A new executive order has established a $100,000 application fee for H-1B visas, a program widely used by U.S. technology companies to hire foreign workers. The policy change is causing significant concern for American startups while creating a major recruiting advantage for technology firms in Europe.
The sudden announcement prompted immediate reactions from major U.S. tech companies, with some reportedly asking employees traveling internationally to return to the country. While large corporations may absorb the cost, smaller, cash-strapped startups now face a substantial barrier to hiring global talent, potentially shifting the competitive landscape in the global race for AI expertise.
Key Takeaways
- The U.S. government has introduced a $100,000 fee for each H-1B visa application via an executive order.
- The policy disproportionately affects U.S. startups, which often lack the cash reserves to cover such a high cost per employee.
- European technology companies view the new fee as a significant opportunity to attract and retain skilled workers who might otherwise have moved to the U.S.
- The move is part of a broader trend of stricter U.S. immigration policies that are making the country less attractive for foreign talent.
A New Hurdle for American Tech Companies
The H-1B visa program has long been a critical pipeline for American companies to source highly skilled professionals, particularly in the science and technology sectors. Established in 1990, the program makes 85,000 visas available annually—65,000 for individuals with bachelor's degrees and an additional 20,000 for those with advanced degrees from U.S. institutions.
Demand for these visas has surged. According to data from the HR company Remote, requests for H-1B visas increased by 150% between January and September 2025. However, the program has faced criticism. Prior to the announcement, Commerce Secretary Howard Lutnik described it as the “most abused visa.”
The new $100,000 fee represents a formidable financial obstacle. For industry giants like Alphabet and Meta, this cost is manageable. For early-stage startups that rely more on equity than large cash reserves for compensation, the fee could be prohibitive.
Garry Tan, CEO of the influential startup accelerator Y Combinator, stated in a LinkedIn post that the fee “kneecaps startups.” He argued that “Early teams can’t swallow that tax…This current policy outcome [is a] massive gift to every overseas tech hub.”
A Significant Cost for Startups
The $100,000 fee could represent a substantial portion of a startup's early-stage funding. For a company that has raised a $1 million seed round, hiring just three engineers on H-1B visas would consume 30% of their total capital on application fees alone.
European Tech Hubs Welcome the Shift
Across the Atlantic, technology leaders see the U.S. policy change as an unexpected advantage. European tech hubs in cities like London, Paris, and Prague have historically competed with the high salaries and prestige of Silicon Valley for top talent. This new policy may help level the playing field.
Victor Riparbelli, CEO of the London-based AI video generation company Synthesia, described the situation as a “blessing in disguise” for European firms. “I think it’ll end up becoming a net negative for the U.S.,” he said, noting that Europe can always use more skilled labor, especially in senior leadership roles.
This sentiment was echoed by others who believe the policy will help them retain local talent. Vassili le Moigne, CEO of Prague-based InTouch, which develops AI for communicating with the elderly, was blunt in his assessment.
“We almost say thank you to Trump, in a way,” said le Moigne, who came to the U.S. on an H-1B visa in 1991. “He’s really helping us keep our talent.”
Le Moigne added that the perception of the United States as the ultimate destination for tech careers, or “El Dorado,” has been diminishing due to the administration's hardline immigration stance, which he described as making the U.S. seem “unwelcoming.”
The Global AI Talent War
The new visa fee arrives amidst an intense global competition for artificial intelligence experts. Companies are offering massive salaries and benefits to attract top researchers and engineers. Meta, for example, has invested billions to build a new AI team. The U.S. policy could inadvertently redirect some of that talent flow away from its own shores.
Navigating an Uncertain Immigration Landscape
The $100,000 fee is the latest in a series of challenges for foreign workers seeking to build a career in the United States. The immigration process is already complex, with long wait times and unpredictable outcomes. According to immigration attorney Emma Zhang, visa denial rates and “requests for evidence” (RFEs) are on the rise.
“Traditionally we would get straight approval with the evidence that we submitted,” Zhang told Forbes. “But now we're getting what we call a blanket RFE, which is the government’s way of delaying the process and adding procedural obstacles.”
In addition to the new fee, the administration has also proposed replacing the H-1B lottery system with a “weighted selection process.” This change would prioritize foreign workers with higher skills and higher salaries, further altering the dynamics of the program.
Xiao Wang, CEO of Boundless Immigration, compared the new fee to a “human tariff,” drawing a parallel to the administration's trade policies. “This is the first real time that this country has gone in that direction,” he noted.
Long-Term Consequences for the Global Tech Ecosystem
The effects of this policy could extend beyond immediate hiring decisions. It may influence international students' choices about where to pursue higher education, as the path to employment in the U.S. post-graduation becomes more difficult and expensive. In response, countries like Canada and China are actively reforming their own immigration systems to attract skilled workers.
“Other countries are going to step into this void,” Wang predicted.
The policy could also impact salary structures. Currently, U.S. tech salaries are significantly higher than those in Europe. Research from Boundless shows a mid-level engineer in the U.S. earns between $110,100 and $133,700, compared to a range of $57,000 to $75,200 in Europe.
However, as the talent pool in Europe deepens, competition for skilled workers could drive up local salaries. Charlotte Bax, CEO of London-based Captur AI, explained, “It’s just simple supply and demand.” In anticipation, her company is already increasing its recruitment efforts at U.K. universities. “We’re doubling down,” she said.