Generally, H1B visa holders can register US companies, own equity in US companies, and invest in any businesses. They must obtain work authorization if they would like to work for any US company as an employee or independent contractor. It can be done through a concurrent H1B work visa petition filed by their own company or by switching to an O1A work visa, assuming they have a record of outstanding achievements and qualify for O1A. There are also other pathways to a work permit for startup founders and entrepreneurs.
Review your H1B visa conditions
You cannot extend your job duties beyond the job duties as they were described in your approved H1B visa petition. You cannot directly provide personal services to other U.S. employers while working on H1B. Engaging in active work beyond your sponsoring employer’s authorized petition’s scope can lead to severe consequences, including deportation.
Don’t risk your future! Book a consultation with the attorney who will thoroughly review your current H1B status, assess your business goals, and help you figure out the best visa strategy and navigate the complexities of U.S. immigration law.
Navigate H1B restrictions
- Maintain a passive role. H1B visa holders can start a business but cannot be actively involved in day-to-day operations or management activities that constitute “work” under immigration regulations. Many H1B holders have successfully navigated these restrictions by remaining passive investors in their businesses and ensuring all operational work is done by others.
- Find a business partner. Many have found success by forming LLCs or corporations, placing U.S. citizens or green card holders in operational roles, and retaining passive ownership.
- If your spouse came to the U.S. on an H4 visa, they can take an active role in the business if you have an approved USCIS Form I-140 immigrant visa petition and obtain a work permit (EAD).
- File for a concurrent H1B visa. One potential workaround is when your startup company files a concurrent H1B work visa petition for you. This setup allows the visa holder to work concurrently for their original employer and the new company, assuming all legal requirements, such as prevailing wage, are met by both employers.
Decide on your company’s form of incorporation and familiarize yourself with U.S. tax laws
H1B visa holders typically choose to register a sole proprietorship, partnership, limited liability company (LLC), or C corporation. When choosing a structure, consider:
- Personal liability protection: Sole proprietorships and partnerships offer less protection than LLCs and corporations.
- Taxation: Sole proprietorships, partnerships, and LLCs offer pass-through taxation, while corporations face double taxation when the company’s profit is taxed first and then the owner’s income/pay is taxed.
- Control and flexibility: Consider how much control and flexibility you want in managing the business and how easily you can change ownership or structure.
- Cost and maintenance: Weigh the costs of formation, ongoing maintenance fees, and compliance requirements.
- Founding opportunities: If you plan to attract institutional investors or angels, register a C Corporation (LLCs cannot issue stocks, which limits fundraising strategies).
Register your business with the appropriate state authorities. It typically involves choosing a business name, filing necessary forms, paying registration fees, and obtaining an Employer Identification Number (EIN) from the IRS.
We have proven experts on your side. We will advise you on a proper business formation or tax specialist. Contact our office at info@stelmakhlaw.com.
Develop a detailed business plan
Outlining your business idea, target market, financial projections, and operational strategies in your business plan is crucial for obtaining financing and potential green card approval if you are interested in US permanent residency as an entrepreneur.
We can connect you with our expert business plan writers who help you ensure that your business plan meets the specific requirements of your O1A or immigrant visa petition and effectively showcases your entrepreneurial contributions.
We describe the key components you should include in your business plan here.
Plan your visa transition
Deciding when to change your visa status as an entrepreneur on an H1B visa depends on various factors, including your long-term plans for staying in the U.S., your business’s growth, and whether you can afford to pay yourself a salary and secure funding.
The right time to change your status from H1B is when you are ready to start work for your own company and pay yourself a salary. Here are some visa and green card options for H1B entrepreneurs going to work for their own companies:
- O-1A Extraordinary Ability Work Visa: This visa is ideal for entrepreneurs with a record of outstanding professional achievement. It requires extensive documentation. Your US company must file a petition for you as a beneficiary.
- EB-1A Extraordinary Ability Green Card: This is for those with outstanding professional achievements and talent seeking permanent residency. The evidence requirements are more rigorous than the O-1 visa, but it offers the fastest route to a green card. You can self-petition for an EB1a green card.
- EB-2 National Interest Waiver (NIW): This program suits entrepreneurs who can demonstrate that their executive work on their business will be in the U.S. national interest and would benefit the economy. It allows self-petitioning without going through a lengthy and procedurally complicated labor certification process.
- E-2 Treaty Investor Visa: This visa requires citizenship from a treaty country (not all citizenships qualify for E-2) and involves personally investing a substantial amount in a U.S. business. It is an excellent option for starting, managing, and developing their enterprise.
- EB-5 Immigrant Investor Program: Direct Investment: Requires a minimum investment of $1.8 million (or $900,000 in targeted employment areas) and the creation of at least ten full-time jobs. This leads to permanent residency if the requirements are met.
- International Entrepreneur Parole (IEP): To qualify, you must own at least 10% of the startup, play an active role in its operations, and secure significant U.S. investment. While this program doesn’t provide a direct path to permanent residency, it offers a temporary solution for entrepreneurs with high-growth potential startups who may not qualify for other visa options for some reason.
Navigating the complex process of transitioning your visa status as an H1B entrepreneur can be challenging. Still, with the right strategy, you can obtain a work permit, scale your business, and secure your future in the U.S. Whether you’re considering the O-1 Visa, EB-1A Green Card, EB-2 NIW, E-2 Treaty Investor Visa, or the EB-5 Immigrant Investor Program, the choices you make now will shape your immigration path.
Our experienced attorneys can help you develop a personalized strategy tailored to your unique situation. Book a consultation today, and let us guide you through securing the correct visa to support your business growth and long-term success in the U.S.
Are there many entrepreneurs in H-1B status in the U.S.? What kind of businesses do they start?
There are entrepreneurs on H-1B visas in the U.S., but since the H-1B visa is mainly designed for highly specialized professional workers employed by U.S. companies, the number of business owners on this visa is relatively small. However, some have successfully started businesses while on H-1B, navigating the challenges that come with it.
Tech startups: Many entrepreneurs come to the U.S. on an H-1B visa to work in tech and later transition to founding their startups, often by staying compliant with H1B visa rules until they can change their status to O1A or E-2 visa or secure permanent residency by self-petitioning for EB-1A or EB2 NIW immigrant visas.
Fintech: Financial technology startups, including those focused on payment solutions and cryptocurrencies, are popular among tech-savvy H-1B holders due to their lower overhead and scalability.
Consulting and services: Some H-1B holders launch businesses in IT consulting (like cybersecurity and data analytics) or specialized services (such as operations and marketing). These businesses often serve as a stepping stone toward obtaining an EB2 NIW green card.
E-commerce and online businesses: Many H-1B visa holders start online stores selling niche products or providing digital marketing services. These businesses can be managed passively by hiring others to work for them while the visa holder remains employed with their H1B sponsor.
Healthcare and wellness: Telemedicine platforms and businesses selling wellness products are also popular ventures for H-1B holders, allowing them to tap into the growing demand for health-related services.
E-learning and edtech: Entrepreneurs in this field create platforms for online courses and training or develop tools to support remote learning, catering to the increasing need for education technology.
Real estate and property management: Some H-1B holders invest in real estate and manage properties through third parties, staying within the bounds of their visa H1B visa restrictions.
Retail and consumer goods: Some invest in franchise businesses or open stores that sell specialty goods. This allows them to manage the business indirectly through others who handle day-to-day operations.
Food and beverage: Starting a restaurant or cafe is another route some H-1B holders take, typically involving family members or U.S. citizens in the management and operations.
Non-profit organizations: Establishing non-profits focused on community services, education, or cultural activities is another path for H-1B visa holders who want to contribute while staying legally compliant with H1B regulations.
While starting a business on an H-1B visa can be challenging, carefully planning makes it possible. At Stelmakh & Associates, we can provide tailored advice, evaluate eligibility for alternative visa categories, and help develop a strategic plan that aligns with your business and immigration goals. Call our office now to discover your options +1 (206) 605-0550.
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