Ask Sophie: As an immigrant to the US, how can I create and work for my own startup?

Here’s another edition of “Ask 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 was born in India and have been living and working in the U.S. on an H-1B with my current employer for four years. I tried to apply for one of the 10,000 H-1B visa holder work permits that Canada made available in July, but I didn’t get one.

I’ve decided to move forward and found my own startup in the U.S. What’s the best way for me to be able to stay in the U.S. and legally work for my startup?

— Fledgling Founder

Hiya Fledgling!

Kudos to you for your grit and determination to continue to build and innovate in the United States. You’ve got this — and I’ve got your back!

A note to U.S. lawmakers: We are falling behind

Canada’s H-1B initiative and its overall work visa and permanent residence processes are far more appealing and effective in attracting and retaining international talent than the restrictive, complicated and backlogged immigration system individuals face in the United States.

The U.S. must enact immigration legislation that helps startup founders and merit-based workers have a clear path. This has become a national security issue: Do we want the emerging technologies of the future to be created in the U.S.?

Even state-level actors see the urgency and importance of founder immigration: California governor Gavin Newsom recently budgeted $2 million for a Global Entrepreneur in Residence (GEIR) pilot program in the University of California system. The program aims to attract and retain international talent by enabling the UC system to sponsor visas for individuals to build startups.

Immigration vs. corporate law

Creating a strong foundation for your startup under corporate law and creating a strong startup to sponsor you for a work visa or green card under immigration law focus on different things. Because of that, I recommend you work with both an immigration lawyer and a corporate lawyer for guidance.

During a chat with Michael Avent, a partner at multinational law firm Perkins Coie who works with emerging growth startups and VCs, he emphasized it’s crucial for prospective founders to keep in mind the proprietary inventions and assignment agreement that they likely signed with their current employer.

Avent said one of the first things he does when meeting with prospective founders if they are currently working for a company is to go through the proprietary inventions and assignment agreement. “One of the things that we always think about at the earliest stage — even pre-company — is protecting the IP that’s going to form the foundation of the business and that can be complicated if you’re working someplace else.”

Things get complicated with immigration law, too, since you cannot do any work for your startup without a work visa or other work authorization. Your H-1B usually authorizes you to work only for the company that sponsored your visa — your current employer. Working to get your startup off the ground without the proper work authorization could have a detrimental impact on your ability to remain in the U.S. and any future visas or green cards you apply for.

However, there are things you can do that are not typically considered work, such as attending business meetings with prospective hires or investors or signing contracts. Ask your immigration lawyer about other activities you want to engage in to set up your startup to find out if they are allowed.

Avent also highlighted a few things that will have a huge impact on your future as a founder and on that of the company that you should stay on top of as a founder. For example, he talked about the importance of meeting the filing deadline for Section 83(b), which enables a founder to be taxed on the equity in their startup on the date it was granted rather than when it vests.

It can be “catastrophic to founders and their company if the 83(b) filing is missed,” he says, meaning potentially “hundreds of thousands [in] tax liability for the founder and withholding for the company.”

In addition, Avent emphasized that founders pay close attention to the dilutive impact of a convertible security or SAFE (simple agreement for future equity) or multiple SAFEs. “You can inadvertently give away more of your company than you want if you don’t understand the mechanics.”

Get the H-1B transfer process started

Recent case studies of approved founder H-1B transfers include petitions approvals for CEOs and CTOs, for both part-time and full-time roles. It can even get approved if it’s for the company’s first employee, even if the startup is pre-revenue. The U.S. Citizenship and Immigration Services (USCIS) even recently changed website guidance that makes it easier for founders with large equity holdings to demonstrate the employer-employee relationship.

Your startup can transfer your H-1B visa from your current employer once your startup has been created. Your attorney will first get your startup’s Federal Employer Identification Number (FEIN) verified by the U.S. Department of Labor’s Office of Foreign Labor Certification.

Then your attorney will file a Labor Condition Application (LCA) with the Labor Department to verify your startup will pay the H-1B transfer candidate the prevailing wage based on the job and geographical location of the job. The LCA aims to protect both American and foreign workers. There are posting requirements for various documents that can be accomplished digitally depending on whether your startup has a remote or physical office.

If the Labor Department certifies the LCA, your startup can submit an H-1B petition to the USCIS. Your startup can file the petition with premium processing to ensure that the USCIS makes a decision or issues a request for information within 15 days. If you have maintained valid H-1B status, you can begin working when your startup receives a receipt notice from USCIS.

Keep in mind that the maximum stay in the U.S. on an H-1B is typically six years cumulatively across all employers unless you reach certain milestones in the green card process. Given that you have about two years left on your H-1B, you should apply for an EB-1A extraordinary ability green card soon — or have your startup sponsor you for one. (Individuals can submit an EB-1A application on their own or employers can sponsor an individual and submit an EB-1A application on their behalf.) The EB-1A green card has the shortest wait time for individuals born in India. If you don’t qualify for an EB-1A yet and simply need to get a priority date because you don’t have one yet, consider the EB-2 NIW category.

Try to obtain an O-1A visa

Your startup can also sponsor you for an O-1A extraordinary ability visa now or later down the road. Unlike the H-1B, an O-1A does not require a minimum salary or any filing with the Labor Department and can be filed with premium processing. The O-1A allows for an initial stay of three years and has no limit on the number of renewals, which are given in one-year increments.

However, the requirements for the O-1A are more stringent than for the H-1B — and require more evidence. Check out this previous Ask Sophie column in which I dive into how to meet each of the eight O-1A criteria.

The O-1A is a great steppingstone to an EB-1A green card since many of the criteria for each overlap.

I wish you all the success 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.

Sophie Alcorn, founder of Alcorn Immigration Law in Silicon Valley, California, is an award-winning Certified Specialist Attorney in Immigration and Nationality Law by the State Bar Board of Legal Specialization. Sophie is passionate about transcending borders, expanding opportunity, and connecting the world by practicing compassionate, visionary, and expert immigration law. Connect with Sophie on LinkedIn and Twitter.

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!