What the H-1B Squeeze Means for Where You Build Your Team

On 18 September 2026, the White House did two things to the H-1B programme. It extended the $100,000 fee on new petitions for another year, to 21 September 2027. And it ordered agencies to look at whether an employer has laid off, or plans to lay off, US workers in similar roles before approving its H-1B cases.

The fee is currently blocked. A Massachusetts court struck down the policy in June, and an appeals court refused to put that ruling on hold. But the extension makes the government's intent plain, and the layoff order is a new hurdle that sits on top of everything else.

If you run a tech company that hires specialised engineers, the takeaway is uncomfortable. Bringing talent to your office is getting harder, slower and less predictable. So more companies are asking a different question: what if the team didn't have to move at all?

What the squeeze looks like on an actual hiring plan

Say a 40-person startup in Austin wants a senior data engineer. The best candidate lives in Bengaluru. Under the H-1B route, the company registers in March, hopes the lottery picks the candidate, files a petition and, if all goes well, sees a start date of 1 October at the earliest. If the $100,000 fee is reinstated by then, that bill arrives on top of salary and legal costs.

And if that startup cut ten customer support jobs last spring? Under the new order, that history can now be weighed against its petition, even though the roles were nothing alike on paper. Guidance on what counts as "similarly situated" hasn't been published yet.

That's a lot of uncertainty for one hire. Multiply it by a team of eight.

How the biggest companies are responding

They're building in India instead of fighting the visa queue. Target employs about 5,700 people in Bengaluru and says roughly 40% of its global tech workforce sits there. DoorDash, which already runs a software and data office in Pune, opened a Hyderabad hub on 30 September with 500 people and plans for more than 3,000 within two years. OpenAI, which opened in New Delhi, has announced offices in Bengaluru and Mumbai.

The wider numbers point the same way. India added 183 global capability centers in the first half of 2026, per UnearthInsight, and US companies made up 57% of them. Most were existing centers getting bigger, which tells you the early experiments paid off.

Why most companies can't copy Target

There's a catch. Those companies built their own Indian subsidiaries, and that's expensive. Registering and running an entity in India typically costs $20,000 to $300,000 to set up and takes three to six months before anyone is hired. Once it's running, payroll, tax, statutory benefits and local HR add around 35% on top of total salary cost.

Then there's the time nobody budgets for. A founder or CTO ends up sitting with Indian accountants, reading up on labour codes and approving office leases from 12 hours away. Big companies have a team for that. A Series A startup has the same three people who are also shipping the product.

So the H-1B squeeze doesn't just push companies toward India. It splits them into two groups: those who can afford their own setup, and those who need another way in.

The other way in: your team, without the entity

An employer of record (EOR) is the most common answer for smaller teams. The EOR legally employs your engineers in India and handles payroll, benefits, tax and compliance. You pick the people, set the pay, run their day-to-day work and decide who gets promoted. They're your team in every way that counts. You just don't have to own a company in India to have them.

Kaamwork runs this model for tech teams specifically. Companies keep 100% control over hiring and the work itself, without registering an entity or dealing with Indian tax and compliance. The fee is $599 a month per engineer, added to salary, and hiring can start within days. If you want a feel for the numbers first, the global employee cost calculator compares the full cost of a role in India and the US.

So where should you build your team?

It depends on the role, and it's rarely all-or-nothing.

• Keep sponsoring visas for the handful of roles that truly need someone in the room. A founding engineer working next to the CEO, say, or a role tied to US-only customer data.
• Use an EOR for everything that can be done well from India. That's most backend, data, ML, QA and DevOps work, especially once you set up a few hours of daily overlap.
• Think about your own entity only when headcount is large and stable. Many companies cross that line somewhere past 50 to 100 engineers, and an EOR team can usually be moved across when that day comes.

The point isn't to give up on hiring in the US. It's to stop letting one visa programme decide how fast you can grow. For a closer look at how that works in practice, see Kaamwork's H-1B alternative approach.

This article is for general information and is not legal or immigration advice. Speak to an immigration attorney about your situation.

By Kaamwork, which helps US, UK and ANZ companies build engineering teams in India.