Who can really afford a $100,000 visa fee, and who just got shut out?
On September 19, 2025, President Trump signed a Presidential Proclamation imposing a $100,000 fee on all new H-1B petitions.
For decades, the H-1B has been the main pipeline for global talent into U.S. tech. Overnight, the economics of that pipeline were turned upside down.
At first, confusion reigned. Was it annual? Would it apply to renewals?
By the morning of September 21, officials clarified that it’s a one-time charge, applicable only to new petitions. But by then, the reaction was already in full swing.
In venture-backed boardrooms, the fee has become shorthand for a deeper problem. Investors already scrutinize burn rates with surgical precision. Now, founders are being asked to justify throwing H-1B fee of six figures at immigration red tape, before the engineer even joins the sprint board.
As one founder on Reddit put it: “No VC wants to see $100k vanish into paperwork before a single line of code is written.”
So the dilemma looks like this:
- Pay the fee. Retain access to U.S.-based H-1B talent, but torch runway in the process.
- Rethink the map. Accept that global hiring is shifting, and start looking where value and scale still exist.
That’s why threads are now asking questions no one thought they’d ask so soon:
- Is outsourcing back as “Plan A”?
- Will startups now be permanently locked out of the global talent pool?
- Does this accelerate the decline of India’s dominance, or does Africa finally get its seat at the table?
Outsourcing After the $100K H-1B Fee: The Policy Paradox
Here’s the paradox: some argue this policy was designed to push companies to “hire American.” But the economics tell a different story.
For the cost of a single H-1B hire under the new rules, a startup could fund an entire offshore team for a year.
Which looks smarter on a board deck: explaining you burned $100K on paperwork, or showing you stretched that money into a working product with a distributed team?
In practice, this fee doesn’t bring jobs back onshore. It accelerates offshoring. The talent and the work will still flow, just not through Silicon Valley the way it once did.
For early-career professionals, the fallout may be even harsher.
Thousands of international graduates in the U.S. rely on OPT (Optional Practical Training) as a bridge to H-1B sponsorship.
So, what happens to OPT students under the new H-1B fee?
They become far less attractive to U.S. employers. A graduate who once looked like a low-risk hire now carries a $100K price tag if the employer sponsors them.
One of the loudest questions on a lot of people’s minds right now is: “Won’t they just outsource all the work now then?”
It’s the obvious assumption; if visas are too expensive, why not just move the work offshore?
That’s exactly what happened in the early 2000s, when H-1B caps collided with a tech boom. India’s IT giants built empires off U.S. demand. The Philippines became synonymous with customer support. Eastern Europe rode the wave into engineering.
But 2025 isn’t 2005. Those old hubs aren’t the guaranteed bargains they once were.
- India’s wage curve is climbing steeply, with attrition eroding long-term savings.
- Eastern Europe now carries geopolitical risk; Ukraine’s war is no longer an abstraction but an operational hazard.
- Latin America’s senior dev rates are brushing against U.S. mid-market salaries, making the cost math less compelling.
So yes, outsourcing will surge as companies scramble for alternatives. But the fallback isn’t as simple as dusting off the old India-first playbook. The real question founders are asking:
If we’re forced to offshore, which markets actually deliver sustainable value in 2025?
Africa vs India Outsourcing: Why Startups Are Switching in 2025
For two decades, India has been the default.
When U.S. companies needed scale, Infosys, TCS, or Wipro had armies of engineers ready. The model was industrial: massive delivery centers, pyramid staffing, high churn, and constant pressure on margins.
It worked because wages stayed low, U.S. demand stayed high, and the pipeline never ran dry.
But here’s the problem: India’s model is maturing, not evolving.
Wages have risen steadily. Attrition remains a chronic headache. And much of the work is still filtered through giant consultancies whose incentives don’t always match those of scrappy startups.
Africa represents something different. It isn’t just “cheaper India.”
The outsourcing story here is still being written, and it looks more like ecosystems than empires. Instead of huge IT service firms dominating the narrative, Africa’s tech talent is being exported through:
- Startup-built teams in Lagos, Nairobi, and Cape Town, where engineers work directly with foreign founders.
- Accelerator pipelines producing developers, designers, and analysts trained to plug into global projects from day one.
- Hybrid models (like Betternship and others) that blend outsourcing with embedded remote hires, removing layers of middlemen.
The value here isn’t just cost (though developers averaging $10–$40/hour are hard to ignore). It’s alignment.
Africa’s rising outsourcing hubs operate in real time with London, Berlin, and even parts of New York. English is standard, communication is direct, and teams are younger, hungrier, and less tied to old corporate structures.
So when founders ask, “If we can’t afford H-1Bs, do we just go back to India?” the real answer is: maybe not.
India will remain a giant, but its cost advantage has eroded, and its model feels less suited to leaner, distributed-first startups.
Africa, by contrast, offers a frontier advantage: one that combines affordability with direct integration into modern workflows.
The bigger shift is this: India shows what outsourcing looked like at scale. Africa is showing what outsourcing could look like in a distributed, startup-driven era.
What This Means for Startups Right Now
If you’re running a startup in 2025, you’re staring at three uncomfortable options:
- Pay the $100K fee.
This is the least realistic choice for most. Unless you’re a unicorn with deep pockets, burning that much on paperwork before a single line of code is written makes no financial sense. Investors won’t stomach it, and founders know it.
- Stick with the legacy hubs (India, LATAM, Eastern Europe).
This feels safe because everyone’s done it before. But “safe” doesn’t mean “cheap” anymore. A senior developer in Bangalore or São Paulo can now cost as much as a mid-level hire in Austin. Add churn, time zone headaches, and middlemen layers, and what used to be a bargain starts to look bloated.
- Look to emerging ecosystems: Africa first among them.
Here’s where the buzz is growing. Startups that outsource to Africa gain three things right now:
- Cost efficiency without the bloat. $10–$40/hour engineering talent saves 30–50% over India or LATAM, without layers of outsourcing bureaucracy.
- A long runway of supply. Africa’s workforce is the fastest-growing in the world. Nigeria and Kenya are already producing talent pipelines that outpace demand.
- Better integration. Overlapping time zones with Europe and partial U.S. coverage make collaboration natural. Add strong English proficiency, and the communication gap shrinks.
For startups, the calculation is no longer just cost; it’s adaptability. The $100K visa fee forced a reckoning: you can’t build your future on unpredictable immigration policy. You need a workforce that’s global, affordable, and resilient. And that’s exactly what African tech talent offers.
This is where Africa changes from “the next big thing” to “the logical next step.”
FAQs: Outsourcing Tech Talent After the H-1B Fee
- How much does it cost to outsource software development to Africa in 2025?
Developers typically cost $10–$40/hour depending on skill and seniority. That’s 30–50% cheaper than India or LATAM rates, making it far more cost-effective for startups that choose to outsource to Africa.
- Why are startups choosing Africa over India for outsourcing?
India’s rising wages and attrition make it less cost-effective. Africa offers competitive pricing, strong English communication, overlapping time zones with Europe, and fresh pipelines of African tech talent ready to integrate into global teams.
- Can outsourcing replace H-1B hiring for U.S. startups?
In many cases, yes. Outsourcing offers the same technical expertise without visa uncertainty or six-figure immigration fees. Increasingly, founders are choosing to outsource to Africa, where teams deliver at global standards without the cost burden of immigration policy.