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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-

                        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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