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Investing in and starting companies while on an H1B visa is not prohibited but it can be challenging. There may be hurdles that you have to jump through and you have to be careful that your activities do not cross into “unauthorized work” and compromise your status.
Can I invest in a startup while I am on an H1B?
Passive investing is generally permitted while on an H1B and not considered unauthorized employment. Thus, you can invest in a startup or company as long as you do not draw a salary from the company and do not actively “work for” the company. Hire an attorney to help you in your business dealings and also check with your immigration attorney to make sure your involvement doesn’t run afoul of your visa status.
Can I start my own US-based start up while I am on an H1B?
Immigration status does not restrict your ability to incorporate a US company (e.g. LLC, C-Corp). Non-citizens, non-permanent residents, and non-residents can usually open US companies with ease. The exception is S-corps, which do not allow foreign ownership.
Can I draw income from a US-based start up while I am on an H1B?
While on an H1B, you can draw passive income from any business you have invested in, including US-based companies and foreign-based companies. However, what you can’t do is actively or materially be involved with, work for, or draw a salary from a company that is not your H1B visa sponsoring company. Also make sure you are paying taxes on your income!
If you earn any additional sources of income, you will need to pay additional income taxes.
Need an experienced tax preparer who is an expert in advising visa holders?
Learn more about MYRA's Tax Preparation services.
Can I leave my H1B sponsoring employer to work for my own company? Can my own company sponsor my H1B?
If you leave your H1B visa sponsoring employer, you will need to find authorized employment with a new sponsoring company that is authorized on your I-129 Form. In theory, that company could be your company but it can be approved only under a narrow set of circ*mstances. An employer that hires an H1B visa worker must be in a position to have the “right to control” the employee (you). That is by definition not a company in which you control 50%+ of the shares. You can’t hold a job in which you are the person who determines whether you have a job! There needs to be a hire-fire relationship that exists. There are some ways to create a permissible hire-fire relationship within ‘your own’ company that may pass muster in order to secure H1B sponsorship. For instance, you could have a Board of Directors that has explicit hiring and firing control and can replace you and you could also have a co-founder that owns more than 50% of the company’s shares and can hire-fire you. It’s always best to hire an attorney for help establishing ownership in any company, especially if it could put your visa status in jeopardy.
What are some case examples?
Some individuals who have tried to engage in the ownership and operation of businesses have run afoul of the law. In a case in 1983, Wettasinghe v. United States Department of Justice Immigration & Naturalization Service, the plaintiff lost because he was actively involved in running an ice cream business. However, in a 1981 court case Bhakta v. Immigration & Naturalization Service, a court found that a foreign national did not engage in “unauthorized work” while he owned a motel chain because he was not actively involved in the management of the chain.
An alternative strategy: EB5
If you have a significant amount of money to invest, you might look into an EB5 investor visa.
Related Articles
- The EB5 Investor Program - Read Here
Summary of Investing and Starting Companies on an H1B
- Stay employed with your H1B employer
- Be sure your involvement in the business is as a passive shareholder or investor
- Make sure someone else is running the business day to day
- Be careful about using your own company to sponsor your H1B visa - it isn’t easy!
Here are two helpful memos that USCIS issued to try to clarify the policies about an H1B worker starting their own company:
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FAQs
Yes, you can start a company on H1B. But you cannot work for that company or be involved in any day-to-day activities of the company. Basically that means, you can start it, get a manager, invest in it, and then sit back and only get a return on your investment. You cannot perform any duties of an employee or manager.
Can I start my own company on H-1B? ›
Can I Start My Own Business as an H-1B Visa Holder? Yes, if you are on an H-1B visa status, you are allowed to start your own business. However, the process is not as straightforward as you think, and while on an H1B visa, you can only operate your business in limited scope as permitted by your visa.
Can I invest in business on an H1B visa? ›
Investing in and starting companies while on an H1B visa is not prohibited but it can be challenging. There may be hurdles that you have to jump through and you have to be careful that your activities do not cross into “unauthorized work” and compromise your status.
Can I be a founder of a company on H-1B? ›
You can certainly start a startup company on an H1B or no status at all. What you cannot do is do a single smidge of work for that startup. You can only do passive activity for the startup that does not involve productive work of any kind.
Can an H1B visa holder start an LLC to invest in real estate? ›
While some may believe that you cannot own an LLC and use it to hold rental properties, our team of lawyers has told us that there are no specific restrictions against doing so. The main restriction is what we already covered in a prior article: you cannot employ yourself in a company that buys and sells real estate.
Can I create LLC on H-1B? ›
Therefore, H-1B visa holders can indeed start an LLC, but it must be managed within the constraints of their visa status to remain compliant with U.S. immigration laws.
Can I have a side hustle on H-1B? ›
While you are on an H1B visa, you can work only for your authorized employer specified on your I-129. However, there may be reasons that you want to generate additional income outside of your work. Most ways of generating additional income on an H1B visa are prohibited.
Can I drive Uber on H-1B? ›
No, H1B visa holders cannot become Uber drivers because of the employment restrictions on H1B visas. While H1B visa holders can meet all of Uber's requirements (like having a certain type of car, a license, and a SSN), driving for Uber would violate the terms of their H1B visa.
Can H-1B buy gas stations? ›
However, the ownership must be passive. This means that you cannot partake in any operational activity. If you wish to purchase the the gas station you may, but you will need to have a manager who conducts 100% of the operations for the business. The H1B visa owner can not participate in any way.
How much does an H-1B sponsorship cost to a company? ›
Table 1: H-1B Legal and Government Fees For Employers
| Type of Cost | Price of Fee or Service |
|---|
| Visa Application (cost based on reciprocity) | $190 ($0 - $800) |
| Additional Cost to Sponsor Employee for Permanent Residence | $10,000 to $15,000 or more |
| TOTAL | $4,535 to $17,885 for initial petition |
| $7,165 to $33,365 for initial and extension |
10 more rowsFeb 22, 2024
USCIS uses random selection when company H-1B registrations exceed the annual limit of 85,000. That includes the 65,000 annual limit and a 20,000 exemption for advanced degree holders from U.S. universities. The 85,000 limit for new H-1B visa holders equals 0.05% of the U.S. labor force.
Can H-1B sell on Etsy? ›
Selling objects on Etsy would probably violate the terms of your H1B visa because you need to actively participate to sell and process orders. However, you can earn "Passive income" while on H1B.
Can a single person start a company in USA? ›
Save this answer. Single owner limited liability companies and single owner corporations are permitted under U.S. law and provide full limited liability protection.
Can I start a business on an F1 visa? ›
Technically, a student on an F-1 visa can form a startup or business. However, they can't actively work for the company, or earn income from it, unless their work falls under the guidelines for CPT or OPT. Do you get it? However, the laws and regulations around these topics are complex and can change often.
Can an H-1B work for 2 companies? ›
Yes. An H-1B visa holder can work for two or more employers. Of course, this is only possible through the second concurrent H-1B application. The H-1B visa holder will have to file an H-1B petition to the USCIS via their new employer to work both jobs.
