“Self Employment” H1B Visa for Founders: Start Up Owners can now Apply for Visas!

Did you know that forty percent of Fortune 500 companies in the United States were started by immigrants or the children of immigrants. From 1995 to 2005, half of Silicon Valley startups had an immigrant founder and in 2005 alone those businesses did $52 billion in sales creating more than 400,000 jobs. Iconic American companies that built whole new industries like US Steel, Dupont, Google, eBay, Honeywell, and Intel were started by immigrant founders. Chobani Yogurt, founded in 2005 by the immigrant entrepreneur Hamdi Ulukaya in upstate New York, has created 1,500 American jobs.

Just as we find common ground that unites families and protects communities, so too should we ensure that the world’s most talented innovators and entrepreneurs who are educated in our great universities are able to stay and contribute, rather than be forced to set up competitor businesses abroad. Many end up leaving because our visa options for self employed founders are limited.

Foreign Start Up founders often struggle with visa options to stay and launch a company in the US. The options are limited, if your country is part of a US Investment treaty, one can apply for the E2 visa and start a small company by investing some money. If you have a million dollars, you could also invest in your business, and could apply for the EB5 Immigrant Visa. But what if you don’t have money, and your country is not a member of the E2 treaty? Well until recently you were out of luck.

Now we have more options to offer our clients due to some changes to the H1B work visa. On Aug. 2, 2011, the USCIS announced a number of immigration initiatives to boost the economy by attracting and retaining foreign entrepreneurs. Rather than tackling the nearly impossible task of passing immigration legislation in the Congress, the Administration has decided to re-interpret the current immigration laws in favor of foreign entrepreneurs. It recognizes that it must bring the best and brightest from around the world in order to grow the U.S. economy and create jobs. In general, these new immigration initiatives reduce barriers to foreign entrepreneurs.

H1B Visa Changes to benefit Self Employed Founder and New Business Owners

Under the new initiatives, an entrepreneur with a majority or even 100% stake in his or her own company, including a sole employee, may be able to obtain an H1B visa if he or she can demonstrate that the company has the right to control the entrepreneur’s employment. The USCIS states in that document that it is willing to accept the existence of an H1B employer-employee relationship, even if the prospective H1B employee owns a majority share of the company, as long as it can also be shown that there is some external check on the employee’s authority.

The USCIS referenced an independent board of directors as an example. The USCIS Q&A states that, “… if the petitioner provides evidence that there is a separate Board of Directors which has the ability to hire, fire, pay, supervise or otherwise control the beneficiary’s employment, the petitioner may be able to establish an employer-employee relationship with the beneficiary.”
If the company has a separate Board of Directors that has authority to hire, fire, pay, or supervise the entrepreneur. This is a major step forward by USCIS and can be seen as a reversal of its previous policy announced in a January 2010 memo, which essentially killed any hopes of a self-employed, majority-shareholding entrepreneur to obtain an H1B visa.

The USCIS suggests that, in addition to an independent board of directors, it may be sufficient to show that there are preferred shareholders, investors, or other factors to demonstrate that the company controls the terms and conditions of the entrepreneur’s employment. The existence of this proof may be enough to establish a distinction between the entrepreneur’s ownership interest in the company and the right to control his/her employment.

Case Examples

Business Development Specialist for a small Recruiting Agency. Our client was a founder of this European agency with a rep office in California. He was the 80% of his Corporation and held a Bachelors Degree in Business.

We divided the case into 2 parts. First, demonstrated that this was in fact a specialty occupation type of position. We had several letters from similar companies, letter from a professional association, complexity of the job evidence and a detailed resume.

The second part of the case addressed the Employee-Employer relationship as per the recent Memo. We had detailed minutes of the Company, Evidence that a board was set up, and other evidence as to the Control of the Company. We won the case because we established a legitimate employer-employee relationship, based on the existence of external controls on the H1B employees’ actions, even though the employees in these cases held majority ownership of their companies.

Several other cases with similar fact patterns were approved, for Chinese and Indian national that were not eligible for E2 visas, but could benefit from the recent Changes in the procedure in the H1B visa arena.

Changes in the Green Card filings for Self Employed Owners under EB2 Category

It appears, however, that the new USCIS initiatives may have reduced the restrictions for foreign entrepreneurs with exceptional ability in business to qualify for the EB-2 visa category. For instance, USCIS states that the foreign entrepreneur can make a unique case as to why he or she is exceptional, which can include, providing evidence of his or her successful history in obtaining funding from reputable sources or his or her past participation in quality, selective incubators, lecturing in TED type events or the influence in the internet world for instance.

The new USCIS initiatives also may make it easier for the foreign entrepreneur to qualify for the National Interest Waiver (NIW) exemption of the EB-2 visa category. The NIW exemption waives the EB-2 job offer and labor certification requirements if it is in the U.S.’s national interest. The job offer and labor certification requirements have been significant barriers to foreign entrepreneurs in obtaining permanent residence. Now, under the new initiatives, if an entrepreneur can demonstrate that his or her entrepreneurial efforts will benefit the national interest of the U.S., he or she could potentially qualify for the NIW. For example, we have prepared cases for Business People that formed companies here, and the companies generated jobs, lots of jobs for US workers.

There are some good options with the recent changes. It is important to consult an experienced Immigration lawyer to understand the implications of the self employment H1B, and the risk this process may create when applying for a Green Card in the future.

Email us with any questions or concerns.