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Starting Your Own Business While on an H-1B Visa

 

Starting Your Own Business While On An H-1B Visa

Are you an H-1B employee considering launching your own U.S. based company? Bringing together our expertise in U.S. immigration and startups, we’re here to help you get started!

 

H-1B Visa Overview

The H-1B visa is a nonimmigrant visa that enables foreign nationals to work for a U.S. company. The H-1B visa employer-specific. In other words, each H-1B is only valid for one specific company.

You cannot work for numerous companies while on H-1B status, so starting your own company can seem like a tricky task. Fortunately, it is very possible to set up and launch a new company without work authorization, as long as you do not “work” for the company before getting a visa. What constitutes “work” and how can you set yourself up for success for future visas? We’ll get into that shortly!

H-1B Visa Requirements

Before we discuss starting a new company as an H-1B visa holder, let’s review the H-1B visa requirements.

Valid job offer: To qualify for an H-1B (or any work visa), you must have a valid job offer at a company that is legally incorporated in the U.S.

Specialty occupation: Your job offer must be for a role that requires a Bachelor's degree (or higher) in a related field, and you must have the required degree. For example, if you will be the Chief Marketing Officer, the position must require at least a Bachelor's degree in Business, Marketing, or another related field.

Employer-employee relationship: Although you can get a work visa at a company you found, you cannot be self-employed. U.S. Citizenship and Immigration Services (USCIS) differentiates between self-employed workers and eligible employees by looking for an employer-employee relationship. If you are a founder, you can demonstrate an employer-employee relationship if you own less than 50% of the company or have a Board of Directors.

Prevailing wage requirement: Your company must be able to pay you a salary that meets or exceeds the Department of Labor's minimum wage level in the U.S. county where you will work.

As you consider founding a startup, remember these H-1B requirements. For example, you might be a Software Engineer at a large tech company. While your background qualifies you for that role, it might not qualify you for the role you want to hold at your startup. If you want to be CEO at your new company, you will need a relevant degree, and your startup will need to pay the prevailing wage for CEOs in your area.

 

Roadmap to Launching a Startup on an H-1B Visa

1: Understand what you can and cannot do for your startup while employed at your current H-1B employer

You cannot actively “work” for another U.S. company without work authorization (such as an H-1B sponsored by that company). For example, if you do not have work authorization for a company, you cannot:

  • Be paid by the company
  • Be involved in hands-on product development
  • Write code for the company’s product
  • Be involved in direct management of staff or any other aspects of the day-to-day operations
  • All of these points apply to working at American and foreign companies while inside the U.S. on an H-1B visa.

What you can do is engage in passive work, which includes activities such as:

  • Conducting market research and customer discovery
  • Discussing planned investments and purchases with prospective co-founders
  • Attending and participating in business meetings
  • Developing business relationships, such as meeting with investors and clients
  • Negotiating contracts
  • Incorporating a U.S. company, applying for an EIN, establishing a mailing address, and applying for a business license
  • Act as a passive shareholder or investor

When in doubt, seek legal advice from an immigration attorney to ensure you do not violate your status.

2: Recruit co-founders or other U.S. workers to handle day-to-day operations

Considering what you can and cannot do for your startup, consider recruiting co-founders or employees that are U.S. citizens or green card holders. While you work on obtaining work authorization, your team can handle day-to-day operations.

3: Maintain your current H-1B status

The H-1B visa allows you to stay in the U.S. as long as you remain employed by your sponsoring U.S. employer. Until you are ready to get a visa for your new business, continue to work for your current employer so that you can maintain your H-1B visa status. Failure to maintain your status could result in you needing to depart the U.S.  

4: File an H-1B petition sponsored by your company

Once you are ready to switch to full-time at your startup, your company can file an H-1B transfer petition for you.

The H-1B application can take anywhere from a few weeks to a few months to be approved by USCIS. However, when filing an H-1B transfer to a new company, you can begin working for the new company as soon as the visa application is filed with USCIS. Alternatively, you may decide to wait until the petition is approved just in case the transfer is unsuccessful.

H-1B Visa Holder: Founder Example

Let’s look at a scenario where you could potentially obtain an H-1B through your own company.

You’re currently working at a major tech company as a software engineer, and you want to build your own startup. You’ll first need to set up the business. Because you own 75% of the equity, you must form a Board of Directors.

You’ll continue working at your current employer until your new company files the H-1B transfer petition. At that point, you can decide if you want to start with your company based on the H-1B filing, or whether you want to wait until the H-1B transfer is approved before making the transition.

Alternative Nonimmigrant Visas for Founders

The H-1B visa is not the only option for you to start a company in the U.S. You can also explore other U.S. nonimmigrant status options, such as:

  • O-1 Visa: The O-1 is favored for its unlimited extensions and flexible criteria. Many venture-backed founders qualify for the O-1 visa without even realizing it!
  • E-2 Visa: If you are from a treaty country, you may be able to secure an E-2 visa by investing in your company.
  • Green Card: The green card process can take years, but once you become a permanent resident, you can legally work for any U.S. company. If you don’t need to work for your startup immediately, you may consider beginning the green card process now.

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About the author:

Annie Blay

Content Marketing Specialist

Before joining the marketing team, Annie helped over 60 Legalpad clients navigate U.S. immigration on the client services team.