Start-Up Companies and H-1B Petitions: How to Get Approvals

A “start-up company” is usually one that has just been set up, or has been in existence for a couple of years.  Usually, such entities may have problems establishing consistent business activities, revenues or profits.

We are often asked the question whether startup companies qualify for H-1B approvals, and about the likely queries such companies can expect from USCIS.  At the outset, let me say that the rules do not prevent start-up companies from filing H-1B Petitions.

Now let us examine the details.  As far eligibility to apply for H1B goes, the Petitioner has to be US person or entity, i.e., an individual, partnership, corporation, or an organization that qualifies as such an entity. US branches, subsidiaries, etc., of an overseas Company can also file H1B Petitions.

Secondly, the job should qualify for H-1B classification.  That is, it should be a “specialty occupation”, namely one that normally requires the “theoretical and practical application of a body of specialized knowledge along with at least a bachelor's degree or its equivalent.” Occupations in this category include software engineers, systems analysts, computer programmers, other computer professionals, engineers, architects, teachers, accountants, researchers, scientists, etc.

Thirdly, the individual should qualify for the job offered.  The H-1B classification is available for foreign nationals to work in the US in “specialty occupations” or as fashion models of distinguished merit and ability. A specialty occupation is one that needs a US Bachelor’s degree or equivalent as the entry level requirement. Thus, there are two standards to be met: (i) the job should require a bachelor’s degree, and, (ii) the alien should have that degree or the US or foreign equivalent of that degree.

So there are three basic things the rules insist on:  (a) a qualifying employer; (b) a qualifying job, and (c) qualifying foreign national.  Startup companies also have to deal with other critical issues such as whether there is a viable job opportunity and whether the company can sustain the H-1B employee.

Now what happens when the Petition is filed?  The items of information contained in the H-1B Petitions that alert the adjudicator about the ‘start-up’ nature of such companies, are usually the year established, current number of employees, gross income, and net income.  In most startup cases, the year established would be recent, with corresponding low levels of employees and income.  Sometimes, there would be no income at all to report, where the petitioner gives “projected” or “estimated” numbers.  These elements would make USICS curious about the viability of such entities, resulting in queries that are affectionately called Requests for Evidence, or RFEs.

Such RFEs ask for additional documentation to ensure the financial viability of the employer and the bona fides of the job opportunity, etc.  The items usually asked for are contract between the petitioner and the beneficiary (i.e., foreign national), itinerary of the beneficiary (if the employment is to take place at more than one location), contractual agreements between the petitioner and their clients, financial documents (including tax documents – federal, state, and quarterly payroll returns), payroll records, past history of H1B petitions, lease agreement, floor plans, photographs of business premises, etc.  This list is not exhaustive.  We have received H-1B RFEs that run into as much as six pages (yes, six pages!)  But we are proud to report that our success rate has been more than 99 percent, despite such RFEs.  

The employer, by themselves or with the help of an immigration attorney, should be able to prepare this extensive documentation and submit before the deadline of the RFEs.  Our approach has been to be proactive and always give USCIS more than what is asked for.  The deadlines to answer the RFEs used to 12 weeks in the past, now the USCIS gives only a month in most cases.

Conclusion

In view of our experience in helping start up entities in the field of H-1B visas, we will be happy to guide our future prospective clients.  We have obtained hundreds of H-1B approvals on behalf of start-up companies, especially in the Information Technology field.  Appropriate planning and consistency of documentation are the key issues.

Disclaimer: The information in the above article is of a general nature only and should not be taken as legal advice. Always seek professional legal advice before proceeding with your case.

Copyright: The Law Offices of Morley J. Nair, Inc.