Can an H-1B visa holder own their sponsoring U.S. Petitioner?

Myers Immigration Law often consults with H-1B Specialty Occupation visa holders on their ability to own a minority or majority interest in the U.S. petitioner company, in addition to other creative applications of H-1B visa strategies.

Creative Applications of H-1B Visa Strategies

Creative H-1B strategies are worthwhile to consider, as the most popular temporary nonimmigrant visa for professionals.

It’s especially important considering the substantial backlog in immigrant visa or green card availability for Indian and Mainland Chinese born professionals, who must maintain H-1B status indefinitely in order to remain in the United States, but who also do not wish to be dependent upon a third party U.S. company petitioner to continue to sponsor their status.

On the rise during the Obama Administration, there were many “hack the H-1B” programs involving Entrepreneur-in-Residence Programs at Universities and private employer affiliation agreements with Universities such that H-1B employers could sponsor cap-exempt (i.e. lottery-exempt) H-1B visas.

To satisfy the requirement of an employer/employee relationship for H-1B eligibility purposes, self-employed business owners would set up an independent Board of Directors with the ability to hire, fire, and recommend other personnel actions to show independent control over the H-1B beneficiary’s work.

Exercise Caution with USCIS H-1B FAQs on Self-Employment

Self-employment has generally not been permitted for purposes of H-1B Specialty Occupation visa qualification. An employer/employee relationship must generally be established for work visas such as H-1B, TN, E-3, H-1B1, etc., which is generally shown through minority ownership at most and/or another’s ability to hire, fire, and control the work of the international professional as mentioned above.

USCIS often approves H-1B petitions involving H-1B beneficiaries who own 49% or less of their sponsoring U.S. company. Sometimes relatives would own the other 51% as a workaround as the H-1B petition does not currently inquire as to ownership by relatives.

Additionally, for now under the Biden Administration, USCIS FAQs indicate that a majority owner of a U.S. company MAY be approved for H-1B status, although it’s important to note that past administrations required a significant amount of proof of the employer/employee relationship (i.e. establishment of an independent board of directors with the power to fire, control the owners work, etc.) or did not allow this arrangement which is an important consideration to conservatively ensure future H-1B visa renewals. USCIS could return to these prior policies at an inopportune time.

Below is USCIS’s answer to the relevant question in a more comprehensive FAQs for Individuals in H-1B Nonimmigrant Status which leaves out the above crucial consideration, along with the currently proposed rule referenced below which would restrict the definition of H-1B, but potentially expand other options for international students and professionals.

Q. I have a controlling interest in a company. Can this company qualify as my petitioning employer to sponsor my H-1B status?

A. A company in which you have a controlling interest – meaning, you own more than 50% or have majority rights – may qualify as your employer and may petition for H-1B status on your behalf. In this scenario you would be both an owner of the petitioning employer and a beneficiary of the petition (a “beneficiary owner”).

Previously, more restrictive requirements on employer-employee relationships between H-1B petitioners and beneficiaries may have resulted in H-1B beneficiary owners being ineligible. However, in 2020 we rescinded the 2010 policy memorandum, “Determining Employer-Employee Relationship for Adjudication of H-1B Petitions, Including Third-Party Site Placements,” which impacted such eligibility. See the USCIS Policy Memorandum (PDF, 379.71 KB).

The Oct. 23, 2023, Notice of Proposed Rulemaking (NPRM), Modernizing H-1B Requirements, Providing Flexibility in the F-1 Program, and Program Improvements Affecting Other Nonimmigrant Workers, proposed to codify the ability of beneficiary owners to obtain H-1B status.

Conclusion

Business immigration lawyers with Myers Immigration Law are dedicated to guiding H-1B visa holders through the complexities of ownership in their sponsoring companies. While creative H-1B strategies can offer significant advantages, it’s essential to approach them with caution due to evolving USCIS policies dependent upon the presidential administration, with Obama and Biden Administration policies being substantially different than the Trump Administration as an example. Staying informed and compliant is crucial to ensuring the long-term success and maintenance of H-1B status. Contact us for personalized advice and strategic planning to help you navigate these challenges and achieve your professional goals in the U.S.

The above is informational and not intended to be legal advice. Please consult with an experienced business immigration attorney on your specific facts and circumstances before proceeding with any U.S. immigration strategy.