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Disclaimer: This article is for informational purposes only and does not constitute legal advice. U.S. immigration laws are strict and subject to change. Always consult with your university's Designated School Official (DSO), Responsible Officer (RO), or a qualified immigration attorney before taking any active steps toward starting a business.

Starting a business as an international student in the U.S. is possible, but the federal government . That single fact shapes everything. If you hold an or , you cannot simply launch a company and start operating it. You need work authorization first, and the rules differ significantly between the two visa types.

This article breaks down what you can and cannot do, which employment authorization options exist, how to access capital, and what happens after your student status ends.

F-1 and J-1 Status: Work Authorization Basics

Under immigration law, "employment" means any services performed for compensation, including self-employment. Even unpaid work counts if it displaces paid workers. is considered employment.

Both and students can work during the academic year and full-time during official breaks. No separate authorization is required for on-campus jobs.

Off-campus employment is . This includes remote work for a non-U.S. business while you are physically in the United States. Unauthorized work can terminate your visa status and damage future immigration applications.

Passive Investment vs. Active Work

You can invest money without work authorization. Buying stocks, bonds, real estate, or even shares in a business is permitted. Receiving dividends or profit distributions is fine. The line gets crossed when you perform labor or manage operations.

USCIS looks at whether you are doing "work," not whether you own shares. Ownership alone is legal. Running the company is not.

Government agencies during visa applications. LinkedIn, resumes, and incorporation records are checked. Social media posts showing you actively managing a business without authorization can result in visa denial or status termination.

What You Can Do Without Work Authorization

Several preparatory activities are permitted while you develop your business idea:

• Writing a business plan

• Conducting market research and customer discovery

• Forming an LLC or corporation

• Opening a business bank account

• Filing for trademarks or patents

• Networking and seeking investors

• Participating in entrepreneurship courses and pitch competitions

You cross into unauthorized work when you provide services to customers, manage employees, operate the business day-to-day, or sign contracts as a company officer. Any activity generating income from your labor requires authorization.

Volunteering and Unpaid Work

Unpaid internships are allowed if they meet . The position cannot displace paid workers, and you cannot receive compensation of any kind.

Working unpaid at your own company still counts as unauthorized employment. The government does not distinguish between paid and unpaid work when it comes to your own business operations.

Writing a Business Plan and Meeting Regulations

The for all entrepreneurs. University entrepreneurship centers also provide guidance, and coursework can support your planning without triggering work authorization requirements.

When you register your business, you will need state-level LLC or corporation filing, a federal Employer Identification Number (EIN) from the IRS, and possibly local business licenses. The Corporate Transparency Act now requires beneficial ownership reporting for most entities.

The of all U.S.-sourced income. Business income is taxable regardless of visa status. Tax treaties may reduce obligations depending on your home country.

Funding Options and Capital Access

International students face significant barriers to traditional financing. As of March 2025, the SBA for its 7(a) and 504 loan programs. Even lawful permanent residents (green card holders) are now excluded. and visa holders do not qualify for federal small business loans.

Alternative funding sources include:

• Angel investors and venture capital

• University startup grants and pitch competition prizes

• Personal savings and family funding

• Private lenders (typically higher rates and stricter terms)

• Home country financing with currency considerations

Many university programs offer equity-free grants. Stanford's BASES 100K Challenge, MIT's $100K Entrepreneurship Competition, and similar programs are open to international students.

Employment Authorization for F-1 Students

have two primary pathways to work authorization for entrepreneurship: Curricular Practical Training (CPT) and Optional Practical Training (OPT).

Curricular Practical Training (CPT)

CPT must be . It requires school authorization and a job offer letter. For self-employment, you need a co-founder or entity that can establish an employer-employee relationship. Your academic department must approve the arrangement.

CPT can be part-time or full-time. If you use more than 12 months of full-time CPT, you lose eligibility for OPT.

Optional Practical Training (OPT)

OPT provides 12 months of per degree level. You can use it before graduation (pre-completion) or after (post-completion). The work must relate to your field of study.

Self-employment is permitted on OPT if properly structured. You must maintain documentation proving active business engagement related to your degree. You can use pre-completion OPT after one academic year in . Time used pre-completion reduces your post-completion availability.

STEM OPT Extension

Students with qualifying STEM degrees can add 24 months through the . This requires a formal training plan with an E-Verify employer.

Self-employment alone does not qualify for STEM OPT. You must have a supervisor at a registered E-Verify company. This is a significant limitation for student entrepreneurs.

Employment Authorization for J-1 Students

face stricter rules. The primary work authorization option is Academic Training (AT).

Academic Training (AT)

AT is available for up to for undergraduate and master's students. PhD students can receive up to 36 months. The work must directly relate to your field of study and requires a job offer with a training plan and direct supervision.

Key differences from OPT:

• under Academic Training

• No unemployment grace period (OPT allows 90 days)

• Work must be , not fully remote

• No cap-gap protection if transitioning to H-1B

Starting your own business is for using Academic Training. The requirement for a supervisor and formal training plan eliminates self-employment as an option.

holders pursuing entrepreneurship must explore changing status to or another visa category, or return home first. The two-year home residency requirement that applies to some holders adds another layer of complexity.

After OPT or Academic Training Ends

When your student work authorization expires, several options exist for continuing your business in the U.S.

H-1B Visa

The H-1B requires employer sponsorship. Your own company , but you must prove a legitimate employer-employee relationship exists. This typically requires a board of directors or other entity that can hire, fire, and supervise you.

The H-1B is subject to an annual lottery and cap. You must be paid the prevailing wage for your position and location.

O-1 Visa

The O-1 has no lottery and no annual cap. It requires evidence of extraordinary ability through awards, publications, media coverage, or other achievements. There is no degree requirement.

You cannot self-petition for an O-1. You need a sponsor or agent. However, the visa can be , making it attractive for founders who qualify.

International Entrepreneur Rule (IER)

The IER provides (two 30-month terms). You must own at least 10% of a U.S. startup formed within the past 5 years.

To qualify, you must demonstrate significant investment: minimum or $124,429 in government grants (FY2025 amounts). These thresholds adjust every three years for inflation.

The IER is not a visa. It is discretionary parole status. It does not directly lead to a green card, and you cannot change status while on parole.

E-2 Treaty Investor Visa

The E-2 requires substantial personal investment in a U.S. business. It is only available to citizens of . You cannot transition directly from or status to E-2. The visa is renewable but does not lead to a green card.

EB-5 Immigrant Investor

The EB-5 provides a path to permanent residency through investment. The minimum is $800,000 in targeted employment areas. The process is complex, expensive, and lengthy, but it is the only investment-based option that leads directly to a green card.

University Entrepreneurship Programs

Several universities have developed programs with international student visa considerations in mind.

Programs With Built-In Visa Solutions

Washington University's allows and students to own and operate on-campus businesses. This counts as on-campus employment, avoiding the need for separate work authorization.

UConn's entrepreneurial programs qualify some for CPT authorization. Boise State's offers programs eligible for academic internship credit and CPT.

Major University Accelerators

Stanford offers , Cardinal Ventures, and LaunchPad. StartX takes no equity and charges no fees. It has helped launch over 800 companies.

MIT runs the and Sandbox Innovation Fund. Harvard provides Innovation Labs (i-lab), Grid Accelerator, and Blavatnik Biomedical Accelerator.

UC Berkeley's offers up to $200,000 in funding. Free Ventures provides pre-seed support for Cal students.

Most university pitch competitions and equity-free grants are open to international students regardless of visa status.

Risks and Consequences

Unauthorized work carries serious consequences. Your visa status can be terminated immediately. Future visa applications may be denied. Deportation is possible in severe cases.

Government agencies during visa applications. Consulate officers check LinkedIn, company websites, and incorporation documents. Even unpaid work at your own company counts as a violation if you lack authorization.

The consequences extend beyond your current status. Unauthorized work can affect H-1B sponsorship, green card applications, and any future immigration benefits.

Practical Steps

Before taking any action toward starting a business:

1. Consult your DSO (Designated School Official) for students or RO (Responsible Officer) for students

2. Work with an immigration attorney familiar with student entrepreneurs

3. Use academic programs to build your business foundation legally

4. Plan your visa transition strategy early, before your student status ends

5. Keep detailed records showing passive vs. active involvement

6. Document all work authorization for future immigration applications

The Bottom Line

International students can start businesses in the U.S., but the path requires careful planning. holders have more flexibility through OPT, which permits self-employment. holders face stricter limitations since Academic Training prohibits self-employment entirely.

You can do significant preparatory work without authorization: write your business plan, form your company, secure funding, and build your network. The authorization requirement kicks in when you start operating.

Plan your transition from student status to a work visa early. The H-1B lottery, O-1 evidence requirements, and IER investment thresholds all take time to navigate. University entrepreneurship programs can provide structure and sometimes creative visa solutions.

The rules are complex and the stakes are high. A misstep can end your U.S. immigration prospects. Get professional guidance before you act.