It’s 2am on a Monday morning; René is on his 3rd cup of coffee since the Sunday Night Football game ended, and he’s studying for midterms… sort of. His book and notes are off to the side because he and his roommate are working on something that is critical to their startup’s potential success. His American roommate and business partner looks up and says, “Hey, did you ever check with the International Student Office to see if you can legally start this business?” René pauses and thinks to himself, “Of course I didn’t check… I’m trying to figure out how to conquer the world!”

Over the next few hours, René’s roommate’s words keep echoing through his head, and René thinks to himself, “If I can’t start a business now, what will happen to all my hard work and sleepless nights?” The next morning, René goes straight to the International Student Office and asks, “Can I start a business as an F-1 student?” The secretary says, “You cannot work until you graduate and get OPT.” René walks out perplexed, asking himself: “Does starting a business really mean that I am working? Who do I call about this… Ghostbusters? Crisis Services? ICE? The government?” STOP!

The common belief is that as an F-1 student, you can only go to school to pursue a full course of study towards a degree and that you may not work without prior authorization from USCIS. If you get caught working without USCIS authorization, you will have failed to maintain your F-1 status and may have to leave the U.S. You may even be deported, which is not a fun experience.

In fact, exactly which activities constitute “unauthorized employment,” and therefore “work,” is somewhat of a gray-area in immigration law. Unauthorized employment is generally regarded as any service or labor you perform for an employer within the US—or for a foreign employer that benefits US customers—that has not been authorized by USCIS. However, immigration law does not provide a clear definition of “employment” as it relates to F-1 students.

Based on more than 25 years of helping immigrant entrepreneurs like René navigate immigration law, I have developed some guidelines for activities you may undertake that do not violate your F-1 status.

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One way to understand what you can do is to know what you cannot do. For example, if you are acting like an investor-manager for your startup, managing operations and engaging fully in the day-to-day business activities, it is considered work and is therefore unauthorized employment. For instance, you cofounded a company with a US citizen. You write code, you hire other engineers in the US, you conduct meetings, and you direct your employees. In this case, you would be working without authorization. However, if you simply were a member of the Board of the company, along with your US citizen co-founder, and simply had Board meetings where the two of you decided to hire engineers, and your co-founder directed them, etc., then that is not unauthorized employment. That is simply you acting as a shareholder and director of the company.

On the other hand, owning a business alone does not constitute employment and, in fact, many start-up activities are permissible under an F-1 status. You can, for instance, incorporate a company, conduct market research, hold meetings, and develop products, goods, or services. In addition, raising money to fund your company through presentations and negotiations with Angel Investors and VCs would not jeopardize your F-1 status. These are passive activities and not day-to-day business duties. Again, participating in day-to-day activities of the business is not allowed.

It is irrelevant for immigration whether you get paid or not; it is the activity that you perform that is relevant. The question is whether the activities you perform for the business are activities generally performed by an employee in an “employer-employee” relationship.

The key to avoiding unauthorized F-1 activity is to create a level of separation between the daily activities of the company and the board- or shareholder-level decisions. As an F-1 student, you should avoid business activities that are more “active” than “passive.” Hiring and managing workers located in the U.S. is definitely unauthorized. However, as a principal shareholder and board member, you could elect an American officer to hire and direct U.S. workers. Furthermore, you may require that this officer present major decisions concerning day-to-day activities to the board for approval.

This may seem like semantics, but that is how the law works, and a good lawyer will advise you on what is black, what is white, and, most importantly, what is grey. What you need to understand are the costs and benefits of performing activities in the grey area. Arguably, the following are permissible business activities under your F-1 student visa:

Permissible Activities

• Engaging in commercial transactions, which do not involve gainful employment in the United States (such as a merchant who takes orders for goods manufactured abroad)
• Negotiating contracts
• Consulting with business associates
• Litigating
• Participating in scientific, educational, professional, or business conventions, conferences, or seminars
• Undertaking independent research
• Being a Member of a Board of Directors of a U.S. company
• Seeking an investment in the United States, including an investment that would qualify for E-2 investor status (see http://travel.state.gov/visa/fees/fees_3726.html).

Aside from pre- and post-start-up activities, you can certainly work for your own start-up if you qualify for Curricular Practical Training (CPT) or Optional Practical Training (OPT). You may be eligible for CPT if practical training employment is an important part of your academic program. You may also be eligible for OPT if the employment is directly related to your major area of study. Both OPT and CPT must be authorized by the Designated School Official and may be available during school or after you complete your degree.

Post F-1, you may have other options, such as the H-1B Specialty Occupation, E-2 Treaty Investor, O-1 Outstanding Ability, NAFTA “TN” Professional Visa (for citizens of Canada and Mexico), the H-3 “training visa” and, in some instances, the L-1 intracompany transfer visa. These visas may be viable options once you have completed your studies, graduated, or will no longer be in a full course of study and would like to begin working on a full- or part-time basis.

Figuring out a way to stay in the U.S. after graduation is a critical issue as it will impact your life’s future. If not done properly, it may deprive you of a lifetime opportunity of becoming one of those immigrant entrepreneurs who have and will continue to shape the U.S. economy and culture.