How to Start a Business as an International Student on an F-1 Visa?
If you are an international student on an F-1 visa in the United States, you may be wondering how you can start your own business. It can be a challenge to navigate the complex process of starting a business, but it is definitely an enriching experience. In this article, we will walk you through the steps involved in starting a business as an international student on an F-1 visa. Let's get started!
What is F-1 Visa?
The F-1 visa is a nonimmigrant visa that allows foreign students to come to the United States to pursue academic studies at an accredited college, university, or other academic institution. Students with this type of visa are typically enrolled in programs that lead to a degree, diploma, or certificate.
It is the most popular type of student visa, with over one million students currently enrolled in academic institutions that are authorized by the U.S. government to accept international students.
As a F-1 student, the duration of your stay in the United States will be determined by the program of study listed on your I-20 form. Once you have completed your studies, you will have a 60-day grace period during which you can remain in the United States.
You can apply for Optional Practical Training (OPT) during your studies or after you have completed your program of study. OPT allows you to work in the United States for up to 12 months, and it can be extended for an additional 24 months for certain STEM (Science, Technology, Engineering, and Mathematics) majors.
What You Can and Cannot Do on F-1 Student Visa
An F-1 Visa holder Must:
maintain a full time student status
not engage in gainful employment
An F-1 visa holder May:
Enroll in CPT
Enroll in OPT
Become passive investors in existing and new business enterprise
Get married to a U.S. citizen, a U.S. permanent resident, or other visa holders
Change their visa status to that of H, O, L, E, G or other types of visa status
An F-1 visa holder Must not:
Actively engage in gainful employment without employment authorization
Steps to Start your Business
There are a few steps you need to take in order to start your own business as an international student on an F-1 Visa.
1) Conduct market research
The first step is to conduct market research to determine if there is a need for your product or service in the United States. This can be done by talking to potential customers, conducting online research, or talking to other businesses in your industry.
You will also need to determine if there are any regulatory requirements that must be met in order to sell your product or service in the United States. For example, if you are planning on starting a food business, you will need to obtain a food license from the local health department.
You can find more information about conducting market research on the Small Business Administration website.
2) Create your business plan
Once you have conducted market research and determined there is a demand for your product or service, you will need to create a successful business plan. This document will outline your business goals, strategies, and how you plan on achieving them.
If you are planning on starting a business with another person, you will need to create a partnership agreement. This document will outline each person's roles and responsibilities, as well as how profits will be divided.
It is an important step to take before starting your business, as it will help you stay organized and on track. You need to take the time to create a well-thought-out business plan that covers all aspects of your business.
3) Fund your business
The next step is to fund your business. This can be done through personal savings, loans from family and friends, or venture capitalists.
If you are planning on seeking funding from investors, you will need to create a pitch deck. This is a document that outlines your business plan and what you are looking for in terms of funding.
Creating a pitch deck can seem daunting, but there are plenty of resources available to help you. Once you have created your pitch deck, the next step is to find investors.
One way to do this is to attend startup events. These are events where startups and investors come together to network. Another way to find investors is through online platforms such as AngelList.
Once you have found investors, the next step is to negotiate your investment terms. This includes how much money you are looking to raise and what percentage of equity you are willing to give up.
Once you have reached an agreement with your investors, then you need to draw up a contract. This contract will outline the terms of your agreement and should be signed by both parties.
4) Pick your business location
Your business location is important, as it will determine how much rent you will pay and what type of customers you will have.
You will need to decide if you want to have a physical location or if you want to operate online. If you choose to have a physical location, you will need to find a place that is zoned for commercial use.
You will also need to decide if you want to be located in a high-traffic area or if you are willing to sacrifice foot traffic for a lower rent price.
Once you have decided on your location, you will need to sign a lease agreement. This document will outline the terms of your lease, such as how long you will be renting for and how much rent you will be paying.
If you are planning on operating your business online, then you will need to set up a website. You can create a website yourself using a platform such as WordPress, or you can hire a web designer to create a website for you.
5) Choose a business structure
The structure of your business will determine how your business is taxed and how you are legally liable. There are four main types of business structures in the United States: sole proprietorship, partnership, limited liability company (LLC), and corporation.
The type of business structure you choose will depend on a variety of factors, such as the size and type of your business. You can read more about choosing the right business legal structure on the Small Business Administration website.
Once you have chosen your business structure, you will need to file the appropriate paperwork with your state. This will officially create your business and allow you to operate legally.
6) Choose your business name
Your business name is important, as it will be how customers identify your business. When choosing a name for your business, you will need to make sure that the name is not already in use by another business.
You will also need to make sure that the name is available as a domain name and that it is available to be trademarked. Once you have chosen your business name, you will need to register it with your state.
This will officially create your business and allow you to operate legally. The process of registering your business name is called trademarking.
After you have registered your business name, you will need to create a logo. This will be used on your website, business cards, and marketing materials. Business name and logo are also important for branding purposes.
7) Get federal and state tax IDs
All businesses in the United States are required to have a federal tax ID. This is also known as an Employer Identification Number (EIN).
You will need to apply for an EIN on the IRS website. The process is relatively simple and can be done online. In addition to a federal tax ID, you may also need to get a state tax ID.
This will depend on the state in which you are operating your business. You can apply for a state tax ID on the website of your state's tax agency. The process for applying for a state tax ID is similar to the process for applying for a federal tax ID.
8) Apply for licenses and permits
Once you have your federal and state tax IDs, you will need to apply for any licenses or permits that are required for your type of business. Keep your business in compliance with all the required licenses and permits, or you could face some hefty fines.
The licenses and permits required for your business will depend on the type of business you are starting, as well as the state and local regulations. The U.S. Small Business Administration has a list of licenses and permits that may be required for your business.
You can also check with your state's business regulatory office and your local chamber of commerce to see what licenses and permits are required in your area. You need to make sure that you are following all the required steps to start your business legally.
After you have obtained all the necessary licenses and permits, you will have to file for a Certificate of Authority from the U.S. Citizenship and Immigration Services (USCIS). This is required if you want to hire employees who are not on an F-1 visa.
9) Open a business bank account
The next step is to open a business bank account. This will help you to keep your personal and business finances separate. It is important to have a business bank account because it will make your business look more professional and credible.
When you are ready to open a business bank account, you will need to bring your business licenses and permits, as well as your EIN. You will also need to have a U.S. bank account in order to open a business bank account.
After you have opened your business bank account, you will need to get a business credit card. This will help you to build your business credit.
A business credit card can be very helpful when you are just starting out. It can help you to make purchases for your business and to build your business credit history.
10) Purchase an insurance policy
The last step is to purchase an insurance policy for your business. This will protect you and your business in the event of any accidents or lawsuits.
You will need to purchase a general liability insurance policy, as well as any other insurance policies that are required for your type of business. You can check with your state's insurance department to see what insurance policies are required for your business.
Once you have all of the necessary licenses, permits, and insurance, you will be ready to start your business in the United States. These are just a few of the steps that many international students take in order to start a business on an F-1 visa.
One of the most important things to remember when starting a business as an international student is to keep your business in compliance with all the rules and regulations. If you are not sure about something, be sure to consult with an attorney or accountant who can help you to make sure that you are doing everything correctly.
FAQs About Starting a Business on F-1 Visa
Is starting a business worth it?
There are a lot of things to consider when starting a business, such as the amount of time and money you'll need to invest. However, if you're passionate about your business idea and are willing to put in the work, starting a business can be a great way to achieve your goals.
What are the risks of starting a business on an F-I visa?
The biggest risk of starting a business on an F-I visa is that you could be subject to deportation, or bars to reenter the U.S. if you violate the terms of your visa.
Can I use OPT during my F-1 program?
Yes, you can use OPT during your program. When you use your OPT during your program, such as during summer break, it is called pre-completion OPT. You can use pre-completion OPT to gain work experience in your field of study this way. You must have a job offer from a U.S. employer before you can begin working. Important note: once you've accrued 11 months of pre-completion OPT, you may no longer be eligible for post-competition OPT, which you should use for work experience after you graduate.
How long can I stay in the U.S. on F1 visa?
The F1 visa allows foreign students to stay in the United States for the duration of their international education, on top of the 1 - 3 years of OPT training, plus an additional 60 days. So, if your program of study is four years long, you can generally stay in the U.S. for up to seven years on an F1 visa.
What are the benefits of an F-1 visa?
There are many benefits of an F-1 visa. For starters, it allows foreign students to come to the United States to study at accredited colleges and universities.
Additionally, it allows students to work in the United States under certain circumstances, such as during their studies and during their post-completion OPT period.
Finally, it allows students to stay in the United States for a longer period of time than other types of visas.
Can I apply for a green card as an F-1 student?
Yes, you can apply for a green card as an F-1 student. However, there are a few requirements that you must meet in order to be eligible. First, you must have been lawfully admitted to the United States with a valid F-1 visa.
Second, you must be maintaining your student status and be in good academic standing at your educational institution. Finally, you must have graduated from an accredited U.S. college or university or have earned a certificate of completion from an approved English language training program.
If you meet all of these requirements, then you can begin the green card application process by filing Form I-485 with the U.S. Citizenship and Immigration Services (USCIS).