Starting a Business while on H1-B

[seahawks2012]

I bet this question comes on mind of every person on H1-B who is stuck on this forever loop of the EB-Priority construct.
Even something as simple as writing an APP that charges few bucks, is restricted due to H1-B policies.

That's where formalizing the effort as a "Business" venture is required by law.
Based on my few minutes of Bing searches, it is necessary to:

1. Explore your company's moonlighting policies (make sure the work doesn't compromise
2. Register a company (C-Type, LLC etc.); You cannot "work" for this company or actively manage this company but you can be "Director of the Company's Board"
3. Hire a lawyer to file a concurrent H1-B on behalf of "your" company to employ "you"
4. Only after this concurrent H1-B application is accepted by USCIS, you are allowed to participate in software efforts from which you can "earn money"

I am starting this thread to confirm my findings & start a discussion thread for legal efforts that you may have taken and would like to share the result or understanding.
It would be good to not "Reinvent the Wheel" by sharing the basics with everyone.

Has anyone tried the above steps? If yes, was it approved by USCIS?
If you are aware of any other approach to legally earn money from Apps, Blogs Etc. then please do share.

Thanks!

[Pedro Gonzales]

I'm very surprised with '2' above. I am a member in an LLC (not a single member LLC so maybe that is okay) which is an incentive pay mechanism at my firm. However, I never looked into the legality of this, and I'm sure my employers didn't either. If you see anything further on that in your research, let me know, and i'll do the same.

[qesehmk]

seahawk - I think what you have listed is mostly incorrect especially #2.

Anybody can start a business in US regardless of visa status. The only exception might be illegal ones.

One can start a business in US while having never visited US through your surrogates in your name!

So F1 F2 H1 H2 H4 - as long as you in some valid visa status you can start a business.

As per salary - my understanding is - if you want to draw salary from that business then just like any other business you will need a work authorization (H1 EAD GC Citizenship etc etc). However you can draw profits from that business without ANY work authorization!!! So now the question is - can you actually work in your own business? I think yes since that is again business not a job.

If you find evidence of otherwise I would be very interested!

[seahawks2012]

Q & Pedro, you are correct. #2 in my original post is incorrect. It is possible to start LLC as well.

However, the following restriction is still in place:
"You can form a company & be a director of the company, but you cannot work for that company"
To work for a company that you started, typically USCIS would not grant a concurrent H1-B if you have 50% or more stake in the company.

It apparently is even more difficult to work for your own LLC as per USCIS guidelines.
The following links are helpful:

Intro:
http://danashultz.com/blog/2009/12/24/visa-basics-for-foreign-entrepreneurs-coming-to-the-u-s/

Can you "own" a company?
http://danashultz.com/blog/2011/05/06/can-i-get-an-h-1b-visa-working-for-my-own-company/

What constitutes "work":
http://danashultz.com/blog/2011/01/18/visa-basics-for-foreign-entrepreneurs-part-2-what-constitutes-work/

Getting Tax EIN:
http://danashultz.com/blog/2009/11/30/foreign-company-alert-obtaining-an-ein-may-be-your-biggest-challenge-in-the-u-s/

Some lengthy USCIS memo around this topic (haven't read it):
http://www.uscis.gov/USCIS/Laws/Memoranda/2010/H1B%20Employer-Employee%20Memo010810.pdf

[qesehmk]

Thanks Seahawk. That makes sense. Just remember "working" here is defined as work that draws salary. You can work for your business as owner and draw profits without any problem.
Q & Pedro, you are correct. #2 in my original post is incorrect. It is possible to start LLC as well.

However, the following restriction is still in place:
"You can form a company & be a director of the company, but you cannot work for that company"
To work for a company that you started, typically USCIS would not grant a concurrent H1-B if you have 50% or more stake in the company.

It apparently is even more difficult to work for your own LLC as per USCIS guidelines.
The following links are helpful:

Intro:
http://danashultz.com/blog/2009/12/24/visa-basics-for-foreign-entrepreneurs-coming-to-the-u-s/

Can you "own" a company?
http://danashultz.com/blog/2011/05/06/can-i-get-an-h-1b-visa-working-for-my-own-company/

What constitutes "work":
http://danashultz.com/blog/2011/01/18/visa-basics-for-foreign-entrepreneurs-part-2-what-constitutes-work/

Getting Tax EIN:
http://danashultz.com/blog/2009/11/30/foreign-company-alert-obtaining-an-ein-may-be-your-biggest-challenge-in-the-u-s/

Some lengthy USCIS memo around this topic (haven't read it):
http://www.uscis.gov/USCIS/Laws/Memoranda/2010/H1B%20Employer-Employee%20Memo010810.pdf

[Spectator]

Thanks Seahawk. That makes sense. Just remember "working" here is defined as work that draws salary. You can work for your business as owner and draw profits without any problem.Q,

I would agree you can own a business, employ others and draw profits, but you CANNOT work for that business (as in any effort that produces the goods or services).

That is defined as self-employment and requires appropriate Employment Authorization.

Employment or work does not need to involve a "salary".

This Murthy article (http://www.murthy.com/2012/12/11/home-based-businesses-inadvertent-unauthorized-employment/) attempts to discuss the potential minefields.

Here is a small extract


It is not necessary that one work for an existing business as an employee in order to be engaged in unauthorized employment. When an individual establishes a business, even on a part-time basis from home, s/he is considered to be working in the United States. Thus, if s/he is present in a status that does not allow employment or that only permits employment with a specific sponsoring employer, such an individual is engaging in unauthorized self-employment. This is also the case even if the involvement is fairly passive, such as in some internet-based businesses and certain multi-level marketing operations.

As it pertains to seahawks original post, it also says


This same analysis can be applied in various income-generating technology areas. We have received a variety of questions related to technology, specifically pertaining to payments based on "views" of social media creations or traffic to a website. Other questions surround the creation of certain apps. There is a line between creating apps or web content as a hobby and doing it for the purpose of income generation. While it can be hard to define the limits, when one exceeds those limits, immigration problems can be created due to unauthorized employment. Thus, it is best to be very cautious in this area.

[qesehmk]

Spec - I am not sure I agree with that - even if Murthy says it. Especially because the simple fact behind work authorization is to not control all kinds of work but to control people being employed in the jobs in the marketplace.

Now when a person creates a business - clearly he is creating a marketplace. Why would USCIS want to control creation of a marketplace? At worst I think this would be a grey area. At best - one should be able to work for their own business without drawing salary regardless of status.

Now mine is commonsense and again I could be wrong. But I just don't think Murthy is right especially this particular sentence...



When an individual establishes a business, even on a part-time basis from home, s/he is considered to be working in the United States.



Q,

I would agree you can own a business, employ others and draw profits, but you CANNOT work for that business (as in any effort that produces the goods or services).

That is defined as self-employment and requires appropriate Employment Authorization.

Employment or work does not need to involve a "salary".

This Murthy article (http://www.murthy.com/2012/12/11/home-based-businesses-inadvertent-unauthorized-employment/) attempts to discuss the potential minefields.

Here is a small extract



As it pertains to seahawks original post, it also says