A common question among H-1B holders is whether they can start their own company and work for it, rather than for an existing employer. The answer is: It depends. It depends on your degree, the nature of the company you want to create, your experience and expertise, the capitalization of your proposed business, your country of nationality, and a multitude of other factors.

Entrepreneur Pathways

To help orient prospective entrepreneurs about their options and to encourage new business as a means to help stimulate the economy, USCIS has launched a new site called Entrepreneur Pathways.

The site provides big-picture information on the immigration process, potential visa types, and information on outreach programs. The site seems to be a work in progress, with some pages not seeming to function properly in at least one browser (Internet Explorer), such as the “Click Here” link on the Get Started page.  The Visa Guide page, however, was accessible. It provides a useful click-through interface to help the reader identify potential visa types.

Visa Options for Entrepreneurs

There are several visa types that are appropriate for entrepreneurs, depending on the specifics of your situation, including such nonimmigrant visas as H-1B visas, O visas for those with extraordinary abilities, E visas for treaty traders and investors, and L-1 visas for intracompany transferees.

The site focuses on nonimmigrant visa categories, and does not mention the immigrant visa categories for entrepreneurs, such as the EB-5 for investors and those who might qualify in the EB-2 category under National Interest Waiver or other subtypes.

The information on the site is useful from the standpoint of telling you what options exist, and USCIS should be applauded for its efforts to create a single resource to educate foreign entrepreneurs about their visa options as part of the larger effort to boost the economy.

Reality Check for Entrepreneurs

Don’t start planning your future yet, however. While USCIS is doing a lot of talk, its actions are still to be seen. What this site does not show you is the reality check on the likelihood of being approved for any of these visas. For example, obtaining an H-1B for start-up company has been extremely difficult. Even more troubling, documentation received by the Legal Action Center of the American Immigration Council after a hard-fought FOIA request shows USCIS appears biased against young, small companies applying for H-1Bs or Ls, and targets them for fraud investigations.

Specifically, a USCIS document identifies three red flags which are presumed to show companies more susceptible to fraud: 1) H-1B or L petitioners with a gross income of less than $10 million; 2) with 25 or fewer employees; 3) or that were established within the last 10 years.  These factors are known as the “10/25/10” factors in reference to their relevant numbers. Where these factors exist, adjudicators are to review them “with an awareness of the heightened possibility for fraud and/or technical violations” and refer them for “further scrutiny.”

In practice, this heightened scrutiny of small companies results in extensive, burdensome documentary requests for additional information about the company, its operations, etc.

In the end, this targeting of small companies has a chilling effect on applications, as well as approvals, which undermines the government’s stated policy goal of promoting entrepreneurship.

So, while USCIS should be applauded for encouraging entrepreneurship, especially in this poor economy, by making information more accessible, it will need to follow through in action by ensuring start-ups are treated equally and fairly in the adjudication stage.

If you are a budding entrepreneur looking at your visa options, whether that be an H-1B or other visa type, have hope the immigration landscape is changing to support people like you. But before you act, be sure to speak with a competent attorney about the specifics of your matter for a reality check on your options, likelihood of success and the best way forward for you.

For more information about H-1B employee rights, contact the attorney-authors.