Dear Sophie: How can I launch a startup while on OPT?

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’m an international student in the U.S. in F-1 status. I will graduate with a bachelor’s degree in computer science this May and plan to apply for OPT. I want to launch a startup. Can I do that with OPT? What options would I have after OPT to continue growing my company?

— Forward-Looking Founder

Dear Forward-Looking,

It’s so exciting to hear you’re planning ahead for your startup founder journey.

Taking this route requires planning and forethought. Consult an immigration attorney for guidance as well as precautionary measures to mitigate risks and protect you along the way.

Launching a startup on OPT

As an F-1 student with OPT work authorization (work permit), you can get your company up and running and be self-employed as long as you’re putting your degree to work. You must also work full time and have all the proper business licenses that your state requires.

You don’t have to wait until you get OPT to start setting up your company. Under immigration law, doing things like forming the legal entity for your company, pitching potential investors or negotiating contracts are not considered work, so you are allowed to do them without OPT work authorization.

A composite image of immigration law attorney Sophie Alcorn in front of a background with a TechCrunch logo.

Image Credits: Joanna Buniak / Sophie Alcorn (opens in a new window)

That way, once you’re on OPT, you will have a full 12 months to focus on operating your startup.

F-1 students can apply for OPT up to 90 days before completing their degree, but no later than 60 days afterward. Take a look at this previous Dear Sophie column on OPT and contact your university’s DSO (designated school official) for more information.

If you already know you want to maintain your startup in the U.S. and find investors here, then talk to a corporate attorney to determine how to structure the company. In general, U.S. investors want to deal with Delaware C corporations. Even though you incorporate in the state of Delaware, your startup can be based in Silicon Valley or anywhere in the U.S.

Setting up your startup properly will also enable it to register you for the H-1B lottery in March. Since it only costs $10 to register for the lottery, I suggest you to talk an attorney, ensure your eligibility and go for it as a backup to an O-1A visa, which requires demonstrating that you have extraordinary abilities or accomplishments.

For your company to sponsor you for an H-1B, you and your startup must have an employer-employee relationship, and your company must have enough funds to pay you the current wage based on your position and location while being able to cover operations. I’ve helped startups that have raised less than $100,000 to obtain an H-1B for one of its co-founders.

Having an employer-employee relationship with your startup means that you will need to find a co-founder or two. An employer-employee relationship means that your co-founder or board member must supervise you, hold you accountable for job performance and even have the ability to fire you. It can be helpful if you own less than 50% of your startup.

An employer-employee relationship will also be required for STEM OPT, the two-year OPT extension for F-1 students who graduate with a degree in an approved STEM field.

Building your startup on STEM OPT

As an F-1 student with a bachelor’s degree in computer science, you will be eligible to extend OPT for two years under STEM OPT extension. You can apply for STEM OPT as early as 90 days before your OPT work authorization is set to expire. I highly recommend filing for STEM OPT as soon as possible.

To work for your startup with STEM OPT work authorization:

  • You and your company must have an employer-employee relationship.
  • Your company must devise a training plan for you by completing Form I-983 (the training plan for STEM OPT students). Here are instructions for filing out that form.
  • Your company must be registered on E-Verify, the free online system run by the U.S. Department of Homeland Security that tracks whether individuals can legally work in the United States.

For each of the two years you have STEM OPT work authorization, your startup can enter you in the annual H-1B lottery. Read this Dear Sophie column on STEM OPT and the H-1B lottery.

Shifting to an extraordinary ability visa

I know many founders who did not initially qualify for O-1s when they were graduating, but they worked diligently to amass a suitable portfolio of accomplishments in their field to qualify.

For the O-1A extraordinary ability visa, your startup must sponsor you, and again, you and your company must have an employer-employee relationship. Or, you can be petitioned by an agent to provide an itinerary of services.

You must also meet at least three of the eight requirements for the O-1A. A few of these criteria include:

  • Receiving nationally or internationally recognized awards for excellence in your field (venture capital funding counts).
  • Having articles about you or your startup published in major trade or media publications.
  • Judging the work of others, such as serving as a judge at a hackathon.

Although U.S. Citizenship and Immigration Services (USCIS) only requires applicants to meet three of the requirements, I recommend aiming for four or more to present a strong case. Continuing to build upon your accomplishments for the O-1A will set you up for an EB-1A extraordinary ability green card too.

You’ve got this! Enjoy the ride!

— Sophie

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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. “Dear Sophie” is a federally registered trademark. 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!