H-1B visas have been wildly used by many established mid to large size U.S. corporations to utilize foreign talents in their work force, and needless to say, it has provided many great results for those companies. But what about those foreign talents and entrepreneurs who want to start their own company in United States and either don’t have enough capital to get the E-2 investment visa, or are not considered aliens of extraordinary ability for O-1 visa purposes.
Up until a few years ago, these group of individuals did not have many other alternatives, however, due to the successful applications of many tech startup companies in Silicon Valley, many of which founded by foreigners, a new policy came out in August 2011 – largely thanks to President Obama for his entrepreneurial spirit – which relaxed the rules about the employer-employee standard for H-1B visas and allowed U.S. companies founded by these individuals to sponsor them for H-1B visas. Below is the list of the key requirements for self employment H-1B visa for startup founders.
The employer-employee relationship
In general, a valid employer-employee relationship is determined by whether the U.S. employer may hire, fire, supervise or otherwise control the work of the H-1B worker. But satisfying this prong could be a little tricky if the beneficiary employee is also the founder or the CEO of the company. As such, the new policy requires the facts to show that the petitioning entity has the right to control the beneficiary’s employment.
One way to do this, is to have a board of directors in the company that controls the terms and conditions of the founder’s employment. Additionally, USCIS provides some guidance regarding the use of other corporate devices, such as:
- Term Sheet
- Capitalization Table
- Stock Purchase Agreement
- Investor Rights Agreement
- Voting Agreement
- Other Organizational Documents
Of course, not every single item in the above list is mandatory. For instance, having a restricted stock purchase agreement in place for a founder that provides for a list of events the occurrence of which justifies the termination of the founder’s employment is one way to go about this. Or, having a voting agreement that calls for majority vote for financing decisions, etc., is another way to help satisfy that requirement. In general USCIS wants to see some measures in place that relieve the CEO/founder from having broad authority in decision making, even if she or he is the majority shareholder in the company.
The other requirements are identical to that of the traditional H-1B petitions. Here is the list:
- Your job must qualify as a specialty occupation;
- Your job must be in a specialty occupation related to your field of study;
- You must be paid at least the actual or prevailing wage for your job; and
- An H-1B visa number must be available at the time of filing the petition unless the petition is exempt from numerical limits.
If you are a founder of a startup and interested in self employment H-1B visa where your company sponsors you for an H-1B visa, you should consult an expert immigration attorney at Eikon Law who has experience in self employment H-1B visa for startup founders. We are ready to help if you are ready to build.