This guidance provides an overview of activities that can be performed by an F-1 student. This document does not constitute legal advice. For specific guidance on what type of employment or investment is allowable as an F-1 student, please contact your Mintz immigration attorney or the Designated School Official (DSO) at your university.
Department of Homeland Security (DHS) also provides helpful guidance regarding F-1 employment on its Study in the States web page: https://studyinthestates.dhs.gov/students/training-opportunities-in-the-united-states.
This overview discusses investment in a business as well as employment in Curricular Practical Training (CPT), Optional Practical Training (OPT), and STEM OPT (a two-year extension of OPT status for students with STEM degrees who have a job offer with an E-Verify employer).
II. INVESTMENT ACTIVITIES
It is permissible for an F-1 student to create and invest in a business in F-1 student status. Unless the F-1 student is specifically authorized by CPT employment or holds OPT work authorization, the individual cannot earn a salary or be paid dividends by the business. The business can receive funding as long as the F-1 student is not paid a dividend and is not awarded shares that have significant market value that would be considered compensation for work that was put into the business.
An F-1 student without CPT or OPT can perform certain activities for a business, such as forming the company, collaborating with co-founders, obtaining legal advice pertaining to the business, meeting with investors, performing research; developing marketing and branding materials, and developing business plans and business models.
An F-1 student with CPT or OPT can (i) earn a salary or be paid dividends by the business (subject to the restrictions described below) and (ii) perform certain activities for a business such as forming the company; collaborating with co-founders, obtaining legal advice pertaining to the business, meeting with investors, performing research, developing marketing and branding materials, and developing business plans and business models.
CPT and OPT employment specifics are further addressed below.
III. CPT EMPLOYMENT
CPT is generally available to students who have completed at least one year of academic study in a bachelor’s degree program or who are enrolled in a higher degree program. CPT employment must be authorized by the DSO, and the student must obtain an updated Form I-20 reflecting CPT employment. The Form I-20 will note whether CPT employment is part-time (20 hours per week) or full-time, and indicate the allowable duration of CPT employment.
CPT employment must be directly related to the F-1 student’s course of study.
CPT does not allow for self-employment. If an F-1 student were to request CPT employment to work at the student’s own business, they must show that their work is controlled by other individuals at the business. The F-1 student cannot have 50% or greater control of the business.
IV. OPT EMPLOYMENT
OPT is generally available to F-1 students following graduation from a bachelor’s degree or a higher degree program. The duration is typically 12 months. OPT allows for self-employment by the student’s own business, as long as the employment is full-time and is related to the student’s field of study.
V. STEM OPT EMPLOYMENT
A STEM OPT extension is available to F-1 students who have a degree in a STEM field and who have a bona fide job offer from a U.S. company (but NOT self-employment as detailed below) that is enrolled in E-Verify. A list of STEM degree fields can be found here: https://www.ice.gov/doclib/sevis/pdf/stemList2022.pdf.
The STEM OPT application must be filed to U.S. Citizenship and Immigration Services (USCIS) prior to the expiration of OPT and cannot be filed earlier than 90 days before the expiration of OPT.
STEM OPT does not allow for self-employment. A STEM OPT application requires that the student and the employer complete a Form I-983 Training Plan and submit that to the DSO for approval. The training plan requires that the employment is controlled by another individual or individuals at the student’s own business; that the F-1 student’s employment is supervised; that the F-1 student receives regular performance feedback; and that the employment is related to the field of study.
In order to qualify for STEM OPT through an F-1 student’s own business, the F-1 student cannot have 50% or greater control of the company. The equity and/or voting shares of the business must show that another individual or individuals can control the terms of the F-1 student’s employment. Moreover, the F-1 employee must be supervised by a more senior employee or by the business’s board of directors (or a comparable governing body).