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IMMIGRATION JULY 31, 2026 | The Indian Eye 34

H-1B for Entrepreneurs: Can You

Transfer Your H-1B to Your Own Startup?

CYRUS D. MEHTA & the regulations apply to entrepre- feats the petition by itself. Under 8 The rule also reflects a prac- showing that the company is active
DAMIRA ZHANATOVA neurs would give greater certainty C.F.R. § 214.2(h)(4)(ii)(4), the defi- tical understanding of how startups and the position continues to qualify.
to founders and encourage more nition of a “United States employ- actually operate. DHS recognized The 2025 rule also does not
or years, many H-1B profes- beneficiary-owned businesses to er” now expressly includes an entity that founders often need to perform relax the requisite H-1B wage re-
sionals treated a layoff as an participate in the H-1B program. In in which the H-1B beneficiary has non-specialty duties directly related quirements. DHS emphasized that
Fimmigration emergency and other words, the goal was not only a controlling interest, provided that to owning and directing the busi- nothing in the final rule changes
entrepreneurship as something to modernize the text of the regula- the entity has a bona fide U.S. job ness, especially in the early stages the Department of Labor’s admin-
they had to postpone. The January tion, but to make the H-1B category offer, a legal presence in the Unit- of growth. Those duties may include istration and enforcement of Labor
17, 2025 H-1B modernization rule more realistically usable for startup ed States, is amenable to service of signing leases, finding investors, Condition Application require-
changes that somewhat. It gives founders. process, and has an IRS tax identi- negotiating contracts, developing ments, including prevailing wage
H-1B workers a clearer path to move That matters most when an fication number. This means that a business plan, engaging with po- and wage-level rules. That is import-
into a startup they own, not because H-1B worker anticipates a termi- founder control is no longer treated tential suppliers and stakeholders, ant for founder cases because some
USCIS created a special startup visa, nation and wants to act quickly, as disqualifying on its own; the key and recruiting talent. DHS also ac- startup roles may involve a combina-
but because the rule now expressly assuming there are no other em- limitation is that the petition must knowledged that founders, like oth- tion of technical and business-relat-
recognizes the ability of beneficia- ployers willing to offer the worker still be for a genuine H-1B-caliber er H-1B workers, may perform inci- ed duties. Even in those cases, the
ry-owned petitioners to file H-1B a new position and promptly file an position. The regulation also allows dental duties from time to time. But petitioner still must comply with all
petitions on behalf of H-1B workers, H-1B extension petition. The gen- a beneficiary-owner to perform cer- the line remains important: apart applicable wage requirements. The
even when those workers own or eral H-1B portability framework tain duties related to owning and from incidental duties, any non-spe- founder-owned structure creates
control the petitioning entity. allows an H-1B worker already in directing the business, but only if cialty work must be directly related flexibility in ownership and duties,
That policy shift was inten- the United States to begin working specialty occupation duties remain to owning and directing the business, but it does not create an exception
tional. In the rulemaking just before for a new employer when the new the majority of the role. and the founder still must spend a to the LCA rules or permit reduced
President Biden left office, DHS employer files a nonfrivolous H-1B That clarification is significant majority of the time performing spe- wages.
acknowledged that existing immi- petition before the worker’s autho- because DHS expressly rejected the cialty-occupation duties authorized Some founders may also
gration pathways for entrepreneurs rized stay expires and includes an argument that the beneficiary-own- under the petition. benefit from concurrent H-1B em-
are limited and explained that the approved Labor Condition Appli- er provision constitutes unlawful That means founder petitions ployment. DHS clarified that the
beneficiary-owner provisions were cation covering the offered work. “self-sponsorship.” The rule draws should be drafted with precision. beneficiary-owner provisions do
designed to promote access to the For an entrepreneur, that means a a legal distinction between an indi- USCIS will look at all of the job du- not prevent concurrent H-1B em-
H-1B program for entrepreneurs, properly formed startup may be able vidual acting in a personal capacity ties described in the petition, the ex- ployment with multiple qualifying
start-up entities, and other benefi- to step in as the new petitioner if it and a separate business entity filing pected percentage of time devoted specialty-occupation roles, includ-
ciary-owned businesses while also is a real operating business and the as a United States employer. It also to each duty, and, in extension cases, ing with another entity in which
imposing reasonable conditions to offered role is a genuine specialty moves away from emphasizing the the time actually spent performing the beneficiary may also have an
protect program integrity. DHS occupation. traditional common-law control test those duties during the prior peti- ownership interest, so long as each
also explained that clarifying how The core legal change is that that previously made founder-owned tion validity period. A founder case petition independently qualifies and
founder ownership no longer de- H-1B petitions difficult and instead is therefore strongest when the pe- the beneficiary is otherwise eligible.
focuses the inquiry on wheth- tition clearly separates the special- That means a founder may, in some
er the petitioning company ty-occupation work from the busi- situations, continue with one H-1B
qualifies as a U.S. employer ness-building work and shows that employer while also obtaining au-
and offers a bona fide special- the specialty-occupation side of the thorization to work for a startup the
ty-occupation position. Even role remains dominant. founder owns.
when the beneficiary is the sole This change is especially im- Workers who already have
owner, the company may still portant for H-1B workers who a pending adjustment application
file an H-1B petition if it sat- want to act before or immediately may also have a separate portability
isfies the regulatory definition after termination. Under 8 C.F.R. § option under INA section 204(j). If
of a U.S. employer and offers a 214.1(l)(2), DHS may permit a grace the Form I-485 has been pending for
bona fide specialty-occupation period of up to 60 consecutive days 180 days or more, and the qualifying
position. The real question is following cessation of employment, immigrant petition has already been
not whether the founder owns or until the end of the petition va- approved or was still pending when
the company, but whether the lidity period, whichever is shorter. USCIS was notified of the new job
company is legitimate and If the worker can form the company offer after the 180-day mark and
whether the position qualifies quickly during that window, define a was later approved, the applicant
as an H-1B specialty occupa- bona fide specialty-occupation posi- may use Form I-485 Supplement
tion. tion, and document that the role is J to preserve the adjustment case
That is the key point for primarily specialized professional through a new offer of employment
laid-off or at-risk workers. A work, the new company may serve in the same or a similar occupational
software engineer, data sci- as the H-1B petitioner. The founder classification. That framework is im-
entist, product architect, or can still engage in business-building plemented in 8 C.F.R. § 245.25(a),
other professional may be activity, but 8 C.F.R. § 214.2(h)(4)(ii) which permits continued eligibility
able to form a startup and (4) provides that, where the benefi- through a continuing job offer or a
transfer H-1B employment to ciary has a controlling interest in the qualifying new job offer, including
that company if the new role petitioner, the beneficiary may per- self-employment. For startup found-
is structured as a real special- form duties directly related to own- ers, that means a new role with the
ty-occupation position. The ing and directing the business only so founder’s own company may sup-
m of founder can still perform some long as specialty-occupation duties port adjustment portability if the
CYRUS D. MEHTA & PARTNERS PLLC business-building functions, remain the majority of the role. role remains closely tied to the job
but specialty-occupation duties
There is, however, a time lim-
described in the underlying immi-
must remain the majority of itation. Under 8 C.F.R. § 214.2(h)(9) grant petition. While the adjustment
the job. The petition must es- (iii)(E), petitions filed by a U.S. em- applicant remains authorized to re-

tablish that the founder is not ployer in which the H-1B beneficiary main and work in the United States
merely “running a business,” has a controlling interest are limited through an employment authoriza-

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   
­ but is primarily performing the to up to 18 months for the initial tion document (EAD), it is prudent
€
‚   kind of specialized duties that approval, and the first extension is to maintain underlying H-1B nonim-
support H-1B classification also limited to up to 18 months. This migrant status. An individual with a
under 8 C.F.R. § 214.2(h). The means the rule creates a workable pending I-485 application remains
startup must therefore be pre- founder path on a temporary basis, amenable to removal if they do not
but not a long-term path. Startup
maintain an underlying nonimmi-
sented as a real U.S. employer
offering a real professional founders using this strategy should grant status.
2 6th Floor role, not as a shell entity creat- expect earlier extensions and should For long-term permanent resi-

    ed only to preserve status. plan to maintain strong evidence dence planning, many startup found-
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