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F1 Students Start a Business

If you’re an F1 student in the United States, you may have ambitions of becoming a business owner. But can F1 students start a business? The answer is yes; but it’s a little bit complicated.

While there are some strict regulations attached to the F1 visa, there are also some loopholes that you can use if you wish to start your own company. In the information below, we’ll go over some of the possible routes you can take.

Understanding the Limitations

The USCIS forbids F1 students from "engaging" in business. However, you are not specifically prohibited from creating your own business. This is because "preliminary business planning" is not counted as business engagement. However, after you have established your business, you will not be allowed to work for it or collect a salary. Unfortunately, you cannot simply work for your own company without compensation. This is because you cannot be considered a volunteer if you’re performing work at a for-profit business.

Even with these restrictions, there is a way that you gain a profit from your own company as an F1 student: investing in your own business. This way, you will be able to receive dividends which are not considered a salary. It should be noted, however, that you will need to report this revenue on your income tax return. While this option allows you to receive some money from your business, you still cannot be involved in the business’ operations unless you change your visa status.

If you wish to be involved in the operations of your business, you can apply for additional status: 

Seeking Additional Status

1) Curricular Practice Training (CPT)

You can gain work authorization by applying for CPT. Under this status, you will be permitted to work for your own company. However, your company and the work you do must pertain to your area of study. 

2) Optional Practical Training (OPT)

As with CPT, OPT is a work authorization that allows you to operate your own business so long as that business relates to your area of study. It is important to note, however, that you will need to be granted an Employment Authorization Document (EAD) before you are eligible to apply for OPT.

You can engage in OPT either during your studies or after you have completed your degree. However, if you choose to do OPT while you are in school, you may only work a maximum of 20 hours a week. If you choose to do OPT after you have graduated, you will be allowed to work full-time for up to one year after your graduation date. If you studied math, engineering, or science, you may be able to apply for an extension.

Changing Your Visa Status

1) H1B Visa Change of Status

Many people who engage in OPT decide to apply for H1B visa change of status so that they can remain in the U.S. after their OPT period has expired. If you start your business as an OPT student, OPT to H1B change of status could be a good option for you.

The H1B visa is a temporary, nonimmigrant work visa that allows you to work in the U.S. for a period of up to six years (with extensions). In order to be eligible for an H1B visa, you must hold a bachelor's degree or higher. However, the drawback to this option is that you cannot work for your own company as an H1B visa holder. Instead, you will have to be a passive investor. There are also a few other disadvantages of the H1B visa, including an annual cap of 85,000 visas--this quota is usually met within just a few weeks.

2) Treaty Trader: E1 Change of Status

You may also be able to apply for an F1 to E1 change of status after graduation. While the E1 visa is also a temporary visa, you are allowed to apply for unlimited renewals. This provides a distinct advantage over other option since you won’t have to worry about leaving the country in a matter of just a few years. The E1 visa also allows you to bring immediate and dependent family members--such as your spouse or children--to the United States. In order to be granted E1 change of status, you will need to meet a few requirements:

  • You are of an executive level or higher in the company.
  • You are a citizen of a country that maintains trade treaties with the U.S.
  • Over 50 percent of your company’s holding are within a treaty country that is in trade with the U.S.
  • Your business is generating professional relationships that could be instrumental to the organization’s success in both the U.S. and your country of citizenship.

3) Investor Visa: E2 Change of Status

Another option you could try an F1 student is to apply for an E2 visa. You may qualify for an F1 to E2 change of status if you are able to invest a substantial amount of money into a business venture. Typically, this involves a minimum of $500,000. There are some other requirements for this option that you will need to meet as well:

  • You can provide evidence that you have a significant interest in the success of the business.
  • Your business will create new jobs for U.S. citizens.
  • You will conduct at least 50 percent of your business’ operations in the U.S.
  • Your business maintains at least 50 percent of its operations in the U.S.

4) F1 to Green Card

The last option we will discuss is a bit more complicated than the others, but it will allow you to found and work for your own business without restrictions. Below are a few of the many ways you can go from an F1 student visa to a green card:

  • Sponsorship by a business-owning relative - If you have a business-owning relative who is a permanent U.S. resident, they may be eligible to sponsor you for a green card. First, you would have to become an employee of their company. Then, they would need to prove to USCIS that your position is necessary and not created solely so that you could gain sponsorship for a green card.
  • Green Card Lottery - The Electronic Diversity Lottery, commonly known as the Green Card Lottery, happens once a year between October and November. Since it is a lottery, entering does not guarantee you a green card. It is important to note that not all countries of citizenship are qualified for the Green Card Lottery--for example, if your country has sent over 50,000 immigrants to the U.S. within the last five years, you will not be able to apply for the Green Card Lottery.
  • Marriage - This is probably the most widely known green card option. If your marriage is a legitimate relationship, then it’s also the easiest green card option. However, if your marriage proves to be fraudulent, you will not receive a green card and you may have to leave the United States.
  • Asylum - If returning to your country of citizenship could possibly put you in a position of grave danger, you may be eligible for asylum. Once you are granted your green card through asylum, you may begin working for your own company.

Conclusion

So, back to our original question: Can F1 students start a business? Yes, but in a very roundabout way. In the end, you cannot start your own business with an F1 visa unless you apply for additional status (OPT or CPT) or a change of visa status. Since these paths are indirect with a lot of gray areas, it can be extraordinarily beneficial to have legal guidance at your side. For a free consultation, contact the experienced team of business and immigration lawyers at Katz Law Office Ltd. today.

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