F-1 Visa Start-Up Activities
Permissible Work for the Immigrant Student Entrepreneur
You are one of those sorts of people who are great at multi tasking. You are also a foreign student on a F-1 student visa. You should really be studying for mid terms, but your mind is preoccupied elsewhere. You have been burning the midnight oil, planning your first Start Up. You are not doing this alone of course, because your U.S. born roommate is planning the new business venture with you. This is convenient because you are together a lot of the time in the evening, which gives you plenty of opportunity to compile your Start Up business plan.
It’s not you, but your roommate, who suddenly questions the legality of setting up a Start Up if you are on a student visa and whether you have checked to see if you are allowed to do this. Because you had been so wrapped up finding your niche in the business world you hadn’t really thought whether what you were contemplating doing was legal or not. You had noticed that the information supplied with the foreign student I-20, F-1, or I-94 visas stated that authorization from the Government was required if you wished to work.
Fear creeps over you at the thought of all that time you had spent planning a lucrative Start Up and it could all be for nothing. No time is wasted. The next morning you go into the Foreign Student office and ask the question as to whether you are permitted to work while on an F1 visa. You get the answer you dreaded as you are told in no uncertain words that you must not work until you have graduated and then you will be eligible for OPT. Here is what an immigration lawyer could have told you.
A comment from an immigration lawyer
Anyone in the know who is on a F-1 student visa is fully aware that he or she cannot work unless authorized to do so by the government through the USCIS. If caught working in unauthorized employment you are breaching your F-1 status, which could jeopardize your stay in the U.S. and you may even be deported. This could shame your family and affect your long term career and earning potential. Is it worth the risk?
What is unauthorized employment?
Unauthorized employment is by definition “any services or labor performed by an alien for an employer within the U.S. that is not authorized.” As with many laws, there are often gray areas that are difficult to clarify when it comes to do’s and don’ts and F-I visas. However the outline below should help you better understand your position.
First of all, if you are investing and managing your own business and this is what you spend most of your time doing, this is employment that will definitely be considered illegal and unauthorized. A recent example of this was an F-1 student who bought a fleet of hot dog vans which he leased to hot dog sellers and made money by collecting rent from a percentage of the sales of hot dogs.
The student on the F-1 visa took part in daily activities of the hot dog business by purchasing the hot dogs and other stock for the vans and now and again participated in selling. This is definitely classed as “unauthorized employment”.
However, the simple act of owning a business is not considered to be employment and some start up activities are definitely allowed and do not compromise an F-1 visa status. These include incorporating a company, conducting market and feasibility research, holding and attending start up business meetings, and the development of goods, products and services. You are also even allowed to participate in fund raising activities such as putting on presentations and negotiating with Angel Investors, VCs and attorneys in an effort to source funding for your business. These are considered to be passive activities, which are permissible while day-day active business related duties are not.
When it comes to what is allowed is not so much based on getting paid but more whether the relationship you have is an employee-employer relationship or not when it comes to business activities.
Passive or active is the key to an authorized F-1 activity
Running a business by employing workers is not authorized as this is considered active participation. However, the role as a Board member and major shareholder means you can select an officer who can hire workers on your behalf. Additionally, any important decisions regarding the daily running of the business could be directed to the board by your U.S. elected officer.
The following business activities should not negatively affect your F-1 visa status:
- activities that aren’t considered employment e.g. taking orders for goods produced overseas;
- negotiating contracts;
- consulting with your business associates;
- taking part in conferences or seminars that are scientific, educational, professional, or business related;
- undertaking independent research;
- membership of a U.S. company’s board of directors;
- seeking to invest in the U.S., which would qualify for E-2 investor status.
Curricular Practical Training (CPT) or Optional Practical Training (OPT)
CPT may be possible if practical training employment makes up some of your academic program or OPT if the employment is related directly to a major part of your study. Generally, OPT and CPT are available for 12 months only after completing your studies. The designated school official has to authorize this, whether the employment is during your study or after.
Changing to an H-1B specialty worker
This is hard to do, especially if you are trying to transfer based on your own business, as no one has direct control over you.
Other visa categories post study
After completing your studies you may be eligible to apply for an H-1B Specialty Occupation visa, an O-1 Outstanding Ability visa, an E-2 Treaty Investor visa, a NAFTA “TN” Professional Visa (applies to Canadian and Mexican citizens) or an H-3 “training visa.”