The Entrepreneurial Spirit: Starting Your Own Venture as an Indian Student in the US

Written by Abhishek, MS in CS student at University of Texas Arlington

Note: The following content is for informational purposes only. It’s highly recommended to consult with an immigration attorney before taking any steps toward starting a business in the U.S.

As an Indian student in the U.S. on an F1 visa, the idea of starting your own business might be appealing, but the legal landscape can be tricky. While an F1 visa provides great educational opportunities, it comes with strict limitations on employment and business activities. However, there are pathways to entrepreneurship—if you know the rules.

Understanding F1 Visa Limitations on Business Ownership and Work

The F1 visa is issued for educational purposes and doesn’t allow for typical employment in your own business. But the key distinction to make is between ownership and active participation. While on an F1 visa, you are legally allowed to own equity in a business but are prohibited from actively working in or managing the business without work authorization.

If you’re thinking about starting a company, one common strategy is to find a U.S. citizen or permanent resident co-founder. You could hold less than 49% of the equity while your partner handles the day-to-day operations. This structure allows you to be a passive shareholder until you acquire the necessary work authorization or move to a different visa status.

Important: Actively managing, making decisions, or drawing a salary from the business is considered illegal under the F1 visa, and doing so could put your immigration status at risk.

Suggested Read: Admission Chronicles: My Journey from Hyderabad to UTA in Pursuit of MS in CS

Self-Employment During OPT

One of the few times an F1 visa holder can work in their own business is during their OPT period. OPT allows you to work in a field related to your degree after graduation. During this time, you can be self-employed, meaning you can start and work in your business if the work is directly tied to your field of study. This option is available for the initial 12 months of OPT (or 24 months if you qualify for the STEM OPT extension).

However, there are strict regulations to follow:

• The work must be related to your degree.
• You must report the details of your business and employment to your university.
• You are responsible for maintaining business records, including tax filings, invoices, and proof of work that shows it is relevant to your degree.

Failing to follow these guidelines could jeopardize your OPT status.

Must Read: Strategies for Success as an international student in the Competitive US Tech Industry

Understanding the STEM OPT Extension

For students in STEM (Science, Technology, Engineering, and Math) fields, the 24-month STEM OPT extension offers a longer window to work in the U.S. If your business is in a STEM-related field, you can continue to work in your company beyond the initial 12 months, provided you meet the following:

• Your business is E-Verified.
• The work directly applies to your STEM degree.
• You maintain detailed records to prove your business aligns with the OPT requirements.

Beyond F1: Exploring Visa Options for Entrepreneurs

For students with entrepreneurial ambitions beyond the F1 visa, transitioning to another visa status could be essential. Here are a few options:

O-1 Visa: For Extraordinary Ability:

The O-1 visa is designed for individuals with exceptional skills or achievements in their field. If you can demonstrate that you have extraordinary ability in areas such as business, science, or the arts, this visa could allow you to stay in the U.S. and actively engage in your business. The criteria for an O-1 visa are high, but if you’ve received awards, have a strong academic record, or hold patents, this may be a pathway worth considering.

H1B Visa: Employer-Sponsored Employment:

To work for a business that you own, an H1B visa may be an option, though it comes with a catch. You must prove that there’s a clear employer-employee relationship between you (the employee) and your business (the employer). This often involves setting up a board of directors or a legal entity where someone else holds decision-making authority. This structure can be complex, and it’s advisable to work with an attorney to make sure you are compliant with H1B visa requirements.

E2 Visa: Treaty Investor Visa:

Though the E2 visa is only available to citizens of certain countries, it is worth mentioning because it provides an option for entrepreneurs. India does not currently have an E2 treaty with the U.S., but if you hold dual citizenship with a treaty country, you could invest a substantial amount in a U.S. business and use the E2 visa to manage and grow that business.

Green Card and Citizenship: Long-Term Business Ownership:

The most straightforward path to freely running a business in the U.S. is through permanent residency (green card) or U.S. citizenship. With a green card, you no longer face the restrictions that come with temporary visas, meaning you can own, operate, and profit from a business without limitations. There are several ways to transition to a green card, including employment-based sponsorship, family-based sponsorship, or the EB-5 Immigrant Investor Program, where investing a significant amount in a U.S. business could lead to permanent residency.

Related Read: Resumes that Stand Out: Job Hunting Secrets for Indian Graduates in the American Market

Additional Considerations for Entrepreneurs

• Funding Your Business Securing funding as an international student can be challenging. Traditional U.S. banks may be hesitant to provide loans without a solid U.S. credit history. However, alternative funding sources like venture capital, angel investors, or crowdfunding could be viable options. Keep in mind that you’ll need to thoroughly vet any funding agreements to ensure compliance with your visa.
• Networking and Mentorship Building a network is essential to entrepreneurship. Many universities offer incubators or accelerator programs that help students launch startups. These programs often provide mentorship, seed funding, and resources that could be invaluable in the early stages of your business.
• Legal and Tax Implications Starting a business involves navigating complex legal frameworks. You’ll need to register your business, file taxes, and ensure your entity is structured properly. Consulting with both an immigration attorney and a business lawyer is critical to avoid any legal pitfalls.

Conclusion

While starting a business as an Indian student on an F1 visa comes with significant challenges, it’s not impossible. From OPT self-employment to transitioning to different visa types like O-1 or H1B, there are avenues available for ambitious students. Long-term, obtaining permanent residency or citizenship will provide the most freedom to pursue entrepreneurial goals.

Success comes from knowing the rules and planning your visa pathway carefully—so dream big, but make sure to get the right guidance along the way.