.
- Green Card: A green card allows individuals to work anywhere in the US and live indefinitely. It is the first step towards permanent residency, but it may take many years to obtain. International students can work towards a green card by finding employer sponsorship or seeking asylum with the help of an immigration lawyer.
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Raising funds and finding investors
As an international student, there are various ways to raise funds and find investors for your startup. Here are some strategies to consider:
Fundraising Strategies:
- Early Planning: Begin your fundraising efforts as early as possible. Starting early allows you to explore different fundraising channels and provides more flexibility in achieving your financial goals.
- Scholarships and Grants: Research and apply for scholarships and grants specifically for international students. These can be offered by universities, government organizations, or private institutions. For instance, the ISE organization offers an early-bird discount, a host family discount, and the ISE ambassador scholarship.
- Personal Savings: Save your spare change and encourage friends and family to contribute theirs as well. Small amounts can add up over time.
- Crowdfunding: Utilize crowdfunding platforms such as Fund My Travel, Project Travel, or GoFundMe to reach a wider network of potential donors.
- Creative Fundraisers: Get creative with your fundraising activities. For example, offer community service hours in exchange for donations, sell promotional apparel, or host events where you provide instruction or entertainment in exchange for donations.
- Donation Appeals: Make direct, informal appeals to individuals or groups with an interest in your home country or specific countries. Include a personal photo and be specific about how you intend to spend the funds. Make donating easy by accepting various methods, such as cash, checks, or online contributions.
Investment Strategies:
- Index Funds: Consider investing in index funds, such as those based on the Standard & Poor's 500 index, which include stocks from large American companies across different industries. This diversifies your investment and reduces risk compared to owning individual stocks.
- Small-Scale Investing: Start with small-scale investing, which involves making modest financial investments with limited capital. This approach allows you to diversify across various assets like stocks and bonds while adopting a long-term perspective to achieve specific financial goals.
- Investment Apps: Utilize brokerage apps like Fidelity, which offer low fees and responsive customer service, providing a favorable environment for new investors.
- Early Investment: Investing early as a student offers the advantage of time. You can benefit from compounding by investing in vehicles like stocks, bonds, or real estate, allowing your wealth to grow over the long term.
Remember, fundraising and investing as an international student require perseverance, confidence, and a thoughtful, informed approach. Don't be afraid to seek advice from experienced professionals and always prioritize understanding your financial goals and risk tolerance.
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Legal and compliance considerations
International students wishing to start a business in the United States must navigate a complex web of legal and compliance considerations. While the F-1 visa allows international students to study in the US, there are strict rules around working, and conducting business activities is generally forbidden. However, there are some options for international students to legally start their own business while studying.
Curricular Practice Training (CPT)
F-1 visa holders can use CPT to work for their startup for up to a year while still in school. The work must be related to their college major and can only be full-time during the fall and spring semesters. CPT is not available after graduation.
Optional Practical Training (OPT)
Like CPT, OPT allows F-1 visa holders to work for their startup for up to a year while studying. OPT can also be used after graduation and can be extended by two years for STEM students. However, OPT cannot be used to engage in business activities that would result in receiving a salary.
H-1B Visa
The H-1B visa is a dual-intent visa for workers in specialty occupations. To obtain this visa, an international student must have an employer sponsor and demonstrate a valid employer-employee relationship. This can be challenging for a startup founder, as it requires that someone other than the student has the authority to hire, pay, supervise, and fire the student as an employee.
O-1 Visa
The O-1 visa is for individuals with extraordinary abilities and is often used by startup founders. It is important to start building eligibility for this visa early on, as it has strict requirements.
EB-1A Visa
The EB-1A visa is the most difficult immigrant visa to acquire, requiring proof that the applicant is in the top 1% of their field. While it does not immediately grant work authorization, it starts the green card process. This visa is particularly attractive to international students from China and India due to shorter wait times.
IEP
The IEP is a potential option for startup founders who do not yet meet the O-1 requirements. However, it is a new program with long processing times and can only be extended once. IEP holders cannot pursue a green card or change their status to another visa option.
In addition to these visa options, international students starting a business in the US must also ensure they have the necessary licenses and permits and obtain an Employer Identification Number (EIN) from the IRS. They should also be mindful of potential challenges in securing funding due to their immigration status.
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Networking and collaboration
- Join Professional Organizations: Consider joining reputable professional organizations, such as general associations for founders or industry-specific groups like the American Society of Mechanical Engineers. Accelerators or incubators can also provide valuable networking opportunities.
- Participate in Judging Panels: If you're part of an accelerator or incubator, offer to sit on judging panels for business events like hackathons. This will allow you to connect with other like-minded individuals and showcase your expertise.
- Visa and Immigration Support: Navigating the complex world of visas and immigration can be challenging. Seek support from immigration experts or legal advisors, such as Legalpad, who can guide you through the process and help you explore visa options like the O-1, IEP, TN, E-3, or E-2 visas.
- Connect with Alumni: Many universities have successful alumni who were once international students themselves, such as Elon Musk (Tesla/SpaceX), Noubar Afeyan (Moderna), and Satya Nadella (CEO of Microsoft). Reach out to your university's alumni network to seek mentorship, advice, and potential collaboration opportunities.
- Online Platforms: Leverage the power of online platforms like LinkedIn to connect with other international students, entrepreneurs, and professionals in your industry. Share your experiences, seek advice, and build a strong online presence.
- Collaborate with On-Campus Initiatives: Collaborating with on-campus initiatives, such as entrepreneurship programs or business plan competitions, can connect you with like-minded students and faculty members who can provide valuable insights and support.
Remember, building a strong network and collaborating with others can open doors to new opportunities, mentorship, and potential partnerships that will be invaluable as you launch your startup. Don't be afraid to put yourself out there and seek out networking opportunities wherever possible.
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Frequently asked questions
It is important to get acclimated to being in a new time zone and country. Before orientation, you can set up a bank account and a cell phone plan, and find your dorm room. It is also a good idea to contact your family when you land at the airport, as there will be Wi-Fi available.
It is recommended to research the different phone companies and plans before travelling to the US, as carriers and coverage may vary by city and state. It is also a good idea to travel with some cash and a credit card.
It is recommended to go to a course provider open day to explore the campus and get insights from staff and students. You can also take a virtual tour or attend a UK or British Council event.
It is important to understand the legal and practical implications of starting a business as an international student. This includes selecting the appropriate business entity and understanding your tax obligations. There are several businesses that F-1 visa holders can legally venture into, such as e-commerce, blogging, or digital marketing.
International students with an F-1 visa cannot "actively work" in the US without proper work authorization, but they can engage in passive work. This includes activities such as incorporating a US company, applying for an EIN, establishing a mailing address, and applying for a business license. After graduation, there are several work visa options to enable you to continue working, including the O-1 visa, the H-1B visa, and the International Entrepreneur Parole (IEP) Program.
