How do the H-1B Visa changes affect SMBs and Start-ups?
October 20, 2025
H-1B Visa – what’s changed?
As of September 21, 2015, all new H-1B visa applications are subject to an increased $100,000 fee. This change represents a dramatic increase in the fee structure. Historically, the fee was a few thousand dollars.
The challenge for small businesses and start-ups
Major tech companies, such as Google, Amazon, Meta, and Microsoft, are among the top H-1B sponsors. In 2024, Amazon hired more than 13,000 staff through the H-1B scheme.
Many of the larger users of the H-1B scheme have lobbied the government for changes, which have not been forthcoming. However, these large enterprises may simply absorb this cost. However, this massive fee increase poses a significant challenge for small businesses and start-ups. For many, it is a barrier to recruiting the necessary skills needed to survive.
The stated aim of the increase is to encourage companies to recruit these skills within the US and save or create new jobs for US workers, which is laudable. Unfortunately, in many cases, those skills are not available in the US or are in short supply. Generating the required skills takes time. Time is something that small businesses, especially start-ups, typically do not have.
In 2024, around 400,000 H-1B visa applications were approved. Of these, roughly 260,000 were renewals, and the remaining 140,000 were new applications. 60 to 70% of visas were for jobs related to the computer industry.
How the SMBs may be affected
SMBs account for nearly one-half of the private sector employment in the US. The nearly twentyfold fee increase is having a profound impact for several reasons.
A mid-sized tech firm in Texas might have planned to sponsor three specialized software developers. They now face an additional $300,000 cost. This unexpected cost will inevitably result in either decreased funding in other areas, such as R&D, the hiring of local resources, or other critical areas of growth.
Many SMBs rely on H-1B talent to fill roles in areas such as AI, cybersecurity, and specialized software development. These are areas where the domestic labor pool is limited and unlikely to change quickly.
Larger tech companies and Fortune 500 firms will have access to the skills through their larger networks and, in many cases, overseas centers. SMBs do not have this luxury.
The H-1B process was often lengthy and uncertain. Although the denial rate was only 2.15%, it is a risk that many smaller companies cannot take. Avoiding this risk could mean slower projects, missed deadlines, and lost contracts.
How Start-ups may be affected
For start-ups operating on venture capital or seed funding, cash flow is oxygen. For many, the $100,000 visa fee represents a serious problem. Most early-stage companies cannot justify the cost of sponsoring one team member, regardless of how critical they are. In many situations, the presence of that one skill set could determine the success or failure of the start-up.
Start-ups, especially tech-based ones, typically rely on small, highly skilled teams. Without the ability to fund an H-1B application, they must compete in an already limited domestic talent pool — driving up wages and likely experiencing delays.
Given the importance of being first to market, start-ups may be forced to reduce the scope of their project due to a lack of appropriate staff, which can affect venture capital confidence.
As of 2025, the United States accounts for 46.6% of all start-up activity worldwide. Its closest rival is China at 9.2%. There is no fear that the US will lose its #1 position, but the inability for start-ups to hire the right talent at the right time, due to the increased visa costs, may impact that number.
Nearshore Staff Augmentation: A Strategic Alternative
As the cost of H-1B visa sponsorship increases, nearshore staff augmentation offers a practical, flexible alternative. This model allows US companies to partner with teams or individual professionals in neighboring countries such as Mexico, which boasts a strong technical talent pool and operates within compatible time zones.
Here are five quick reasons why this is a strategic solution:
1. Major cost savings without quality loss
Instead of spending $100,000 on a single visa application, businesses can deploy that same amount to build a team of nearshore engineers for an entire year. The hourly rate charges from a company like Global Triangles are significantly lower than comparative US rates. Yet the quality of work remains high due to improved technical education and international experience in Mexico.
For start-ups that cannot afford the new visa cost, this is a pragmatic alternative.
2. Access to Specialized Talent and Flexibility
Nearshore augmentation enables firms to scale up or down quickly - bringing in experts for a project, when they’re needed, and replacing them with other skills as necessary – or even reducing headcount - complete flexibility.
The model works well for specialized skills (AI, DevOps, etc.) that may be difficult to hire locally. This agility is appealing to start-ups and small firms needing bursts of expertise rather than permanent hires.
3. Time zone and cultural alignment
Because nearshore teams are located relatively close by in Mexico, overlapping working hours and fewer cultural or language gaps lead to better collaboration, faster iteration, and fewer hand-offs.
Mexican professionals have strong English proficiency, share similar work cultures, and familiarity with US business practices — reducing onboarding friction and improving collaboration across teams.
This time and cultural alignment can be critical for start-ups and SMBs operating under tight deadlines.
4. Reduced legal and administrative complexity
Nearshore staff augmentation eliminates visa dependencies, legal filings, and the uncertainty of immigration policy shifts.
Global Triangles contracts are flexible and straightforward. This ease of engagement enables the timing and skill set of hired staff to match precisely the requirements of a project, removing any wasted costs.
As a US-registered company, billing is in US$ from the States, and contracts are under US law.
5. A bridge for future growth
The ultimate goal of most smaller businesses and start-ups is to establish their own team. For start-ups, this can be especially challenging as it may require hiring staff with skillsets that will only be needed later or for a limited period of time. When cash flow is critical, this can be a heavy burden.
The flexibility of staff augmentation allows for the skillset to change within the same contract as the project progresses. This flexibility enables the start-up to recruit local staff without pressure and at their own pace.
Ultimately, nearshore staff augmentation provides a strategic bridge, allowing companies to continue development and mature financially while they wait for the right time to recruit locally.
Global Triangles – Your Strategic Partner
Global Triangles is a US-based IT staff augmentation and nearshore services provider with a single mission: to offer solutions that help you and your company achieve your goals at affordable prices.
Over the past ten years, our IT staff augmentation and nearshore teams have built an impressive depth of experience through working with different clients across various industries. Depending on your requirements, they can provide custom software development, Adobe-accredited Magento skills, other e-commerce platforms, app development, AI skills, and much more.
Global Triangles has built a credible list of success stories in the US. Global Triangles has built a credible list of success stories in the US. You can find details by clicking here:
Our personalized services and reliable team allow them to be productive and reactive to new challenges that arise in each project. The company prides itself on generating agreements that work for your company and team.
If you urgently need high-quality IT resources, consider IT staff augmentation and nearshore services through Global Triangles. You can enjoy the advantages of lower costs, quality, speed, flexibility, and collaboration while assured that you are working with a trusted and reputable company.
