By Annie Blay July 11, 2022
https://legalpad.io/blog/how-to-launch-a-startup-as-an-international-student/
The thought of launching your startup while in university might be overwhelming. Figuring out how to secure work authorization to launch your startup and possibly drop out of university might feel impossible. But the reality is, so many have gone before you! On top of that, Legalpad is here to help with everything visa and immigration-related so that you can focus on what’s most important, your startup!
If you’re considering launching your startup as an international student, you’re in good company.
A few years back, a study found that nearly one-fourth of all American unicorns (startups valued at $1 billion or more) have a founder that first came to the U.S. as an international student. Think of Elon Musk (Tesla/SpaceX), Noubar Afeyan (Moderna), John Collison and Patrick Collison (Stripe), Luis von Ahn (Duolingo), and Renaud Visage (Eventbrite).
Getting started
While you cannot “actively work” in the U.S. on an F-1 student visa without proper work authorization, you can “engage in passive work,” which includes activities such as:
- Conducting market research and customer discovery
- Discussing planned investments and purchases with prospective co-founders
- Attending and participating in business meetings
- Developing business relationships, such as meeting with investors and clients
- Negotiating contracts
- Incorporating a U.S. company, applying for an EIN, establishing a mailing address, and applying for a business license
If you have a co-founder who is an American citizen, green card holder or has work authorization, it is wise to have them handle getting the startup off the ground while you work on obtaining proper work authorization.
In order to work for your startup, whether on OPT/CPT, or a visa, your startup will need to be incorporated in the U.S., have applied for an EIN number, have a U.S. mailing address, and have applied for a business license (if required by the state your company will be operating in).
Options for working at your startup while enrolled in university, and in your first year after graduation
If you are on F-1 status, you are likely familiar with Curricular Practice Training (CPT) and Optional Practical Training (OPT). Here is how CPT and OPT can help you work for your startup:
CPT allows F-1 students to work temporarily after completing one full academic year at their university. You can work full-time during the fall and spring semesters, and part-time during winter and summer break. Your work must be related to your college major. Keep in mind that if you work for more than one full year with CPT, you will not be eligible for OPT in the future.
OPT allows F-1 students to work temporarily for one full year either before or after graduation in a job that relates to their college major.
You can work for your startup on CPT or OPT as long as your role and company fit within the CPT and OPT guidelines. This means that your startup and your role at your startup must in some way relate to your degree program.
Once you graduate, you can look into work visa options to enable you to continue to work for your company after your OPT expires. After your OPT expires, you will have a 60-day grace period before you will need to leave the U.S. Because of this, it is worth looking into future visa options well in advance to give yourself enough time.
Options for working at your startup after graduation
Once you have graduated and either already completed your OPT, or would like to look into other options for work authorization, you should consider the O-1 visa, the H-1B visa, and the International Entrepreneur Parole (IEP) Program.
The O-1 is the most advantageous visa for startup founders because it does not require you to be paid a high wage, as the H-1B does, and it can be extended indefinitely. While you’re still enrolled in a university or working on OPT, you can work on strengthening your O-1 qualifications to make sure that you are a strong candidate when the time comes to apply.
The H-1B visa is one of the most popular visa options. You will need a Bachelor’s degree that relates to your work at your startup, and you will need to be able to pay yourself a certain wage that is required for the H-1B.
The IEP is another potential option, which we typically advise for startup founders who don’t yet meet the O-1 requirements. The downside of the IEP is that it is a fairly new program with long processing times, it is only valid for 2.5 years and can only be extended once, and you cannot change your status from the IEP to another visa option in the future, nor can you pursue a green card while on IEP.
Finally, there are other visa options that may work for certain individuals, such as the TN visa for Canadian and Mexican nationals, the E-3 visa for Australian nationals, or the E-2 visa for investors.
Options for working at your startup after dropping out of university, or after OPT expires
If OPT and CPT just aren’t going to work for you and you want to put your full attention into your startup right now, we’ve got you covered! The options here are similar to the options above, however, your options will be slightly different without a Bachelor’s degree. The H-1B, for example, typically requires a degree, as do the TN and E-3.
Your best option is going to be the O-1 visa, which has no degree requirements, no wage requirement, and can be extended indefinitely. However, it can be difficult to qualify for the O-1 visa early on in your career. Founding a startup, raising funding, and going through an accelerator are just a few things that can put you ahead and help you qualify for the O-1. As mentioned above, it is wise to begin strengthening your O-1 qualifications as early as possible. If you don’t qualify for the O-1, you can also look into the IEP, which we describe in more detail above.
Let us help!
Regardless of your situation, don’t automatically assume that you don’t qualify for one of the visa options we mentioned, such as the O-1. Instead, talk to our experienced immigration team that has worked with hundreds of startup founders like you. Whether you need to figure out a visa ASAP or you’re simply planning ahead, we are here to help!
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