In its 2023 Open Doors report, the Institute of International Education (hereinafter "IIE"), reported that over one million foreign students studied in the U.S. during the 2022-23 academic year and that the U.S. was the top destination for international study.1 This represented a 12% increase in the number of foreign students over the prior year and the highest growth rate in over forty (40) years. These students contributed more than $40 billion dollars to the U.S. economy during the 2022-23 academic year.2 Additionally, more than two out of five Fortune 500 companies in the U.S. were founded either by foreign born entrepreneurs or their children.[i]
Because of the profound impact that foreign students have on the U.S. economy, it is in the interest of the U.S. to retain that talent in the U.S. While it is common for recent graduates to face some struggles in establishing their careers, foreign students have the added challenge of learning, navigating, and often times educating others, in U.S. immigration law. Schools often struggle to support their international students in these efforts.
One way that schools can help their students make this transition, and support their long-term career goals, is to establish Entrepreneur in Resident (EIR) programs. These programs leverage the intricacies of the H-1B regulations to provide a pathway to entrepreneurial students to transition from student to H-1B worker in the U.S.
The H-1B classification is one of the most in-demand work visas in the U.S. Its popularity is due, in part, to its flexibility as it is available to anyone working in a specialty occupation (i.e., a position that requires at least a bachelor's degree in a specific field). However, as the H-1B visa has some limitations, especially for those who wish to work for a private for-profit employer, foreign-born students may wish to consider H-1B "cap exempt" employment including Entrepreneur in Residence (EIR) programs.
H-1B Cap-Exempt Employment
Most U.S. employers are considered H-1B cap-subject employers which means that they are subject to the annual numerical limitation (or 'cap') that the US government has placed on allocations of H-1B visas (65,000 per year + an additional 20,000 for master's level students). If an H-1B cap-subject U.S. employer wishes to sponsor a foreign national who has never been counted against the numerical H-1B limitation (by being selected in the H-1B lottery selection process), the U.S. employer is required to register the foreign national for the H-1B lottery held in March. However, certain U.S. employers are exempt from the annual cap which means that they are not limited to the annual allocation of H-1B visas. These employers may file H-1B petitions for qualified foreign nationals at any time without having to register the foreign national in the H-1B lottery. H-1B cap-exempt employers3 include:
- Institutes of higher education as defined by 20 U.S.C. § 1001(a).
- Nonprofit entities affiliated with, or related to, institutions of higher education; and
- Nonprofit or government research organizations.
Since these U.S. employers are cap-exempt, they can file H-1B petitions on behalf of foreign nationals immediately and throughout the fiscal year.
Concurrent H-1B Employment
The H-1B category also allows for concurrent employment, which means an H-1B beneficiary may work for more than one U.S. employer at the same time.4 However, each U.S. employer must file its own H-1B petition on behalf of the foreign national, which reflects the specialty occupation work available to the foreign national. If a foreign national is employed with an H-1B cap-exempt U.S. employer, the foreign national is eligible to be sponsored immediately by an H-1B cap-subject U.S. employer without having to register and participate in the H-1B lottery selection process. This flexibility remains available, as long as the employment with the H-1B cap-exempt employer continues without interruption.5
Entrepreneur in Residence (EIR) Programs
As a way to retain the global talent in the U.S., some higher education institutions are establishing Entrepreneur in Residence (EIR) programs. These programs allow graduates to work part-time for the college or university in a cap-exempt H-1B position. Cap-exempt positions often require approximately ten to fifteen (10-15) hours per week and use the remaining hours in H-1B concurrent employment to work for their own start-up or another private employer.
To establish an EIR program, the college or university will want to consider its own objectives and goals. It will also want to identify ecosystem partners both within the college and externally in its community. This can include established EIR programs such as those run by Global Detroit or Global EIR. Schools should also work with a knowledgeable immigration attorney as it establishes the EIR program and also while selecting candidates for inclusion in the program. Immigration attorneys can provide support including guidance on how to file the necessary petitions with the USCIS as well as to keep the university aware of upcoming regulatory or legal changes they may face.
On an individual level, once a candidate is selected for inclusion in the EIR program, the college or university will want to establish clear expectations of what it needs from the foreign national to remain in the program as well as what options the candidate will have once their participation in the EIR program ends. This includes evaluation and compliance reviews with the H-1B worker as well as other types of support such as access to the materials and the space needed for the H-1B worker to do her job. Finally, the school should also work with the EIR participant to develop an exit strategy. This could involve things like transitioning to another visa classification or finding a new employer.
Conclusion
Although EIR programs require considerable effort on the part of colleges and universities to establish, studies have shown that can be a way for foreign nationals to build viable businesses in the U.S.
The U.S. remains one of the most popular destinations for foreign nationals to study at a post-secondary degree level as well for pursuing entrepreneurial endeavors. Because the U.S. lacks a visa category solely for entrepreneurs, one thing schools can do to support their international students who are interested in pursuing the entrepreneurial path is to establish EIR programs to help their students transition from students to successful entrepreneurs.
Footnotes
1. Opendoors: Report on International Exchange, Institute of International Education (IIE), available online at: https://opendoorsdata.org/annual-release/international-students/
2. Stewart, Erica, New NAFSA Data Reveal International Student Economic Contributions Continue to Rebound, National Association of International Educators (NAFSA), November 13, 2023. Available online at: https://www.nafsa.org/about/about-nafsa/new-nafsa-data-reveal-international-student-economic-contributions-continue#:~:text=Washington%2C%20November%2013%2C%202023%20%E2%80%93,by%20nearly%20%246.3%20billion%20(almost
3. Note: Individuals who are not employed directly with the qualifying institution may still be eligible for H-1B cap exempt employment if their employer can show the will spend a majority of their time performing duties at a qualifying entity and that the work will predominately further the essential purpose, mission, objectives or functions of the qualifying entity. See 8 CFR 214.2(h)(8)(iii)(F)
4. 8 CFR 214.2(h)(8)(iii)(F)(6)
5. Once employment with a cap-exempt employer ends so does the ability to work concurrently with a H-1B cap-subject employer. If the foreign national wishes to work solely-for a cap-subject employer, he will need to go through the H-1B cap registration process before being able to do so.
i. See the American Immigration Council's 2023 Report titled New American Fortune 500 in 2023 available at: https://www.americanimmigrationcouncil.org/research/new-american-fortune-500-2023
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