The H-1B program has always stood out as one of those policies that impacts the tech and SaaS space more than most people appreciate. For over five decades, it has allowed American businesses to compete for the world's top talent to work with them in person, from engineers and data scientists to developers who create entire industries.
As you probably know, about 85,000 new visas are allocated each year, 65,000 to regular applicants and 20,000 to those with master's degrees and higher. It might sound like plenty, but it’s a small quantity compared to the enormous demand for advanced skills within the IT sector.
But the real story of H-1B is not one of rules or hard numbers. It's focused on how businesses grow when they can access the correct talent, and how things get created when borders don't inhibit collaboration. That's why recent changes, such as higher fees, stricter requirements, and longer processing times, have caused elevated concern. They raise a question that cannot be brushed aside: Are we holding back innovation?
Why large firms use the H-1B program more than smaller or mid-sized companies
When you take a closer look at how the H-1B program actually works, there's a clear pattern: the big guys get their way. And it's not that smaller or medium-sized companies don't want to have international talent; it's that the process has an infrastructure element to it that usually large companies can comply with without jumping through infinite hoops.
This is triggered by a variety of reasons:
Compliance and legal cost
Hiring an H-1B worker means having to work through complex paperwork, attorney fees, government filings, and constant reminders about forms. It's not a one-time deal; it requires ongoing attention.
Expert internal personnel
They already have HR and legal departments up and running in companies such as Amazon, Microsoft, Google, Meta, Infosys, TCS, and Cognizant. They can handle the filings, audits, and renewals without losing a beat.
Limited capacity for smaller teams
A growing SaaS business or company might lack the resources to overcome these challenges. For them, the time and money cost might outweigh the benefit.
Migration towards flexibility
That is why the majority of smaller companies now look towards local or nearshore remote professionals. It gives them access to professionals without the cumbersome sponsorship administrative overhead.
That’s why, although the H-1B program was established to solve labor gaps across all industries, it has, in reality, become an application driven by large technology and consulting firms - not out of preference but because they are best positioned to serve it.
Where do H-1B workers come from?
If you examine more closely the country of origin of most H-1B professionals, the data present a very steady picture: About 73% of all H-1B approvals go to natives of India, with another 12% from China.
This should come as no surprise when you consider how central India has become to the global technology ecosystem. The country produces millions of IT and engineering graduates every year, some of whom are trained in exactly those skills that American companies need, such as software development, data analytics, and emerging technologies.
It also deals with how interconnected the world tech economy has become. American innovation has depended quietly on foreign talent, especially India's ample talent pool, for decades now.
Some of the best SaaS products, platforms, and research work today have been shaped by this exchange of skill and outlook. So while the H-1B visa is highly controversial from a policy standpoint, on a basic level, it speaks to something greater: the way international cooperation continues to drive technological innovation.
The new H-1B Visa program: $100K fee and other requirements
Taking a look at the numbers, it's clear that the H-1B landscape is changing faster than most predicted. During fiscal 2024, there were around 400,000 combined approvals, new petitions, and renewals. Written out on paper, that seems like stability, but in reality, the earth beneath is shifting.
Moving Forward, new DHS rules and other policy reforms will forcefully reshape the approach that companies take to sponsorship. There’s now a $100,000 fee on new petitions, a figure that will fundamentally change the cost model for many employers. There is also a new requirement for on-site interviews during renewals, adding another area of tension. For workers, it means even more uncertainty. For employers, it will cost them extra time, money, and administrative hassle.
All of these trends are heading in the same direction: the process is becoming increasingly hard to navigate, even for companies that have relied on H-1B workers for decades. It's a reminder that the scale between opportunity and regulation requires a careful balance and that right now it is tipping towards complexity.
Are these changes definitive?
On September 19, 2025, a presidential proclamation was signed, imposing a $100,000 fee for new H-1B petitions from September 21, 2025, and onwards. It is the biggest fee hike the program has ever experienced and is already altering global hiring strategies by companies.
The fee only takes effect on new foreign petitions and not renewals or already existing visa holders in the U.S. However, for startups and medium-sized SaaS companies that rely on bringing in expert engineers from abroad, this change is a significant barrier.
There is also ongoing legal opposition, including a suit filed by the U.S. Chamber of Commerce, arguing that the policy unfairly burdens businesses and stifles innovation. Depending on the outcome in these suits, the final answer may be quite different.
For now, the decree lasts for 12 months, until September 2026, unless renewed or amended. It’s in this temporary nature that there lies extra uncertainty, calling for a rethinking of recruitment strategies and visa policies in the short run.
The details of implementation, especially in terms of status changes and extensions, are uncertain. Many immigration attorneys are cautioning employers to be wary since further clarification from DHS might change the application of the rule.
Expected Impact: Fewer H-1B hires, shifting strategies
The ripple effects of these changes are already starting to show. For many tech and SaaS companies, the rising costs and added layers of regulation make new H-1B sponsorships a difficult choice. It’s not impossible, but it certainly demands a stronger business case than before.
Here’s what we’re likely to see next:
- Fewer new H-1B hires: The higher $100,000 cost and tighter restrictions will automatically deter many companies, especially small and medium businesses, from stalling or stopping sponsorship altogether. What had been a common means of bringing in overseas talent is now considered an economic and legal gamble.
- A shift towards nearshore, offshore, and remote teams: Businesses are now considering hiring outside traditional borders. Hires from far away throughout Latin America, for example, offer access to the same skill base without the inconvenience of U.S. immigration procedures.
- Increased collaboration with outsourcing providers: Most companies are pursuing long-term partnerships with qualified development partners instead of individual visas for work requiring specialized skills.
- Greater focus on local hiring: With reduced H-1B approvals, there will be greater competition for local skilled labour, especially in the high-growth areas like data science and software engineering.
Eventually, this could revolutionize how tech teams are put together. The future of hiring looks more international, more dynamic, and less involving actual physical relocation. While the H-1B reforms may tamper with old-style immigration-driven growth, they're also driving a larger movement toward distributed, borderless collaboration. It's a direction that the business was already going in since the COVID-19 pandemic.
Winners and Losers
Clear winners
U.S.-Based local talent
For U.S.-based software engineers, data scientists, and IT professionals, the changes could have a silver lining. As companies reduce H-1B sponsorships, local talent will likely see more opportunities. It's not about more positions; it's about more potential to influence projects, grow into leadership roles, and shape the future of technology in America. Many talented workers who were vying with foreign applicants are now in a stronger position to negotiate, lead, and make significant contributions.
Nearshore and outsourcing firms
A second tier likely to leverage this situation the best is nearshore and outsourcing firms, particularly Latin American ones. Time-zone alignment, strong English proficiency, and advanced technical capacity render these groups an attractive alternative for U.S. firms struggling with rising visa costs and bureaucratic hurdles. Companies can continue to draw on great talent without the sponsorship legal hassles, and this flexibility is increasing to become a main competitive advantage for employers and service providers alike.
Emerging nearshore hubs:
Countries such as Mexico, Colombia, and the Dominican Republic have long been quietly emerging as alternative centers of technological expertise. They offer a combination of lower cost, cultural suitability, and superior technical training. U.S. firms attempting to maintain pace and nimbleness in software development are increasingly turning to these countries for engineering staff that can integrate naturally into their methodologies, ensuring projects stay on schedule as set visa channels become ever more complicated.
Likely losers
Big tech companies
Even the largest technology firms are not immune to these shifts. Amazon, Microsoft, Google, and Meta are just a few of the firms that have been relying on H-1B sponsorship to recruit skilled workers in a rush for decades. New fees, more regulations, and new requirements around processes put both dollars at risk and talent shortages. These companies can look forward to recruitment delays, increased labor expense, and a reconsideration of how they recruit and retain high-skilled workers.
Large consulting and IT services providers
IT consulting giants such as Infosys, TCS, Cognizant, and Accenture are mainly dependent on H-1B placements for client projects. Delays in clearance and higher costs could put project timetables into turmoil, reduce margins, and force strategic realignment in people management. These providers may be forced to explore alternative delivery models, invest in in-country talent pipelines, or build stronger nearshore partnerships to maintain service levels.
Foreign IT professionals
To highly skilled professionals with hopes of inserting themselves into the in-person U.S. tech industry, the new rules are pretty restrictive. The cost and uncertainty of the $100,000 fee, combined with stricter requirements, may deter some from seeking opportunities in the country. This shift could reduce the diversity of talent coming into the U.S. technology sector and slow the flow of global innovation.
Broader ramifications for the U.S. tech and SaaS sector
Higher U.S. labor costs
One of the immediate implications of these H-1B changes is the potential rise in local labor costs. Companies that had previously relied on foreign recruits may now be fighting more actively for software engineers, data scientists, and IT professionals within the U.S. for higher salary expectations, especially for highly specialized roles, pinching smaller and mid-sized firms to balance budgets while remaining competitive in the job market.
Growth in outsourcing and nearshoring
We can also expect to see more outsourcing and nearshoring activity, with Latin America strategically positioned as the most attractive region thanks to time-zone compatibility, strong technical skills, and cultural similarity. Distributed teams are now the norm, and companies are creating longer-term partnerships with nearshore suppliers to maintain project continuity and reduce risk. This shift is part of a broader trend toward flexibility and efficiency in global workforce planning.
Innovation slowdown risk
There is a risk of a slowdown in innovation in specializations that rely on highly skilled international talent. Fields like AI, cloud engineering, and innovative research and development are helped by diversity of thought and access to the finest skill sets possible. When companies are prevented from hiring from the talent pool of the world, projects drag on longer, breakthroughs can be postponed, and U.S.-based R&D can lose some competitive edge.
Shift in global hiring models
Finally, the way companies approach global hiring is changing more than we’d expected in the past. More and more companies choose to build where the talent is rather than relocating workers to the U.S. That means an increase in distributed teams, additional remote-first roles, and an emphasis on developing infrastructure that enables cross-border collaboration. For U.S. SaaS and tech companies, shifting toward this model is no longer optional but essential to remain competitive.
Where we might be headed
If you ask me, I think these changes to H-1B policy will continue to accelerate the trend towards nearshoring, especially across Latin America. Those businesses that have had previous experience in the region will reap the most benefit, transforming regulatory disruption into strategic gain. On the other hand, the big tech companies can digest the financial impact of the new rules, but I truly think mid-market SaaS firms will adapt faster. Remote-friendly models and distributed teams give them the flexibility to access top talent without relying on expensive visa processes.
Looking ahead, these shifts might force the U.S. to lessen its reliance on imported talent and more on partnerships with nearshore delivery hubs, changing how software development is carried out across the Americas. In the short term, nevertheless, we can probably expect U.S. labor costs to increase as companies compete for a now smaller group of U.S.-based talent, creating both difficulties and new incentives for creativity in hiring practices. One thing’s for sure: Latin America is ready to step up and become even more visible within the IT industry.
