Creating a Business in the US on an H1-B Visa?

GnaGnaGna asks: "I've lived in the US for almost a year now and have a full time position with a major American company under an H1-B visa (work visa for foreigners). Besides this job, I also run an increasingly popular website generating AdSense revenues. I am not sure if I am allowed to create a US company (most likely an LLC), under my legal status, and transfer the Adsense profits to my personal bank account or a business bank account. Have my fellow readers faced a similar legal situation or know anything about it?"

As I'm sure eveyone else will say

[tx_kanuck]

Get a lawyer. There is nothing here that can really help you other then moral support.

Simple answer.

[jpetts]

No, you are not allowed to run a business while you are on an H-1B visa. You can be a passive investor in a business ONLY. If you do anything that is regarded as work that would normally be paid, even if you are not remunerated, you break the conditions of your H-1B, and are deportable under 237(a)(1)(C) of the INA. You may not receive anything other than normal shareholder dividends from the company, and you will need to declare them on your IRS return. Any attempt at covert payment through dividends is likely to attract unwelcome attention from the IRS, and possiby the USCIS.

Lots of people do what you are describing, but it is definitely 100% ILLEGAL, and you will most likely be deported and banned if you are caught.

Re:Simple answer.

[jpetts]

Forgot to add this: you CAN work for your company if, and only if the company files an approved H-1B for you as an employee of that company as well. You can have multiple H-1Bs: no problem there. However, there are lots of hoops to jump through, and it is not easy. Not sure exactly what it takes, but if you are bringing in significant amounts of cash, why not hire an immigration attorney? See the AILA web site [aila.org] for more detaisl.

Re:Simple answer.

[kakapo]

I had two H1-Bs for several years, one for my day job and one for some consulting I was doing on the side. It was not that hard - the first H1-B was for a job at a large university, and these are routinely approved. The second was for work with a small start-up spun off by another university, and that was tougher, since it was a small firm and they had not filed an H1-B petition before and they retained a very good immigration lawyer (who I then hired to do my green card application a year or so later).

The issue here is that a company with one part-time employee (ie the one you are thinking of registering) may have a hard job getting an H1-B application approved.

I would talk to a lawyer, but you *might* be safe if you register the company in your own country, and not to the US -- Google will pay out to other countries??

Worse...

[Xenographic]

Did you notice that the person who submitted this was named "GnaGnaGna"? I'm not convinced it's even a real question.

Re:Believe it or not

[Jah-Wren Ryel]

On an H1B, it is illegal for you to form a business that you are an active investor in. This is part of the "contract" you enter into to become an H1B. However, if you were an illegal alien, it would be just fine. For a prime example of this, check into the history of Philippe Kahn, founder of Borland Software Corporation, creators of Turbo Pascal.

It isn't really so unbelievable. For all the huffing and puffing over illegal immigration, the crime itself is relatively minor. That's one reason I have to laugh everytime a dittohead pops a vein about how illegal aliens are criminals just as bad as murders and rapists.

Overstaying a visa (which is how about 40% of illegal immigrants get here) is not even a criminal offense, not even a misdemeanor, just a civil offense like a speeding ticket. The guys who sneak across the border without ever getting a visa in the first place are only guilty of a misdemeanor.

Re:Simple answer.

[Alioth]

He would then become an illegal immigrant. While he may incorporate in his home country, he's still doing the work in the United States - so to be legal he would either need to be on an L1 intracompany transferee visa for the new company he incorporates back home, or on another H1-B visa for this new line of work.

The conditions as I understand them on the H1-B is that if you so much as mow a friend's lawn as a favour, you've just become an illegal immigrant. *ANY* work other than as specified by the visa is illegal, paid or not. It's not likely that you'll get busted and deported for mowing a friend's lawn. However, since you have to report your *worldwide* income to the IRS, the fact that you've just reported income for work that wasn't allowed by your H1-B visa will be a dead giveaway you've been working illegally. If you don't report this income, then not only have you worked illegally, you're now also guilty of tax evasion!

The questioner really ought to ask an immigration lawyer. But at the end of the day, unless he gets permission from the INS to do this work, if he wants to remain legal he should stop making money off his website now.