American H1-B Visa Price Hike Offers Opportunity to European Startups

Written by Raphael McMahon, Espacio Media Incubator

In September, U.S. President Donald Trump signed an executive order that added a $100,000 USD fee for applicants to the American H1-B visa programme. The American H1-B visas allow American companies to hire foreign skilled workers in so-called specialty occupations – occupations which require a bachelor’s degree or equivalent in a specific field – on a temporary basis. 

The fee for new H1-B visa petitions had previously cost $1,500. The over 6,500% price increase is likely to have major repercussions for companies based in the U.S. who hire large numbers of highly-qualified workers from overseas. 

The tech sector in particular is likely to be hardest hit by the policy. According to the Pew Research Center, approximately 60% of H1-B workers have held a computer-related job. As a result, staffing costs in American Big Tech are likely to soar.  

Although the increase in H1-B fees is designed to improve job opportunities for the American workforce, the opposite could be true, with U.S. tech companies expected to look overseas to places like Europe and India for English-speaking talent. 

Semyon Dukach, founding partner of One Way Ventures, a U.S.-based venture capital fund that backs immigrant founders, tells Entrepreneur Europe that he doesn’t believe the increase in H1-B prices will severely impact startup founders as much as people fear.

He said the price hike “will probably mean that some amazingly talented individuals will lose an opportunity to come to the United States,” but that other immigration avenues still exist for entrepreneurs.

“The startup founders we work with who have visas are typically here on an O-1 or EB-1. And they often hire people on similar visas, or who work remotely from abroad​,” he says.

Dukach, who is hosting a summit of immigrant entrepreneurs in San Francisco in December, also highlighted the reputational cost of the policy. “It [the price hike] also risks doing long-term damage to the U.S.’s global reputation as the land of opportunity, which can only harm us [the United States] economically,” he adds.  

Despite this, he’s optimistic that the attention could also positively impact society’s views toward foreign-born founders. “I also hope that with time this will dampen some of the rhetoric around immigrants taking value from the US, rather than enriching the nation,” he says. “That may become more visible to the wider US as those obstacles grow.”

However, changes to the H1-B fees have also come at an opportune time for the European Union (EU). In the wake of increased American isolationism, the EU is attempting to style itself as a viable alternative to the U.S. for skilled workers from third countries. 

According to McKinsey & Company, the EU is currently ill-equipped to deal with the growing demand for tech talent, which will be needed to drive its inevitable digital commercial transformation. McKinsey estimates that the tech talent gap in the EU could be as large as 3.9 million by 2027. 

Previously, the EU struggled to compete with the U.S. for tech talent because of salary disparity; tech workers in the U.S. are paid, on average, significantly more than their European counterparts. However, the higher hiring fees mean that European employers in tech are now better positioned than ever to attract top talent to the other side of the Atlantic. 

On 21 August the European Commission (EC) announced that it was seeking external input by 18 September to inform a new visa strategy that would attract skilled students, workers, researchers, innovators and entrepreneurs to the bloc. The strategy, according to the EC, would need to “secure borders, manage migration and promote better cooperation with non-EU countries”.   

A number of EU-based startup accelerators also aim to attract international entrepreneurs and tech talent to the bloc. Paris’ Station F; Madrid’s ISDI Accelerator; Oxford University Innovation’s Incubator programme in the UK; Start2 in Munich; and SAP.io, the accelerator from German tech giant SAP, are some examples. 

Despite these efforts, changes in visa appropriations may still be needed to make the EU more competitive. 

In Europe, the equivalent of the U.S. H1-B visa is called the Blue Card — a work and residence permit for skilled professionals from outside the EU. 

However, the Blue Card has been criticized as inefficacious in attracting talent compared to its equivalents elsewhere. It can take up to 90 days to process a Blue Card application. In comparison, processing for the UK global talent visa takes up to three weeks for those outside the UK. 

The call for an updated visa strategy is already out there. Various organisations, such as the League of European Research Universities (LERU), are encouraging the EU to facilitate mobility into the EU by accelerating the processing and increasing the capacity of EU visas. 

The European Commission is set to adopt the new visa strategy at some point in the fourth quarter of 2025.

It remains to be seen whether the EU will effectively take advantage of the potential impending brain drain of tech workers away from American shores and effectively attract them to EU startups.