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Q: H1B opens a business in the USA ( Answered 5 out of 5 stars,   1 Comment )
Subject: H1B opens a business in the USA
Category: Relationships and Society > Law
Asked by: yygian-ga
List Price: $15.00
Posted: 24 May 2006 07:24 PDT
Expires: 23 Jun 2006 07:24 PDT
Question ID: 731971
Can a non-resident alien (with an H1B visa) open a business in the
USA?  My situation is: I am a computer programmer currently holding H1
visa working with ABC Company.  I am in the process of getting a
permanent resident status.  Meanwhile, I plan on open a company (sole
proprietorship, or any legal structure) that sell apparels (with an
H1B visa). I will receive no wages (and not hiring full-time
employee), passively monitor the company, and remain as passive
investor for the new company.  However, I will voluntary run an errand
to the post office, getting some packaging supplies, keeping the book,
and maybe getting the company trademark registered.  I only plan on
become actively involve in the new company when I receive my permanent
resident status.  I also read the following article from G-A:, but the
article doesn?t really apply to me situation.
Subject: Re: H1B opens a business in the USA
Answered By: hummer-ga on 24 May 2006 10:41 PDT
Rated:5 out of 5 stars
Hi yygian,

Can a non-resident alien (with an H1B visa) open a business in the USA?  

Yes, there should be no problem with you owning a business as long as
you take a passive role, receiving only profits from your investment.
As you know, your work in the U.S. is employer-specific (i.e. limited
to employment with the approved employer/petitioner) so working for
your company and receiving any kind of compensation for your work is
strictly not allowed.  Doing a bit of volunteer work, like running
errands, is permissible, but best done after you have hired an
employee to run the day-to-day operation of the business.

"In other words, a person on an H1B or other temporary work visa in
the United States is legally allowed to invest in any venture or
company and could possibly undertake some limited volunteer work on
behalf of the venture or company. However, the individual cannot work
indefinitely for that company and earn a salary without obtaining
prior approval from the USCIS or DOL to work for the particular
venture or company."
" We have also seen groups of H1B holders join together to start
companies. While it is necessary to be extremely careful not to
violate one's status, at least in this situation there are more people
involved amongst whom to spread volunteer efforts and get the company
started. "

"There are no prohibitions under U.S. immigration law that would
prevent an individual who is foreign - indeed, someone who has never
set foot in the U.S., from serving as an incorporator, director, or
officer of a U.S. enterprise. Similarly, it is possible for
partnerships, limited liability, and other forms of organizations to
include members who are not U.S. citizens, residents, or in
non-immigrant status. It's the "working" the business that is

Can you start your company, while on an H-1B?
"Yes, you can. But you can't form an S-Corporation. For that you have
to be a citizen of USA. There are multiple ways of starting your own
company, but one of the most effective one is by incorporating
"Limited Liability Company" ( LLC ). You can find lots of companies on
the net which can do this. They may charge you around 150-200$, and
the procedure may take few days. LLC can be a "Partnership Firm" or
the liability protection as a "Incorporated Company". You can be the
Chairman or Director of the board, but you can't work for it, unless
you have an H1 visa issued from that company. But, you can always hire
a CEO for the company, who has a work permit (Green card or Citizen

"Having a business and working at it versus investing in a business
are two vastly different things.  Recieving the profit from an
investment is appropriate. Receiving a salary or other compensation
from a business is not appropriate.  The IRS takes the view that
regularly working for an entity (for a specific period every day,
etc.) constitutes employment.  The INS would typically follow suit,
employing the IRS definition.  If your clients set up a corporation,
perhaps paid a fee to someone to actually "run" the business, invested
in the business, and received the profit, then I can see that this
legal structure insulates your clients from direct "employment" and
thus could be permissible."

Remember, your priority is to keep your immigration status safe and
secure. When in doubt, err on the side of caution. If you feel in your
gut that you really should be being paid for your assistance, then you
are probably are putting your status in jeopardy. Pay attention to
your instincts.

I hope this is clear. If you have any questions, please post a
clarification request and wait for me to respond before closing/rating
my answer.

Thank you,

Google Search Terms Used: h1b h-1b start form own business corporation
volunteer work uscis temporary worker LLC
yygian-ga rated this answer:5 out of 5 stars and gave an additional tip of: $2.00
You are awesome! Thank you so much for providing the useful answer. It
really helps. Your answer is clear and straight to the point.  Again,
thank you.

Subject: Re: H1B opens a business in the USA
From: hummer-ga on 25 May 2006 03:01 PDT
Thank you, yygian, for your nice note, rating and tip! Good luck with
your clothing business. Sincerely, hummer

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