Author: Attorney Jian Joe Zhou (jzhou@hooyou.com)

In January 2025, the U.S. Department of Homeland Security (DHS) implemented a new regulation regarding H-1B applications, particularly clarifying and expanding the definition of a "U.S. employer." This change opens up greater opportunities for foreign entrepreneurs (including F-1 students) to leverage the H-1B visa to establish and grow their businesses in the U.S. Entrepreneurs can now apply for an H-1B visa through their own companies.

I. Key Highlights of the New Regulation: How Entrepreneurs Can Benefit

1. Startup Founders Can Now Apply for Their Own H-1B

Under the new rule, individuals can obtain an H-1B visa through their own startup rather than relying solely on an external employer. Specifically, the rule clarifies that startup founders with controlling interest in their companies are eligible to apply for an H-1B visa for themselves. Controlling interest is defined as:

• Owning more than 50% of the startup's shares; or
• Holding a majority of voting rights in the company.

This means an individual can simultaneously be both the owner of the startup and the beneficiary of the H-1B petition filed by the startup company. They can use their own company as the sponsoring employer rather than depending on an external U.S. employer.

2. No Restriction on Company Size—Even a Sole Proprietorship Can Apply

The new regulation does not impose strict size requirements on startups, meaning that even a single-person company can qualify as an H-1B petitioner. However, the startup must establish a genuine employer-employee relationship with the beneficiary. This ensures that the company is not merely a shell entity created for visa purposes but is actively engaged in legitimate business operations.

3. Retaining Control While Holding an H-1B Visa

For beneficiary-owners, while the new rule requires that they primarily perform the duties of a specialty occupation (as specified in their H-1B petition), they are still allowed to allocate a small portion of their time to managing and operating their company.

For example, you are the founder of a U.S. tech startup and you plan to sponsor yourself for an H-1B visa through your company, the petitioned H-1B occupation is AI Technology Developer.  While the majority of your time must be dedicated to technical development, you can still dedicate a small portion of your time to overseeing business operations and management (such as participating in hiring new employees, or supervising subordinates).  The key is that you must spend most of your time on the H-1b specialty occupation, not on management .  

II. Key Eligibility Requirements for Startup H-1B Applications

1. Company Requirements (Including but not limited to):

• The company must be a legitimate and operational U.S. business and not a shell company. Supporting evidence such as a business plan, financial statements, and other relevant documentation must be provided to establish the company's authenticity and sustainability.
• The company must pay the beneficiary at least the prevailing wage as determined by the U.S. Department of Labor (DOL).
• The offered position must be classified as a specialty occupation (requiring specialized knowledge and at least a bachelor's degree).

2. Beneficiary Requirements (Including but not limited to):

• The beneficiary must possess the required educational qualifications or relevant work experience for the specialty occupation.
• Time allocation: The beneficiary must dedicate the majority of their work hours to performing duties related to the H-1B specialty occupation.

Example Case Study:

Tim, an international student on an F-1 visa, is currently working under STEM OPT. He plans to launch a tech startup while still on STEM OPT and use his company to apply for an H-1B visa. His steps include:

1. Company Formation: During his STEM OPT period, Tim establishes a U.S. company in which he holds more than 50% ownership (can be even 100% ownership).

2. H-1B Petition: He applies for an H-1B visa under the role of Chief Technology Officer (CTO) of his company.

3. Time Management: Tim ensures that 90% of his time is spent on technical development, while 10% is dedicated to company management. His business plan also outlines a plan to hire a professional administrative manager soon.

4. Supporting Documentation: He submits a business plan, job description, salary structure, and other evidence to prove the company’s legitimacy and compliance with H-1B requirements.

III. Important Considerations

1. Proving the Legitimacy of the Company

To prevent fraudulent applications, U.S. Citizenship and Immigration Services (USCIS) may increase scrutiny on such cases. Startups must provide comprehensive documentation, such as:

• Business contracts, investment records, revenue statements, and lease agreements to demonstrate real business operations.
• Proof that the company can pay the prevailing wage as required by the Department of Labor.
• Compliance with federal and state business regulations.

2. Special Restrictions: H-1B Validity Periods for Startup Owners

When an H-1B is approved for a beneficiary-owner, the initial approval period is up to 18 months. Subsequent first-time extensions are also granted for up to 18 months, while second and subsequent renewalsmay be extended for up to three years.

Real-World Impact

This regulatory change significantly expands opportunities for entrepreneurs to establish and grow their businesses in the U.S., particularly benefiting international students. Those on OPT/STEM OPT can now explore entrepreneurship as a viable pathway.

The lack of strict company size requirements means that even small startups—or single-person companies—can qualify if they provide the necessary documentation, such as a business plan and financial statements, to prove their viability. This development allows F-1 students to apply for an H-1B visa through their own companies, paving the way for legal residence in the U.S. while pursuing their entrepreneurial aspirations.

Additionally, successful startup founders who meet the necessary criteria may eventually qualify for U.S. permanent residency (green card), further solidifying their long-term presence and business growth in the U.S.

As the H-1B policy landscape continues to evolve, and with potential changes in immigration policies under the new administration, this year’s H-1B application process is expected to be more complex and unpredictable. Therefore, working with an experienced immigration attorney is now more crucial than ever.

About Attorney Jian Joe Zhou

Attorney Jian Joe Zhou is the Managing Partner at Zhang & Associates, P.C., with over 20 years of experience in business immigration law. He has successfully handled thousands of immigration cases, including complex H-1B petitions across various industries and professional backgrounds.

For legal assistance, you can contact Attorney Jian Joe Zhou at jzhou@hooyou.com.

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Founded in 1996, Zhang & Associates, P.C. offers legal services to clients worldwide in all aspects of U.S immigration law. We have successfully handled over ten thousand immigration cases.

At Zhang & Associates, P.C., our attorneys and supporting professionals are committed to providing high-quality immigration and non-immigration visa services. We specialize in NIW, EB-1, PERM, I-485 I-130, H-1B, O, L and J cases. In the past over twenty years, we have successfully helped over ten thousand clients get green cards. If you plan to apply for a green card, please send your CV to Attorney Jerry Zhang (info@hooyou.com) for a free evaluation.

Zhang & Associates, P.C.

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(02/20/2025)