Dear Sophie: Can I transfer my H-1B to a startup I founded?
Here’s another edition of “Dear Sophie,” the advice column that answers immigration-related questions about working at technology companies.
“Your questions are vital to the spread of knowledge that allows people all over the world to rise above borders and pursue their dreams,” says Sophie Alcorn, a Silicon Valley immigration attorney. “Whether you’re in people ops, a founder or seeking a job in Silicon Valley, I would love to answer your questions in my next column.”
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Dear Sophie,
I’ve been working for a large tech company on an H-1B visa for about a year and a half. I’d like to establish my own company while maintaining my current, secure job.
Can I keep working on the H-1B, found my own company, and then have my startup sponsor me for an H-1B or another visa?
— Scrappy in Santa Clara
Hi Scrappy,
You need to be very careful while navigating this process because there are many different legal requirements that you need to pay careful attention to so you comply with U.S. immigration laws. But yes, it is possible for you to own a portion of a business on H-1B, and it is possible for a founder to obtain an H-1B transfer to work at the startup.
Take a listen to a recent podcast episode in which I discuss having two H-1B jobs — or concurrent H-1Bs. Concurrent H-1Bs enable your second employer — in this case, your startup — to avoid having to go through the H-1B lottery process because you have already gone through that process with your current employer.
Consult with experienced attorneys
Be kind to your attorneys — you will need their support to navigate this process! Before you embark on creating your startup, you should review and discuss your employment contract and NDA with an employment lawyer.
Big companies often require employees to obtain their consent prior to forming a startup. You should also consult with an experienced immigration attorney when considering embarking on this path and determining how to structure your startup. The H-1B has specific requirements that you and your startup must meet to qualify.
Employer-employee requirement
As you probably already know, the H-1B visa allows you to work for a specific employer in a specific job at a specific location. That means you cannot work for or at your startup under your current H-1B. Therefore, we often advise clients not to found any startup as a sole proprietorship. There will probably need to be a corporation or a limited liability company.
You may be advised to find a co-founder or two. One of the key requirements for the H-1B that you need to keep in mind is your startup and you must have an employer-employee relationship. That means someone at your startup, such as a co-founder, must have the ability to hire you, supervise you, hold you accountable for poor job performance, and fire you, according to the terms and conditions of the H-1B.
Also, you may need to work with a corporate attorney to draft certain bylaws, and it can be helpful if you personally own less than 50 percent of your startup. All of these things depend on the specific details of your situation, so definitely talk to experienced attorneys to guide you through, step by step!
Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)
Salary requirement
Your position and your startup must meet other requirements for an H-1B. To qualify for an H-1B, the future position must meet the definition of a “specialty occupation.” That means your position requires theoretical and practical application of highly specialized knowledge.
It also means you must have at least a bachelor’s degree or equivalent experience in a field that’s directly related to the position.
Moreover, your startup must be able to pay you the prevailing wage for the position and for the location where your startup or the position is based. Prevailing wages, which are determined by the U.S. Department of Labor, are broken down into four levels based on experience, with Level I being an entry-level position and Level IV being the most experienced.
Before filing an H-1B petition on your behalf to U.S. Citizenship and Immigration Services (USCIS), your startup’s immigration attorney will have to first submit a Labor Condition Application (LCA) for certification by the Labor Department of Labor. An LCA seeks to ensure that the wages and working conditions of American workers are not negatively impacted by an H-1B position.
Equity in a company and stock options are not considered wages in the H-1B context. Therefore, your startup will need to show that it can afford to pay you the prevailing wage as well as support business operations.
If you’re pre-revenue, this can be shown by a business plan plus your bank statements showing your runway from an initial investment. The amounts required depend on the details of your company’s situation.
Other things to keep in mind
There are no restrictions on the number of hours an individual on an H-1B must work. An H-1B position can be full-time or part-time or involve working just a few hours a week. Take a listen to my podcast on best practices for submitting a strong H-1B petition.
Concurrent H-1B employment can last as long as the original H-1B with your large tech employer. If you want to remain permanently in the United States, you or one of the companies sponsoring your H-1B should apply for a green card at least a year before your sixth year on the H-1B. (If you apply for a green card before your sixth year on an H-1B, the sponsoring employer can continue to extend your H-1B beyond six years until you receive your green card so you don’t have to leave the United States to apply at a U.S. embassy in your home country).
If you want to apply for a green card on your own, consider the EB-1A green card for individuals with extraordinary ability or the EB-2 NIW (National Interest Waiver) for individuals with exceptional ability.
Other employment-based green cards, such as the EB-2 green card for professionals holding advanced degrees and EB-3 for skilled workers and professionals, require an employer to sponsor you as well as the PERM process, which can be challenging if you own substantial equity in the company.
Check with your current employer to find out if the company is willing to sponsor you for a green card. Depending on the timing, you might be able to bypass a second H-1B completely, avoiding the employer-employee relationship restrictions with your startup venture.
The work permit that comes in the I-485 adjustment of status process is unrestricted as to the type of employment in which you can engage!
Wishing you the best on your journey,
Sophie
Have a question for Sophie? Ask it here. We reserve the right to edit your submission for clarity and/or space.
The information provided in “Dear Sophie” is general information and not legal advice. For more information on the limitations of “Dear Sophie,” please view our full disclaimer. You can contact Sophie directly at Alcorn Immigration Law.
Sophie’s podcast, Immigration Law for Tech Startups, is available on all major platforms. If you’d like to be a guest, she’s accepting applications!
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