Entrepreneurial Activities

Even though Babson specializes in teaching entrepreneurship, international students face limitations on actually operating a business in the U.S. While in the U.S., employment (including self-employment) without appropriate authorization is a serious violation of lawful status.

The following overview is in response to common questions from international students in F-1/J-1 status who wish to engage in entrepreneurial endeavors in the U.S. Because there is much speculation around what activities are considered employment in the U.S. (and therefore require authorization), students are strongly encouraged to get professional independent legal advice (from an exclusive practitioner of immigration law) to avoid accidentally engaging in unlawful activities. ISSS holds events with Immigration Attorneys each semester - Beyond Babson: U.S. Work Visas - to help educate international students about options to start a business in the U.S. Additionally, students can email International Student and Scholar Services to request a list of immigration attorneys.

Some activities may be authorized if F-1 practical training or J-1 academic training (described below) is granted. Consult the Glavin Office to determine eligibility.

F-1 Optional Practical Training (OPT): Immigration regulations permit self-employment.
F-1 STEM OPT Extension: Self-employment not permitted. A "bona fide" employee-employer relationship must exist
F-1 Curricular Practical Training (CPT): Self-employment is not permitted; a clear employer-employee relationship must exist.
J-1 Academic Training: Self-employment is not permitted; a clear employer-employee relationship must exist.

An Employer-Employee relationship may come up in several discussions around U.S. work authorization, including employment options under student status or work visas like the H-1B. F-1 OPT and CPT, and J-1 Academic training allow a student to engage in activities (that may or may not involve payment) that are educational in nature and involve a trainer/supervisor in the role of employer*. An employer is someone with the authority to: hire/fire the student trainee; to set an appropriate wage (if applicable); and to assign, monitor, and evaluate the activities being performed by the student trainee.

View the 2010 USCIS memo on the employer/employee relationship.

*Regulations specifically allow a student to employ themselves during OPT.

Employment can be seen as providing goods or services in exchange for some kind of compensation (monetary or otherwise).

Some planning activities that are generally not considered to be employment (and therefore may be permissible without specific authorization) are: conducting market research; scoping out and even purchasing physical space for your business; registering a business under your name; securing any necessary business licensing; preliminary meetings with potential clients/customers and/or employees/contractors.

While inside the U.S. in F or J status, you are neither permitted to develop products and services, nor permitted to work for a business that is registered online or outside the U.S. (including a family business) unless you qualify for, and have been granted specific authorization (practical or academic training, as described above).

Whether within Babson or elsewhere, you should speak with an international student advisor and plan ahead if you wish to apply for a program that could enable you to start actively working on a business/startup in the U.S.

Babson's Summer Venture Program & Butler Launch Pad (Blank Center)

While much of what occurs during participation in the Butler Launch Pad (BLP), including the Fast Track Cohort, or Summer Venture Program (SVP) is not considered employment (research, feasibility studies, business planning, etc.), any activity that directly results in income generation is considered employment and requires specific authorization.

International students must consider the limitations of their immigration status when setting goals and determining whether the BLP or SVP is right for them. Most students need to have approved Optional Practical Training (OPT), used either pre-completion (before graduation) or post-completion (after graduation) at some point if they are further along in the planning process and will be ready to start their business. Careful planning is needed as OPT is limited to 12 months.

International students must not actively be involved in making money in any way while in the U.S. in student status without authorization (CPT, OPT, Academic Training).

Passive income (rental property, dividends, interest received, capital gains, etc.) may be permissible. Consult an immigration attorney or speak with an international student advisor for additional guidance.

Starting in 2024, there will be a U.S. federal reporting requirement for any business entity organized or registered to conduct business in the U.S., per the Financial Crimes Enforcement Network (FinCEN). Very briefly, such business entities are required to disclose to FinCEN identifying and beneficial ownership information. The regulation is intended to expand and modernize the U.S. government’s ability to collect beneficial ownership information to deter money laundering, corruption, tax evasion, fraud and other financial crimes. Following a period of implementation, reports must be submitted generally within 30 days of the formation of the entity and, thereafter, promptly updated as information changes over time. To better understand the potential impact of these reporting requirements, students who have, or may in the future have, interest in a business organized or registered in the U.S. are strongly encouraged to review the details and speak with a competent attorney, advisor, or other appropriate professional. More information about the FinCEN Beneficial Ownership Information Reporting Rule can be found on the Financial Crimes Enforcement Network webpage.