Immigration for international students

OPT for Startup Founders

By Annie Blay

February 7, 2023

OPT for Startup Founders

Optional Practical Training (OPT) allows F-1 international students to work in the United States for up to twelve months. In many circumstances, F-1 visa holders with OPT (or STEM OPT) can launch and work for their startup.

Basics of founding a U.S startup as a non-citizen

The U.S. is seen as the land of opportunity for many foreign nationals. Creating a U.S.-based business brings them closer to U.S. capital, top accelerators, U.S. markets, and a diverse community of like-minded professionals. Yet launching a U.S.-based startup often feels difficult even for immigrants already in the U.S. because of the country’s strict immigration policies.

You do need to be careful when launching a U.S. company as a non-citizen. The last thing you want is to risk an immigration violation. Luckily, it is possible to found a U.S. company without violating your immigration status, as long as you follow some guidelines.

Launching a U.S. startup before OPT

Activities to avoid if you don’t have work authorization for your startup: Until you are legally authorized to work for your company, you’ll want to avoid being paid by your startup, working full-time or part-time, or engaging in everyday work at the company. Many founders choose to co-found their company with an American green card holder or citizen so that their co-founder can handle day-to-day operations while the immigrant founder works on securing work authorization.

Activities you can be involved with before your OPT is approved: There are several things you can do for your startup even if you do not yet have work authorization, including:

Incorporating a U.S. company, applying for an EIN, establishing a mailing address, and applying for a business license
Conducting market research and customer discovery
Discussing planned investments and purchases with prospective co-founders
Attending and participating in business meetings
Developing business relationships, such as meeting with investors and clients
Negotiating contracts
Generally, you can do all these things whether you’re currently studying full-time on F-1 status, working on CPT or OPT at another company, or working on another U.S. visa.

Working for your startup on OPT

You can work for your startup on OPT as long as:

Your startup is legally incorporated in the U.S.
Your role (or job duties) are related to your degree.
In addition, you’ll need to complete the following to begin working for your startup on OPT:

1: OPT employment authorization

Before you can get started, you will need to apply for an OPT employment authorization document (EAD). It can take months to receive an EAD from the government, so begin the process early.

2: Job offer

You’ll need to obtain an official job offer letter from your startup.

3: E-Verify

Your startup needs to be registered on E-Verify before you can begin working.

4: Update the university

Update your university on your plans to work for your startup so that they can update your SEVIS records.

Other recommendations:

It is strongly recommended that you establish a Board of Directors if you own more than 50% of your company. This establishes an employer-employee relationship and shows USCIS that you are not self-employed.

In addition, immigration attorneys recommend having a U.S.-based supervisor.

Working for your startup on STEM OPT

The STEM OPT extension allows F-1 holders with a STEM degree to work in the U.S. for an additional two years after their OPT. The process of beginning work at your startup on STEM OPT is similar to the process above for OPT.

Alternative work visa options

Perhaps your OPT has already expired, or you want to work in a role that does not directly relate to your degree. Either way, there are several other work authorization options, including the following.

H-1B visa: The H-1B is a natural next step for many international students. Despite its limitations (annual cap, maximum six years validity, and strict requirements), the H-1B remains a top choice for startup founders.

O-1A visa: Didn’t finish your Bachelor’s degree? No problem. The O-1A has no degree requirements, minimum wage, annual cap, or extension limit. Although it’s a highly competitive visa for “extraordinary” talent, many early-stage founders qualify.

E-2 visa: Did you know that you can get a U.S. visa by investing in your startup? Well, you can, through the E-2 treaty investor visa. Nationals of certain treaty countries qualify, depending on their investment amount.