Yes, a F1 visa holder in the United States can own a business; however the business cannot be operating, meaning no revenue or salary to the owner with an F-1 Visa. In the United States, a F1 visa holder can form partnerships and sign contracts on behalf of his or her company, as long as it is not considered “work.”
Have it in mind that unless you are legally authorized to work in the United States, you cannot perform work, even if it is for your own company, and even if you are not getting paid. As the company owner, you are allowed to engage in management decision – making such as hiring workers, because these decisions must be made by the business owner. However, you cannot be regularly engaged in administrative work or sales without the appropriate work authorization.
Note that signing contracts is generally fine; however, you have to be very careful of the nature of such contracts. For instance, a partnership agreement with another company is likely to be fine, but signing sales contracts with customers to sell merchandise would likely be considered “work” and be against the law for you to perform in F-1 status.
2 Ways F1 Visa Holders Can Better Protect Their Business Interest
In that case, most F1 visa holders or entrepreneurs have two options. One is to use Optional Practical Training (OPT) or acquire H-1B visa, which most people choose to do. To change from F1 to H1B, students can either change directly to H1B or take the F1 to OPT to H1B path.
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Optional practical training is a visa program that lets F1 students to work in the US for a 12 month period. Note that upon completion of undergraduate or graduate studies, F1 students may either return to their home country or participate in OPT, allowing them to gain practical experience in their major area of study. Meanwhile, Eligible F1 students who engage in pre-completion OPT, post – completion OPT, or both, may:
- Gain practical experience in their major area of study.
- Start work after receiving EAD (Employment Authorization Document).
- Stay and work in the US for 12 months
- Apply for a 17 month OPT extension if they are STEM (science, technology, engineering, math) degree holders.
- Convert to H1B visa status later.
F1 students can also choose to apply for H1B visa after graduation or during OPT. H1B visa is more or less a non – immigrant visa program that allows US employers to hire foreign workers in specialty occupations, which are professions that require theoretical and practical application of specialized knowledge along with a bachelors degree or its equivalent. H1B visa holders may:
- Work legally in the US for a period of 3 to 6 years.
- Gain practical and theoretical experience related to their field.
- Bring their spouse and children to the US on H4 visa.
- Travel in and out of US as long as valid H1B status is maintained.
- Apply for permanent residency in the US, also known as green card.
How to Change Status from F1 to H1B in 4 Steps
Indeed the goal of most International students after they graduate is to remain in the USA to gain work experience relevant to their studies. The H1B visa program is specifically designed for and made available to F1 students to achieve this goal. Also note that the USCIS even introduced a separate H1B quota (allocation of H1B visas) for International students.
In the United States, F1 students can transfer/change status directly from F1 to H1B by obtaining a suitable H1B sponsorship position with an H1B sponsor company. Howbeit, many students prefer (or find themselves requiring) to use the OPT visa program as an interim measure in the overall process of getting to H1B visa status. The following steps outline the procedure of changing status from F1 to H1B work visa.
1. Find H1B sponsoring employer
Note that whether you are looking to apply for H1B directly from F1 visa status or from OPT, you are expected to obtain a job offer from an H1B sponsoring employer in order to apply for H1B visa. This employer is also expected to be in good standing in order to demonstrate to the USCIS that the employee will be paid 95 percent of the prevailing wage of the occupation and that H1B workers will not have adverse affects on the work conditions of US workers.
2. File your H1B petition on time
Have it in mind that the USCIS maintains certain limitations on the number of H1B visas issued every fiscal year. There is an H1B visa limit of 65,000 visas under the general category and an additional 20,000 visas for those with a masters degree, doctoral degree, or higher. So to successfully obtain an H1B visa for the following fiscal year, you must file your H1B petition on time.
3. Have your employer file your H1B petition
Note that once you receive an employment offer, your employer is expected to file your H1B visa petition as ‘Change of Status’ on your behalf by the stated deadline. If your H1B visa petition is approved, you will be granted H1B status. You may start working on H1B visa status October 1 as instructed by USCIS.
4. Check eligibility for cap-gap extension
If after filing an H1B visa petition and your case is pending you may be eligible for a cap-gap extension in which you are allowed to remain on F1 visa status where your work authorization and F1 status would otherwise expire until the H1B employment is approved.
F1 students whose period of authorized stay expires before October 1 and do not qualify for a cap – gap extension are expected to leave the US or they may lose their status. Upon leaving the US, students must apply for an H1B visa at a consulate abroad and enter the US on H1B status if the petition is approved.
In general, international students in F1 status are forbidden from “engaging in business.” However, immigration law does not explicitly forbid F1 visa students from starting their own business because “preliminary business planning” is not considered “engagement.”
However, once the business is started, international students and F1 Visa holders are not permitted to operate their own business, engage in business, or receive revenue, compensation, or salary. Howbeit, immigration law allows International Students and F1 visa holders to invest in their own company and receive dividends. An income tax return will have to be filed annually if dividend income is earned. Students are able to receive dividend income because it is passive.