New Regulation Allows H 1B Holders to Own and Run a Company What to Know

Summary

This video discusses the new H-1B visa regulation taking effect on January 17, 2025, which allows H-1B holders to sponsor themselves for a visa if they own 100% of a business, provided they spend at least 51% of their time in a specialty occupation. The new rule aims to support entrepreneurs while maintaining strict compliance requirements, including a bonafide job opportunity and business legitimacy. Key considerations include maintaining a legal presence in the U.S., the need for a detailed business plan, and the potential challenges posed by political changes. It offers significant opportunities for entrepreneurs but requires careful planning and documentation.

Takeaways

• 😀 New H1B regulation allows H1B holders to sponsor themselves as business owners, starting January 17, 2025.
• 😀 The new rule permits H1B workers to own 100% of a business and sponsor themselves for an H1B visa, as long as they spend 51% of their time in a specialty occupation.
• 😀 The current regulation prevents H1B workers from fully owning a business and sponsoring themselves, due to non-specialty occupation tasks like payroll or leasing.
• 😀 Businesses sponsoring H1B visa holders must be a legal entity (e.g., LLC, S-Corp, C-Corp), not just a sole proprietorship.
• 😀 The company must offer a Bonafide job opportunity, meaning there must be a legitimate, specialty occupation role to support business operations.
• 😀 USCIS will scrutinize self-sponsorship by requiring documentation such as business plans, contracts, and licenses to prove legitimacy.
• 😀 The initial and first extension for an H1B from a beneficiary-owned business will be granted for only 18 months, instead of the typical 3 years, to ensure the business is viable.
• 😀 H1B holders who start a business while on OPT or STEM OPT may be eligible to sponsor themselves, but they need to prove their business is directly related to their field of study.
• 😀 Self-sponsorship through a PERM process is complicated if the owner controls the business, as they must prove the job is available to US workers.
• 😀 The Biden Administration's H1B changes could be impacted by future administrations, especially with a possible shift to more restrictive immigration policies.

Q & A

What is the new regulation regarding H1B sponsorship for businesses owned by H1B workers?

The new regulation, set to take effect on January 17, 2025, allows businesses owned 100% by an H1B visa holder to sponsor themselves for an H1B visa, as long as they spend at least 51% of their time performing specialty occupation work.

Why have H1B holders historically struggled to start their own businesses?

H1B holders have struggled because many of the duties associated with running a business, such as negotiating contracts or handling payroll, are not considered specialty occupation work, which is a requirement for maintaining H1B status.

How does the new regulation differ from the previous guidelines regarding H1B holders owning businesses?

Under previous guidelines, H1B holders could own a business but had to spend 100% of their time on specialty occupation work. The new rule allows for up to 49% of time to be spent on non-specialty duties, as long as the majority (51%) of time is dedicated to specialty occupation work.

What requirements must a business meet to sponsor an H1B visa holder under this new regulation?

The business must be a legitimate legal entity (e.g., LLC, corporation), have a valid IRS tax ID number, provide a bona fide job opportunity, and demonstrate that the position requires specialty occupation work. Additionally, it must be amenable to service of process.

Can a sole proprietorship sponsor an H1B visa holder?

No, a sole proprietorship cannot sponsor an H1B visa holder. The business must be a separate legal entity, such as an LLC or corporation.

What does the term 'bona fide job opportunity' mean in the context of the new regulation?

A bona fide job opportunity means that the business must have a legitimate, real job opening that aligns with the company’s core operations and requires specialty occupation expertise. The job must not be created solely to sponsor an H1B visa holder.

What is the initial duration of an H1B visa granted under the new rule for a beneficiary-owned business?

The initial H1B visa for a beneficiary-owned business will be granted for only 18 months, with a possible extension of another 18 months. After this period, the visa can be extended for the usual three-year increments.

Can H1B holders sponsor themselves for a green card through the PERM process while owning a business?

It is challenging for H1B holders to sponsor themselves for a green card through the PERM process if they are the majority owner of the company, as PERM requires proving that the job is available to U.S. workers. However, alternative self-sponsorship options, such as the EB2 National Interest Waiver (NIW) or EB5 Investor Visa, may be available.

How will USCIS verify the legitimacy of businesses applying for H1B sponsorship under the new rule?

USCIS will verify the legitimacy of the business by ensuring that the job is a real, bona fide opportunity, and that the business has legitimate contracts and operations. Additionally, the business must pay prevailing wages and maintain compliance with all regulatory requirements.

What options are available for individuals on OPT or STEM OPT who wish to start a business and self-sponsor an H1B visa?

Individuals on OPT or STEM OPT can start a business as long as it is related to their field of study. If the business is legitimate and aligns with the specialty occupation requirements, they may be able to sponsor themselves for an H1B visa through the lottery, though careful documentation and compliance with OPT regulations are crucial.