Starting Own Company on H-1B Visa

Many H-1B visa holders are asking the question, “Can I start my own company while I am on H-1B visa?” The short answer is “No, because the terms of the H-1B visa allow a foreign national to work only for the sponsoring employer.”

While there may be other ways in which a foreign national on H-1B visa can legally have a company and receive income from it, an H-1B visa holder should be careful not to engage in any unlawful employment because this may jeopardize his or her status.

Generally, a foreign national on H-1B visa may work only for the sponsoring employer. This, unfortunately, precludes most types of activities that an H-1B individual may wish to engage – consulting, running small business, or even assisting a company for non-monetary gain. While the Citizen and Immigration Services (USCIS) are unlikely to be going after an H-1B holder who spent a couple of hours helping his neighbor’s home based business by setting up a computer network in exchange for a dinner or a small gift card, anything that formally resembles like active employment for monetary gain is likely to be considered unauthorized employment.

One of the most obvious ideas is for the H-1B foreign national to start her own company and possibly have the new company issue a second H-1B visa for the owner. However, this strategy may not work because running a company is not an occupation which requires a bachelor’s degree and therefore an H-1B visa approval is unlikely.

What is possible then? Anything that does not involve active participation by the H-1B holder is permissible. For example, forming own company and hiring somebody else (who is legally authorized to work) to run it is fine even when the company makes profit and the H-1B individual receives it. This is no different than investing $1,000 into stock of Microsoft which is considered passive investment. The legal line is crossed, however, when the H-1B owner gets involved in the operation of the company.

Another option is to form a foreign (presumably in the home country) company and, after meeting all requirement, creating a US subsidiary of the foreign company and applying for an L-1 visa.

As always, a consultation by an immigration lawyer is extremely helpful especially considering the dangers of engaging in unauthorized employment and putting the H-1B status in danger.