Can My Startup Still Afford to Hire a Foreign Engineer With the New $100,000 H-1B Fee?

You’ve found the perfect software engineer.

They have the technical skills your startup needs, they’re excited about joining your team, and the interviews went exceptionally well.

Then your immigration lawyer raises an issue you weren’t expecting.

Because the candidate is outside the United States and needs a new H-1B petition, your company may have to pay a $100,000 government fee before the hiring process can move forward.

For an early-stage startup, that kind of expense can completely change a hiring decision.

The good news is that the fee does not apply to every H-1B case. Whether your company actually has to pay depends on the candidate’s current immigration status, where they are located, and the type of petition being filed. Understanding those distinctions before extending an offer can help founders avoid unnecessary costs and evaluate other hiring options more effectively.

What Changed?

A presidential proclamation issued in September 2025 introduced a $100,000 fee for certain H-1B petitions, effective September 21, 2025.

The fee applies only to new H-1B petitions for beneficiaries who are outside the United States.

That limitation is important because many founders initially assume every H-1B application now carries the additional cost.

It does not. Renewals, amendments, and transfers of existing H-1B workers generally fall outside this new requirement.

Candidate Location Makes a Huge Difference

One of the first questions founders should ask is where the candidate is currently located.

If the engineer is outside the United States and requires a new H-1B petition, the additional fee may apply.

However, if the candidate is already in the United States under another qualifying status or already holds an H-1B visa, the situation may be very different.

Checking this detail before making an offer can prevent expensive surprises later in the hiring process.

Hiring an Existing H-1B Worker May Avoid the Fee

For many startups, hiring someone who already holds an H-1B visa can be a more practical option.

When an existing H-1B employee changes employers, the process is generally handled as an H-1B transfer rather than a new petition from outside the country.

Because transfers are treated differently, companies facing tight hiring budgets are increasingly focusing on candidates who already have H-1B status inside the United States.

For an early-stage company, avoiding a six-figure government fee may make the difference between filling an important engineering role and delaying hiring altogether.

Cap-Exempt Opportunities May Be Available

Not every H-1B petition follows the same process.

Universities, nonprofit research organizations, and certain affiliated institutions may qualify as cap-exempt employers.

In some situations, working through a qualifying cap-exempt organization may provide additional flexibility while longer-term immigration planning takes place.

Whether this option is available depends on the specific facts of the employment arrangement, so founders should confirm eligibility before relying on this approach.

An H-1B May Not Be the Only Visa Option

Many founders automatically assume an H-1B petition is the only path for hiring international talent.

That is not always the case.

Depending on the candidate’s qualifications and experience, another immigration category may be more appropriate.

For example, the O-1 visa may be available for individuals who satisfy the applicable eligibility requirements.

The right solution depends on the individual’s background rather than simply the position being offered.

Exploring alternative visa categories before committing to an H-1B filing may significantly reduce both cost and delay.

The Financial Impact Can Be Significant

For early-stage startups, the financial impact can be substantial. A Series A company that previously planned to sponsor three to five new H-1B workers from outside the United States could now face $300,000 to $500,000 in additional government fees. 

That capital many founders would otherwise invest in product development, hiring, or extending their runway. 

Reports also showed H-1B registrations falling by more than 130,000 year over year, even though USCIS still announced a full selection, suggesting the higher fee changed employer participation rather than reducing the number of available visas. 

Confirm the Facts Before Extending an Offer

Immigration strategy should begin before an employment offer is finalized. Founders should understand:

• Whether the candidate is currently inside or outside the United States.
• Whether the individual already holds H-1B status.
• Whether the filing will be treated as a new petition, transfer, or amendment.
• Whether another visa category may better fit the candidate’s background.

Answering these questions early often prevents delays, unexpected expenses, and last-minute changes after the recruiting process is already underway.

Common Founder Mistakes

• Assuming every foreign engineer now requires a $100,000 H-1B fee: The additional fee generally applies only to new H-1B petitions for beneficiaries outside the United States, not every international hire.
• Making an offer before confirming the candidate’s immigration status: Whether the person is already in the United States or already holds an H-1B visa can significantly affect both cost and filing requirements.
• Automatically choosing an H-1B petition without considering other visa categories: Depending on the candidate’s qualifications, another immigration option may provide a more suitable path.
• Overlooking cap-exempt opportunities: Certain employers and affiliated organizations may qualify for different filing rules, making it worthwhile to review every available option before proceeding.

10-Minute H-1B Hiring Self Check

• Is my candidate currently inside or outside the United States?
• Does the candidate already hold H-1B status?
• Will this filing be a new petition, a transfer, or an amendment?
• Have I explored whether a cap-exempt option is available?
• Could another visa category better fit the candidate’s background?
• Have I understood the financial impact before extending an offer?

If you cannot answer yes to the questions that would spare you the fee, you are not ready to make this hire yet.

Bottom Line

The new $100,000 H-1B fee has changed how many startups approach international hiring, but it does not affect every foreign engineer. The candidate’s location, immigration status, and the type of petition being filed all determine whether the fee applies. Understanding these factors before making a hiring decision allows founders to evaluate alternative strategies and make better use of limited startup resources.

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