Visa Options for Startup Founders and Entrepreneurs

Each Path Presents Unique Challenges and Opportunities for Entrepreneurs

Building a startup company in the United States can present unique immigration opportunities and challenges for foreign entrepreneurs. While the U.S. does not currently offer a dedicated visa for startup founders, several immigration pathways may allow foreign founders to live and work in the country while developing and growing their businesses. These options vary significantly in their eligibility requirements, periods of stay, evidentiary requirements and treatment of founder ownership and control.

The E-2 Visa

The E-2 visa is the most traditionally used visa category for startup founders and entrepreneurs. To qualify for E-2 classification, the applicant must be a national of a treaty country and must enter the U.S. to develop and direct an enterprise in which they have invested, or are actively in the process of investing, a substantial amount of capital. An investment is considered “substantial” when it is proportional to the cost of purchasing an existing business or establishing a new one, sufficient to demonstrate the investor’s financial commitment to the enterprise’s successful operation, and of a magnitude that supports the likelihood that the investor will successfully develop and direct the business.¹ There is no strict dollar amount required, but higher rates of success are typically seen when the investment amount crosses six figures. The investment must be placed at risk for the purpose of generating a profit and must be sufficient to ensure the successful operation of the enterprise. Additionally, the business may not be considered marginal, meaning it must have the present or future capacity to generate income beyond merely providing a living for the investor and his or her family.² Finally, the investment enterprise must be a real, active and operating commercial or entrepreneurial undertaking that produces goods or services for profit and complies with the applicable legal requirements for conducting business within its jurisdiction.³

An E-2 visa applicant outside the U.S. generally applies directly through a U.S. consulate by submitting evidence of treaty-country nationality, proof of the investment, documentation regarding the source of funds, business formation records, ownership documents and a detailed business plan. The validity period of an E-2 visa is determined by the applicable reciprocity schedule and varies by treaty country. Some countries, such as Canada, issue E-2 visas for a period of five years. However, E-2 visas are indefinitely renewable. Applicants seeking a change of status within the U.S. may file Form I-129 with U.S. Citizenship and Immigration Services (USCIS) to obtain E-2 status valid for a period of two years, with options to file extensions of stay for additional two-year periods. While this offers entrepreneurs some flexibility in their ability to continuously work in the U.S., the principal applicant is only permitted to work for the treaty enterprise. E-2 spouses may, however, work for any company in the U.S. It is also worth noting that despite Canadian citizens being visa-exempt, Canadian E-2 applicants are still required to attend visa appointments and obtain physical visas in their passports.

While there is no limit on the number of times an E-2 visa can be renewed, E-2 visa holders must maintain nonimmigrant intent, or the intent to return to their home country at the conclusion of their stay. There is not a clear path to permanent residency from E-2 status.

The O-1A Visa

The O-1A visa is a nonimmigrant category available to individuals who possess extraordinary ability in the sciences, education, business or athletics and who have achieved sustained national or international acclaim in their field. Eligibility is based on evidence demonstrating that the applicant has risen to the very top of his or her profession. For startup founders, the O-1A visa can be particularly attractive because successful entrepreneurial achievements, industry recognition, major funding rounds, publications, patents, speaking engagements and similar accomplishments may support a finding of extraordinary ability.⁴

To qualify for O-1A classification, a beneficiary must demonstrate extraordinary ability through sustained national or international acclaim and must be coming to the U.S. to continue working in the area in which the extraordinary ability has been established. Unlike the E-2 category, qualification for O-1A status does not require a specific investment amount. The regulations provide eight evidentiary criteria for extraordinary ability, of which a beneficiary must meet at least three. These criteria include:

1. Documentation of the beneficiary’s receipt of nationally or internationally recognized prizes or awards for excellence in the field of endeavor.
2. Documentation of the beneficiary’s membership in associations in the field for which classification is sought, which require outstanding achievements of their members, as judged by recognized national or international experts in their disciplines or fields.
3. Published material in professional or major trade publications or major media about the beneficiary, relating to the beneficiary’s work in the field for which classification is sought.
4. Evidence of the beneficiary’s participation on a panel, or individually, as the judge of the work of others in the same or in an allied field of specialization for which classification is sought.
5. Evidence of the beneficiary’s original scientific, scholarly or business-related contributions of major significance in the field.
6. Evidence of the beneficiary’s authorship of scholarly articles in the field, in professional journals or other major media.
7. Evidence that the beneficiary has been employed in a critical or essential capacity for organizations and establishments that have a distinguished reputation.
8. Evidence that the beneficiary has either commanded a high salary or will command a high salary or other remuneration for services as evidenced by contracts or other reliable evidence.⁵

O-1A petitions are filed with USCIS by either a U.S. employer or agent on behalf of the beneficiary. The beneficiary may not self-petition for O-1 classification. However, Department of State guidance recognizes that a separate legal entity owned by the beneficiary may serve as the petitioner, provided the entity is legally distinct from the individual beneficiary. Accordingly, a founder who owns a corporation or limited liability company may still pursue O-1A classification through that entity, so long as the petition is filed by the company rather than by the founder personally.⁶ This structure is what makes the O-1A visa a viable option for certain founders and entrepreneurs.

The H-1B Visa

The H-1B visa category is available to foreign nationals who will work in a “specialty occupation.” A specialty occupation is one that requires both the theoretical and practical application of highly specialized knowledge and at least a bachelor’s degree, or its equivalent, in a directly related field as a minimum qualification for entry into the occupation.⁷ “Directly related” means that there is a logical connection between the required degree, or its equivalent, and the duties of the position.⁸

To qualify as a specialty occupation, the position must satisfy at least one of the following criteria:

1. A bachelor’s degree in a specific specialty is normally the minimum requirement for entry into the position;
2. The degree requirement is common within the industry for similar positions;
3. The employer normally requires such a degree for the position; or
4. The duties are so specialized and complex that they are usually associated with a bachelor’s degree in a directly related specialty.⁹

The beneficiary must also demonstrate qualification for the position by possessing a U.S. bachelor’s degree in the specialty, a foreign equivalent degree, a state license where required, or a combination of education, training and progressively responsible experience equivalent to the required degree.¹⁰ Prior to filing the H-1B petition, the employer must first obtain certification of a Labor Condition Application from the U.S. Department of Labor using Form ETA-9035/9035E, which certifies that the employer will pay the higher of the prevailing wage for the employee’s specific occupational classification in the specific geographic location(s) where work will be performed.

In December 2024, the Department of Homeland Security (DHS) published a final rule modernizing certain aspects of the H-1B program to include the concept of “beneficiary-owners.”¹¹ According to the final rule, the term “beneficiary-owner” refers to an H-1B beneficiary who owns more than 50% or has majority voting rights in the petitioning company.¹² The final rule also clarified that beneficiary-owners may perform duties outside of those related to a specialty occupation, such as owning and directing the petitioner’s business, as long as the beneficiary performs specialty occupation duties for the majority of the time.¹³ Most importantly, the final rule eliminated the long-standing requirement of proving a valid employer-employee relationship and the H-1B petitioner’s control of the beneficiary’s work.¹⁴ This rule effectively made foreign entrepreneurs valid participants in the H-1B program and has wide-ranging potential benefits for the U.S. economy, innovation and the attraction of global talent.

While initial H-1B petitions may be approved for up to three years, beneficiary-owner H-1B petitions are limited to 18 months for the initial petition and first extension.¹⁵ Generally, a beneficiary may remain in H-1B status for a maximum period of six years.¹⁶ However, pursuant to the American Competitiveness in the 21st Century Act, H-1B beneficiaries pursuing employment-based permanent residency can extend their H-1B status beyond the maximum six-year limit if they either have a PERM application pending for more than one year, or an approved I-140 petition with a priority date that is not yet current.¹⁷

While an H-1B visa may be a viable option for some founders and entrepreneurs, it presents a few unique roadblocks to overcome. In addition to the prevailing wage and educational requirements, H-1B beneficiary-owners are still subject to the annual H-1B lottery for initial H-1B petitions, which allocates 65,000 regular cap H-1B visas.¹⁸ In 2025, DHS issued a final rule altering the annual H-1B lottery by implementing a weighted selection process.¹⁹ As a result of this final rule, higher-skilled and higher-paid foreign nationals are now prioritized for the allocation of H-1B visas, and individuals falling within the highest wage level in their occupational classifications are now entered into the lottery a total of four times.²⁰ This means that in order for H-1B lottery selection to be truly viable, beneficiary-owners must possess significant experience and have the resources in place to make a considerably high salary. The only way an H-1B beneficiary can bypass the H-1B lottery is if he or she is employed by an institution of higher education, a nonprofit entity affiliated with an institution of higher education, or a nonprofit of governmental research organization, or has earned a master’s degree or higher from a U.S. institution of higher education.²¹

International Entrepreneur Parole

International Entrepreneur Parole (IEP) is a less-utilized option for founders and entrepreneurs seeking entry into the U.S. to build the foundations of new businesses. Unlike the E-2, O-1A and H-1B categories, IEP is not a visa category but is rather a form of parole. This means that IEP beneficiaries cannot change their status to a formal nonimmigrant classification from within the U.S. To qualify, the entrepreneur must own at least 10% of the startup and no less than 5% after approval, as well as substantially assist the company with its growth and success.²² The startup also must be a U.S. corporation, LLC or partnership and have substantial potential for rapid growth and job creation by demonstrating one of the following:

1. Significant qualifying investment from qualified U.S. investors.
2. Significant government grants or awards.
3. Other reliable and compelling evidence of the startup’s growth potential.

The startup also must have been formed within the five years preceding the filing of the parole application.²³

Similar to the E-2 visa, IEP involves a specific investment threshold. The startup generally must show either $311,071 in qualified investments from qualified investors, $124,429 in qualified government grants or awards or alternative evidence demonstrating comparable potential for rapid growth and job creation.²⁴ An individual or organization may be a qualified investor if it is a U.S. citizen, Lawful Permanent Resident or U.S.-incorporated business that made investments in startup entities comprising a total of no less than $746,571 in a specified five-year period and, subsequent to those investments, at least two of those entities have each created at least five jobs or generated at least $622,142 in revenue with annualized revenue growth of at least 20%.²⁵

Initial parole periods are granted for a period of 30 months, with the option of applying for an additional 30-month period of re-parole. A founder can spend a total of five years building the foundations of a business in the U.S. under IEP. No more than three entrepreneurs may receive parole based on the same startup entity.²⁶ Unlike the H-1B and O-1 categories, IEP does not require a formal employer-employee relationship and is therefore highly founder-friendly.

While the IEP program may seem like a viable, short-term option for certain entrepreneurs, the program suffers from a number of practical problems. First, IEP applications are not eligible for premium processing and suffer from significantly long processing times, with some cases having been reported to take longer than one year before a decision is issued. Second, IEP affords a very limited period of authorized stay in the U.S. compared to the aforementioned nonimmigrant categories and, as IEP is a form of parole, beneficiaries are technically deportable the entire time that they are present in the U.S. Finally, as IEP applications typically require documentation regarding a history of investments from a qualified investor over the previous five years, nonparties are frequently subject to USCIS scrutiny. This requirement thus results in significant privacy concerns for U.S. citizens, lawful permanent residents and corporate investors who are ordinarily unwilling to disclose identifying information, investment strategies or prior investment portfolios. Therefore, while IEP may appear as a sound option for foreign entrepreneurs in theory, it is nearly unworkable in practice.

Takeaways

Foreign entrepreneurs have several potential options for starting and growing a business in the U.S., but the best path depends on the founder’s background, the startup’s structure and the company’s stage of development. IEP is specifically designed for high-growth startups and may appear to be a good fit for founders who have secured significant investment or government funding. However, while its benefits may sound appealing on paper, it suffers from multiple practical drawbacks. Other options, including the more often used E-2 visa, as well as the O-1A and H-1B visa categories, can also provide work authorization depending on how the beneficiary falls in line with each category’s requirements and limitations.

Ultimately, there is no one-size-fits-all immigration solution for startup founders. Rather, founders should evaluate each option in light of their education, nationality, funding sources, ownership interests, business objectives and long-term immigration goals. A careful assessment of these factors can help identify the immigration pathway that best supports the founder’s ability to launch and grow a successful business in the U.S. For many early-stage entrepreneurs, the E-2 and O-1A visa categories may provide greater flexibility, as they are generally more compatible with substantial founder ownership and control than other pathways.

Phillips Lytle Summer Associate Abigail Aderinto contributed significantly to the research and drafting of this client alert.

Additional Assistance

For more information, please contact a member of our Immigration Practice Team or the Phillips Lytle attorney with whom you have a relationship.