The difficulty for entrepreneurs to start a business under an H1B visa is getting some relief with a new program offered by some US universities. The pilot program is geared toward students who wish to stay in the US and start a business following graduation, an option that has not been feasible for most foreign students due to the various requirements.
The Chance to Start a Business Following Graduation
Obtaining an H1B visa to start a business has two primary barriers: demonstration of an employee-employer relationship, and being selected in the lottery which only offers a one in four chance of getting the visa.
In the new program, a few universities are offering graduating students a chance to start a business through a mentorship program. In essence, the school will “employ” the student part-time while they develop their business plans and implement the needed steps for viability. They can use university resources to develop their businesses, and have to start their business in the school’s locale.
Mentorship Program Sidesteps the H1B Visa Lottery
The university ‘mentorship’ program overcomes the two obstacles under H1B visa rules, the university is the ‘employer’ and can submit the petition, and because the sponsor is an institution of higher education the mentorship visas are cap-exempt, the petitions do not have to be placed in the annual lottery.
Both of these points are important, because a cap-exempt petition means that as long as the applicant meets the other criteria, they will have their visa approved. There are financial and structural challenges with obtaining visas for one’s own business as well, as described in this related article on our blog.
Universities Offering the Program
There are several universities that are leading the way on this new program, and notably it began in New York which sees a large number of H1B visa application for various IT companies. This list is sure to expand, but here are the initial participants in this novel approach to securing H1B visa status.
- Babson College, Boston, Massachusetts
- University of Massachusetts
- City University of New York (in partnership with the New York City Economic Development Council)
- University of Colorado, Boulder, Colorado
- University of Alaska – Anchorage
- Alaska Pacific University
What is the Reason Universities Are Offering This Program?
There are various political and economic rationales for this type of program, and the one that is voiced most often is that the H1B visa process does not lend itself to foreign startup founders who have entrepreneurial drive and ambitions. Many would like to see the creation of a ‘start up H1B visa’ but until that happens this is one option.
Other reasons for the program include:
- To give foreign entrepreneurs a chance to start a business straight out of college, without a return to their home country and need to go through the arduous process of obtaining an H1B visa through normal channels.
- Easing access to H1B visas for startup founders, which typically requires that there be a separate employer, or board of directors that are acting in control of the business. There are also capitalization requirements that may be difficult for some students to meet.
- Promoting local businesses and job growth in the region where the university is located.
- Creating a new attractive element for universities who are seeking talented students that have a long term plan to begin businesses in the US.
If you have questions about the H1B visa for startup companies, the new mentorship program or other cap-exempt positions available in the US, please contact us for more information.
- November 7th, 2016