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Status · H-1B

The entrepreneur rule, and the two pathways to self-sponsorship

Owning the company is not the problem. Who controls your employment—or how your bona fide job offer is structured under 89 FR 103054—is. Here is how the traditional board path and the January 2025 Modernization Rule path compare.

published 28 July 2026 · verified 18 August 2026

PATH A: INDEPENDENT BOARD Common-Law Control Test • Board holds right to hire/fire • Arm's-length employment contract • Full specialty occupation focus Up to 3-Year Initial Term PATH B: JAN 2025 RULE Beneficiary-Owner Petitioner • Majority/100% equity allowed • Majority time (>50%) on specialty • Incidental entrepreneur tasks permitted 18-Month Initial Validity
FIG. 2: Comparing the Independent Board Path vs. the January 2025 Beneficiary-Owner Framework.

The gap, named · our reading of the rule

Entrepreneurs historically believed that owning majority stock in a startup automatically blocked H-1B sponsorship. The traditional rule required manufacturing an independent Board of Directors to establish a common-law "right to control." Effective January 17, 2025, DHS codified a new beneficiary-owner petitioner framework (89 FR 103054), unlocking direct self-sponsorship without artificial board structures, provided specific time-allocation and validity terms are met.

The Regulatory Framework: Both Pathways Unlocked

H-1B entrepreneurs now have two distinct regulatory routes to establish a valid H-1B petition:

Regulatory Feature Path A: Traditional Independent Board Path B: Jan 2025 Modernization Rule
Legal Anchor Common-law agency control test (8 CFR § 214.2(h)(4)(ii)) Beneficiary-Owned Petitioner Rule (89 FR 103054 / 8 CFR § 214.2(h))
Equity Threshold Requires independent board mechanisms if holding >50% equity Permits majority or 100% equity ownership directly
Duty Mix Standard Work must strictly match specialty occupation duties Majority of time (>50%) must be specialty occupation; entrepreneur tasks allowed
Initial Validity Up to 3 years upon initial approval Limited to 18 months initially (18-month first extension)
Salary Mandate Must pay DOL prevailing wage Must pay DOL prevailing wage (no zero/deferred salary)

How entrepreneurs prepare for this conversation

Executing Path A (Traditional Independent Board):

  • Step A1: Form Independent Board: Create a Board of Directors with independent members who hold explicit voting authority to hire, evaluate, supervise, pay, and fire you on paper.
  • Step A2: Execute Binding Employment Contract: Sign an arm's-length employment agreement granting the Board sole supervisory control over your role.

Executing Path B (Jan 2025 Modernization Rule):

  • Step B1: Structure Time-Allocation Matrix: Itemize your job duties showing that specialty occupation tasks (e.g., software engineering, algorithm design) occupy over 50% of your working hours.
  • Step B2: Document Permissible Entrepreneur Duties: Allocate remaining hours (<50%) to direct business-building tasks (signing leases, negotiating vendor contracts, fundraising).
  • Step B3: Verify Active Commercial Operations: Provide proof of a bona fide job offer from an active U.S. entity with an EIN and legal presence.

Attorney Interrogation Sheet (What to Ask)

  1. Which path (Path A 3-year board setup vs. Path B 18-month beneficiary-owner rule) better fits my startup's capital and investor structure?
  2. Does my itemized task allocation satisfy the requirement that specialty duties comprise the majority (>50%) of my time under 89 FR 103054?
  3. How does the 18-month validity limit under Path B impact my long-term extension and green card timing?

What this is not This piece quotes the published rule and says plainly where we are reading it rather than quoting it. It is not legal, tax or immigration advice, it creates no attorney–client relationship, and neither you nor we can apply it to your facts. Rules also move — check the date above, then take the questions in this piece to your own licensed attorney and CPA, who are the only people who can advise you.

Sources · primary law first, our own notes labelled as such

89 FR 103054, effective 17 January 2025 — DHS final rule on beneficiary-owned petitioners

8 CFR 214.2(h)(4)(ii) — definition of "United States employer"

USCIS Policy Manual, Volume 7 — beneficiary-owned petitioners

Ownership and work authorisation are treated differently in the rules, and that difference is what this library is about. Everything here is written for people keeping the job that holds their status.

Put a number on it. The Fork

Then choose your route. The Immigrant Entrepreneur Cohort is four weeks, while employed, and it starts with exactly this question. See the next run →