Breaking Down the New H-1B Founder Rules: Insights from Top Immigration Attorney

Last week, I hosted an in-depth discussion with Raghavan Nagarajan, Partner at Serotte Law, to break down the significant changes to H-1B regulations that went into effect on January 17, 2024. These updates have major implications for immigrant founders, particularly regarding company ownership and employment relationships.¹

Here's a comprehensive breakdown of the key changes and what they mean for founders:

Major Changes in the New Rules

1. Removal of "Right to Control" Requirements

• The biggest change: USCIS has eliminated the requirement to demonstrate employer's right to control for H-1B founders

• You can now own 100% of your company while maintaining H-1B status

• No need for complex board structures solely to establish control

2. 18-Month Initial Approval Period

• H-1B petitions for founders with majority ownership will be approved for 18 months initially

• Can be extended for another 18 months

• After second extension, possibility of getting full 3-year approvals

3. Focus on "Bona Fide Job Offer"

• Instead of control requirements, USCIS now emphasizes having a legitimate job offer

• Must show that >50% of time will be spent on specialty occupation duties

• Remaining time can be spent on business operations/ownership duties

💡 Key Requirements for H-1B Founder Petitions

Proving a Bona Fide Job Offer

• Business plan showing clear need for the position

• Evidence of work to be performed (product roadmap, project plans, etc.)

• No specific revenue requirements, but should demonstrate viability

• Can include pitch decks, market analysis, and development timelines

Financial Requirements

• No strict minimum bank balance requirement

• Recommended: 6-18 months of salary coverage

• Various funding sources acceptable (personal funds, investment, revenue)

• Must meet prevailing wage requirements for the position

Part-Time Options

• Can maintain full-time H-1B with current employer while starting company

• Part-time H-1B (15-20 hours/week) possible for your startup

• Must still pay proportional prevailing wage for part-time work

• Keep detailed time tracking records

Practical Tips for Founders

Documentation Best Practices

• Maintain clear separation between personal and business finances

• Use time-tracking software with location data

• Keep detailed meeting minutes and corporate records

• Document all major business decisions

Salary and Compensation

• Must meet prevailing wage requirements for actual work performed

• Can receive additional compensation through profit distributions

• Be prepared to demonstrate ability to pay stated wages

• Consider part-time arrangements to reduce initial wage requirements

Job Classifications

• Choose job categories based on actual day-to-day work

• Don't fixate on CEO/CTO titles if duties align with other categories

• Understand wage levels based on job requirements, not personal qualifications

• Be realistic about minimum position requirements

Important Considerations

Timing and Political Context

• Rules effective as of January 17, 2024

• Changes would require formal process to reverse

• Future administration may interpret rules differently

• Consider maintaining traditional corporate structures as backup

Risk Management

• Document everything contemporaneously

• Consider maintaining board structure even if not strictly required

• Keep clear records of all work performed and payments made

• Ensure compliance with both immigration and corporate law

Looking Ahead & Getting Support

While these changes significantly improve the landscape for immigrant founders, navigating both immigration requirements and business building requires careful planning and support. Our growing community is here to help:

Community Resources

• WhatsApp Group: 800+ aspiring immigrant founders sharing experiences and insights

• H1B Founders Newsletter: Join 500+ subscribers receiving regular updates and analysis

• Monthly Community Calls: Deep dives into immigration strategies and founder journeys

1:1 Guidance

Having gone through this journey myself - from F1 to H1B to founding a profitable SaaS business while navigating immigration - I've opened up limited coaching hours for 2025. During these sessions, we can:

• Map out your specific founder journey

• Review business formation and growth strategies

• Navigate immigration pathways and transitions

• Build a roadmap aligned with your goals

Learn more about coaching sessions

Note: Financial assistance is available for students and those facing constraints - reach out via LinkedIn to discuss options.

1. This post summarizes our recent community discussion with immigration attorney Raghavan Nagarajan. While we strive for accuracy, immigration regulations can be complex and subject to change. Always consult qualified legal counsel for your specific situation.

I share my experience openly but do not provide legal advice - I'm happy to connect you with immigration attorneys for specific legal guidance.