A Roadmap for International Student Entrepreneurs (Pt. I)
The journey from an F-1 international student to a successful entrepreneur is not easy. In this article, we will discuss a few legal pathways for international students to achieve their entrepreneurial dreams in the USA. From one F-1 entrepreneur to another :-)
OPT (Optional Practical Training)
Types of OPT
The Optional Practical Training (OPT) program allows students to engage in temporary employment to gain practical experience in their fields of study. Students can run businesses during OPT as long as the business is directly related to what the student studied in their program of study. There are three types of OPTs. Pre-completion OPT is used for students who wish to work before their program completion; Post-completion OPT is for those who seek to work after their program completes. Post-completion OPT is much more well-known and commonly used.
The third type of OPT is called a STEM OPT extension. This type of OPT is only available to students who majored in STEM fields. STEM OPT extension allows the student to apply for an additional 24 months of training period after the completion of their post-completion OPT. During this period of time, an F-1 student may engage in self-employment. However, it is much more difficult. This is because STEM OPT imposes more obligations on the student’s employer. Namely, the employer must provide an I-983 Training Plan, enroll in E-Verify and the employment must be paid and for at least 20 hours per week.
Important Notes:
OPT employment may not begin until USCIS approved the application for employment authorization document (EAD).
Pre-completion OPT is limited to 20 hours a week when school is in session.
Post-completion non-STEM OPT is limited to 12 months maximum per education level (if a student goes from bachelor's to master’s, they may obtain another 12 months of OPT).
For students who have used pre-completion OPT, their part-time work will be deducted from their 12 month post-completion OPT.
Unemployment during OPT is limited to 90 days. After 90 days of accrued unemployment, a student is deemed out of status.
Students should file I-765 and work with their school’s international student’s office to start the OPT application process. I-765 may be filed up to 90 days before the program end days and up to 60 days after the program end date, but must be within 30 days of the DSO’s recommendation of OPT.
Students must inform their school’s DSO of any employment changes.
For a more detailed analysis on OPT and STEM OPT, see our article An Ultimate Guide to OPT.
H-1B Visa
Every year, the USCIS randomly selects 65,000 applicants and 20,000 with U.S. master’s degrees and above to receive H-1Bs in a lottery. If a person is selected in the lottery, their employment with the H-1B employer officially starts October 1st during that fiscal year. The H-1B program allows U.S. companies to employ foreign workers in certain specialty occupations. These are occupations that require highly specialized knowledge and typically a bachelor’s degree or equivalent at a minimum. Due to its lottery nature and strict requirements, H-1B is often not an attractive option for startup founders. However, special pathways exist to provide startup founders a way to work for their own company while on cap-exempt H-1Bs.
Important Notes:
A person only has to participate in the H-1B lottery once. If an H-1B worker chooses to transfer to another employer after being selected in the H-1B lottery, they may do so without having to go through the lottery again, provided that they have worked for employer A at least for some time.
Some employers are exempt from H-1B lottery. These include:
Institutions of higher education such as universities;
Nonprofit entities affiliated with an institution of higher education, such as think tanks, and research institutions;
More than one concurrent H-1Bs is possible.
(to be continued)