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Businesses United States

Creating a Business in the US on an H1-B Visa? 103

Posted by Cliff
from the building-the-american-dream dept.
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?"
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Creating a Business in the US on an H1-B Visa?

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  • by tx_kanuck (667833) on Tuesday February 13, 2007 @01:03AM (#17993378)
    Get a lawyer. There is nothing here that can really help you other then moral support.
  • Cliff, come on.. (Score:5, Insightful)

    by molo (94384) on Tuesday February 13, 2007 @01:04AM (#17993392) Journal
    Cliff, please explain why this is a good "ask slashdot" question. This is obiously something that should be referred to a lawyer. It is hard to believe that this was the best question you had in the queue.

    -molo
    • It's not worth getting a lawyer if everyone tells you "not a fscking chance!".
    • Worse... (Score:3, Informative)

      by Xenographic (557057)
      Did you notice that the person who submitted this was named "GnaGnaGna"? I'm not convinced it's even a real question.
      • Did you notice that the person who submitted this was named "GnaGnaGna"? I'm not convinced it's even a real question.

        That's the account for Mr. Stalman's doo-wop quartet.
    • While you might find it a bad Ask Slashdot, I for myself am pretty interested in seeing any sensible replies. That is, more sensible than the obligatory "bad question blah blah".
    • Re: (Score:1, Offtopic)

      by twistedcubic (577194)
      I wish users could pick the ask slashdot questions. Alas, starting a new site wouldn't work because it won't have the same traffic as slashdot. We lose.
  • Simple answer. (Score:5, Informative)

    by jpetts (208163) on Tuesday February 13, 2007 @01:08AM (#17993418)
    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. (Score:4, Informative)

      by jpetts (208163) on Tuesday February 13, 2007 @01:14AM (#17993466)
      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. (Score:4, Informative)

        by kakapo (88299) on Tuesday February 13, 2007 @01:26AM (#17993560)
        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??

        • by quoll (3717)
          OK, this answer is pretty straightforward. How about spinning it a little differently:

          I'm on an E3 visa. This is almost identical to an H1B, only my wife is entitled to work as well (she can work for anyone, and has a funky little holographic card to prove it). She wants to start her own business in a similar way to what's described here. Would that be allowed? We thought it would be.

          Yes, we'll talk to a lawyer, but most haven't heard of the E3 yet, and I want to waste as little money as possible.
      • Re:Simple answer. (Score:4, Interesting)

        by TheWanderingHermit (513872) on Tuesday February 13, 2007 @01:27AM (#17993572)
        Okay, so it's not something you can do in America. But if it's a web based business, why not take the steps to form a corporation in your home country, get a relative to help you with the paper work, and run it from here? That way you're running a business in that country and not here. Have the money go to an account in a bank there. That way if you can't stay, you don't lose anything and in the meantime, might make some good contacts that can help you when you're no longer in the USA.

        I'm not familiar with the H-1B, so it's also possible the terms restrict you from holding positions in your country while working here. I don't know and I'm not sure, but I thought I'd make the suggestion.
        • by Malc (1751)
          Still need to talk to a laywer - where's the tax liability?
          • Yes, he still needs to talk to a lawyer, but if the income is from a business in his country and goes to an account in his country, and if he spends it there instead of here, then there won't be tax issue, will there?
            • by Malc (1751)
              No idea. I've know of Canadians who live in Canada and work in the US (commute across the border every day) who are taxed in both countries. I lived in Canada working for an American company without ever visiting the US, and only had a liability in Canada (treaty exemption).
        • Re: (Score:3, Informative)

          by Alioth (221270)
          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
    • Its also arguably Gross misconduct and could well get you the sack (fired with cause) from your real job.
      I doubt many employers would look kindly on there employees having outside jobs espesialy if you useing company resources to run said company.
  • I recommend that you use the time you have in the US to woo some VC capital.. maybe even sell your website to interested parties. If you get busted, so what? The INS will probably not renew your H1B in any case.

  • Believe it or not (Score:4, Interesting)

    by stox (131684) on Tuesday February 13, 2007 @01:20AM (#17993510) Homepage
    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.
    • Re: (Score:3, Informative)

      by Jah-Wren Ryel (80510)
      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 lau
      • Overstaying a visa (which is how about 40% of illegal immigrants get here)

        And thanks to the sluggish immigration system, a large part of the legal immigrants end up doing so as well.
      • by joshetc (955226)
        And the march on DC was an invasion of a foreign army on our nations capital, what type of crime is that?
      • 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.

        The illegal status is one issue, but the bigger problem is the crime represented by the illegal population.

        On average, illegal immigrants kill 25 American citizens [house.gov] every day. That's more than soldiers dying in Iraq - that's 12-14 times the number of people dead since 9/11 than died on 9/11.

        So, what's really a bigger problem, terrorism or illegal immigration?

        Or are 9,
        • >> On average, illegal immigrants kill 25 American citizens every day.

          So you're saying we should let in 25 immigrants each day to replace them.
        • On average, illegal immigrants kill 25 American citizens every day. That's more than soldiers dying in Iraq - that's 12-14 times the number of people dead since 9/11 than died on 9/11.

          Those numbers are made up by people with an interest in skewing the results. There is no formal statistically sound basis for those claims. But you are quoting a fear-mongering politician, what do you expect?
          • Those numbers are made up by people with an interest in skewing the results. There is no formal statistically sound basis for those claims. But you are quoting a fear-mongering politician, what do you expect?

            As I understand it the government has been prevented from keeping a close tally on this, so the numbers given are the best available data. Even if they're not exactly right it's still a problem. Even if it's off by an order of magnitude (900 instead of 9000) it's still a problem.

            Let's say it is off by
            • As I understand it the government has been prevented from keeping a close tally on this

              Yeah, prevented in the same way that atheism is a religion.

              so the numbers given are the best available data

              Crap is crap, it doesn't matter if it came out of a prince or a pauper, it is still just as useless.

              Even if they're not exactly right it's still a problem. Even if it's off by an order of magnitude (900 instead of 9000) it's still a problem.

              No, not really. Given the estimates of the number of illegal aliens in the U
              • Yeah, prevented in the same way that atheism is a religion.

                I'm going to have to give you that picture of the bunny with the pancake on his head. But to elucidate, it's clear that those in charge of the executive branch don't want to stem the tide of illegal immigrants and they set policy. Far be it from politicians to set policy that supports their positions.

                Crap is crap, it doesn't matter if it came out of a prince or a pauper, it is still just as useless.

                Numbers with error bars are better than putting o
                • I'm going to have to give you that picture of the bunny with the pancake on his head. But to elucidate, it's clear that those in charge of the executive branch don't want to stem the tide of illegal immigrants and they set policy. Far be it from politicians to set policy that supports their positions.

                  Aethism is no more a religion than not collecting stamps is a hobby. In other words there has been no law passed, no directive made, no active intervention that PREVENTS the collection of these statistics. Ev
                  • So, your argument boils down to - illegal immigrants are not saints, so they should burn at the stake.

                    Wow! That you would equate being denied illegal entry to a country and burning at the stake is simply astounding. Enforcing immigration law is not a path to a police state, it's the rule of law which is the basis for our stable, productive society. There are plenty of anything-goes societies available on Earth if that's preferable - Somalia is especially good since it doesn't have a functioning governmen
                    • That you would equate being denied illegal entry to a country and burning at the stake is simply astounding.

                      That you would equate illegal entry to a country with murder and vehicular manslaughter is simply astounding. See my original post about popping a vein because you just did.
                    • That you would equate illegal entry to a country with murder and vehicular manslaughter is simply astounding.

                      So when I say that illegal immigrants kill Americans, that's astounding but when you say stopping them is "burning them at the stake" that's, what, reasonable?

                      See my original post about popping a vein because you just did.

                      See, what I did was point out a logical non-sequitor in your argument. What you just did was an ad hominem attack. If I was interested in that I would have gone right for the link
                    • So when I say that illegal immigrants kill Americans, that's astounding but when you say stopping them is "burning them at the stake" that's, what, reasonable?

                      No neither are reasonable because they are the exact same argument. All I did was ape your own argument substituting different perps and different victims and you suddenly saw the light about how ridiculous your argument was, you just didn't realize it was your argument.
                    • All I did was ape your own argument substituting different perps and different victims

                      Um, changing the subject and the object of a sentence changes its meaning.
                    • Um, changing the subject and the object of a sentence changes its meaning.

                      Lol, is that the best you can do? Cognitive dissonance must really have y'all shook up. The groups of people changed, but the severity of their 'crimes' did not, thus the meaning stayed the same.
            • by avronius (689343) *
              Maybe you should re-evaluate the story here http://www.thecarpetbaggerreport.com/archives/920 1 .html [thecarpetb...report.com]

              Using the numbers [from the same data] it would appear that you discount the 75% of Americans who are killed by non-immigrants as "OK"?

              From comments on the article that I've linked:

              Based on King's numbers, the vast majority of murders in the United States are caused by non-immigrants. So either we let in more immigrants--thus watering down the murder rate--or we start getting rid of bona fide U.S. citizens.

              • Using the numbers [from the same data] it would appear that you discount the 75% of Americans who are killed by non-immigrants as "OK"?

                Of course not. It doesn't follow that if you remove the illegal immigrants those people would be killed anyway. There's no daily quota on murder.
              • Maybe you should re-evaluate the story here http://www.thecarpetbaggerreport.com/archives/920 1 [thecarpetb...report.com] .html [thecarpetb...report.com]

                Sorry, I hit submit by accident.... reading this article I see they're equating arrested murderers with murders. Those are two different numbers. If the murderer isn't caught he's not in the statistics. A good argument they could make is proving the immigration status of of those who weren't caught.
                • by avronius (689343) *
                  I think that I understand what you were getting at, but I don't believe that immigrants are any worse [or any better] than anyone else. We have immigrants up here in Canada, too. A small percentage feel the need to gather in groups of isolated ethnicity for the purpose of defence or agression. Gang activity existed long before their arrival, but these groups become a convenient scapegoat for *all* gang activity.

                  These problems will exist regardless of whether or not you allow new people to populate your land
                  • Your initial post suggests a rather xenophobic view point

                    You're making the classic mistake of confusing opposition to illegal entry with an opposition to immigration. I'm a huge proponent of immigration, and as we typically get the cream of the crop coming here legally, it improves our society greatly. You can check my comment exchange with an H1B worker from a few days ago if you're uncertain (on the H1B story). Heck, four of my great grandparents were immigrants. On the other side you have to go back
        • On average, illegal immigrants kill 25 American citizens every day.

          Thats 12 murders and 13 road accidents, even if we believe the numbers that produced out of thin air with no citations. I see no reason to believe it because a politician says so - in case you did not know, it is not unknown for politicians to distort numbers, and these could be distorted in a number of ways.

          Given how good Americans are at killing each other both by murder [usdoj.gov] and in road accidents. [driveandstayalive.com], the illegal immigrants contribution is no

          • Given how good Americans are at killing each other both by murder [usdoj.gov] and in road accidents. [driveandstayalive.com], the illegal immigrants contribution is not huge.

            It may not be huge statistically but if it's > 0, it's unnecessary, and tragic for the families of those affected.
      • 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.

        A speeding ticket is a class B misdemeanor. Look it up. A "civil offense" is something you can get sued by a private individual for, a "criminal offense" is something you get a subpoena from a court officer, with bail, court appointment, fine, or jail time for. Criminal offenses are divided into midemeanors or felonies- the first
        • A speeding ticket is a class B misdemeanor. Look it up.

          I have looked it up. You are wrong. Here's one source out of thousands:

          A traffic infraction is a civil violation such as your basic speeding ticket.
          DUI & Traffic Crimes [foryourlaw.com]

          Most states don't have the jail space for illegal aliens, so in the past 30 years, even though it's officially listed as a FELONY, it's become in practice a MISDEMEANOR.

          One of thousands of cites that disagree with you:

          mere status as an alien, or even as an illegal alien, may only

          • I have looked it up. You are wrong. Here's one source out of thousands:

            Wow, I knew the East Coast was rather relaxed by Pacific Northwest standards, but I didn't know it was THAT relaxed! It said very clearly on my last speeding ticket that it was a Class B misdemeanor- no wonder people are surprised by Oregon's trafic ticket fines (which start at $88 for minor offenses like a light out, and can easly exeed $2000 for driving 100 in a 65 zone).

            One of thousands of cites that disagree with you:

            A misdeme
            • Wow, I knew the East Coast was rather relaxed by Pacific Northwest standards

              Try WA, CA, IL, HI, and TX as non-east coast states where speeding tickets are civil. I am sure there are plenty more, those are just the ones where I lived and looked it up at the time.

              And as for the NY Attorney General- well, he's not federal is he? NOR does he have anything to say about immigration, which is a FEDERAL offense, which in practice, is nothing more than a cite-and-realese, albeit release in country of origin.

              Would y
              • Would you PLEASE back up your claim with a citation that shows overstaying a visa is a federal FELONY as you originally claimed.

                Well, I'm not real sure it is. But that's how the 1986 Amnesty deal was sold to the American citizenry- that they were going to let a bunch of people become citizens, and in return, from here on out they were going to arrest & deport every new illegal immigrant. Ok, after researching, I seem to have had it wrong. Giving an illegal alien a job [nytimes.com] was what was supposed to have b
                • Now you tell me- is it right to break a law merely because it is unenforced?

                  Hello? Who said it is unenforced? You just admitted that it isn't even a misdemeanor, it is a civil violation aka not a crime.
                  • Hello? Who said it is unenforced?

                    Mainly guards at the border- who aren't even issued AMMO anymore. The Congress, which over and over refuses to adequately fund ICE enough to track people on visas to begin with and deport them when their visa runs out. The 200 prisoners of ICE sitting on their buts in an Idaho Jail, because they've figured out if they never fill out the form listing Country of Origin, ICE doesn't have the resources to find out where they came from, and thus can't deport them. The poor L
                    • Mainly guards at the border- who aren't even issued AMMO anymore.

                      Sounds like a damn good thing too. We would never stand for the police shooting people who commit other misdemeanors - if the cops shot a shoplifter or someone with an open bottle in public, that cop would be fired right away. As long as illegal entry into the country is classified as a misdemeanor, we had better not be shooting at them. And don't give me any silliness about drugs, because the DEA has plenty of ammo.

                      And you are so special
                    • Sounds like a damn good thing too. We would never stand for the police shooting people who commit other misdemeanors - if the cops shot a shoplifter or someone with an open bottle in public, that cop would be fired right away. As long as illegal entry into the country is classified as a misdemeanor, we had better not be shooting at them. And don't give me any silliness about drugs, because the DEA has plenty of ammo.

                      The DEA isn't on the border- another deriliction of duty. The country that cannont contro
          • by Samrobb (12731)

            Next time you want to prove someone wrong, you should actually check your facts by posting them in your rebuttal. Otherwise you end up wasting everyone's time.

            And next tome you want to cite something, please don't yank a phrase out of context to prove your point. The full text of the conclusion of the "Opinion of the NY Attorney General" that you cited states (emphasis mine):

            New York State law enforcement officials may make arrests without warrants for criminal violations of the federal Immigration an

            • Go back and read my initial post before you go on about yanking a phrase out of context. The context you provided is exactly in sync with my initial disputed claim that overstaying your visa is a civil offense.
            • While you are at it, go back and read Marxist Hacker's claim that being an illegal alien is a FELONY - by your own words, the context of the NY AG's opinion does not validate that claim either.
              • by Samrobb (12731)

                I stand by my statement - you're both wrong (Marxist Hacker more blatantly so, but still...) In your original post, you wrote:

                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.

                The last part of your initial argument there (which I've emphasized) is incorrect. I

    • Not really. US is a great country when it comes to business. I have been at a similar crossroads and this is what I found. Anyone can create a business in the US irrespective of their visa status. The catch is, you can not sponsor your own H1 and you can not earn second income from services while you are on H1 (including AdSense money). Here is what can be done, you can continue to get the money in your company and don't draw it ... let it sit in the company or further invest through your company. Remember
  • Hey tuk ar jerbs!!

    Und naw hey tuk ar adsens!!
    • by halsver (885120)
      Sokoban, I've determined the only way to stop the aliens from taking our "adsens" is to all have gay sex until all the aliens go away.

      Please show your support and sign up for the man-orgy below.

  • by whoever57 (658626) on Tuesday February 13, 2007 @02:10AM (#17993878) Journal
    You have asked a question that can only be answered by a lawyer. While reading the answers to your question, you should be aware that:

    [x] It is likely that many /. readers have been in this situation
    [ ] That question is not applicable to geeks.
    [ ] Wow. Who would ever wonder about that.

    The consequences of following /. advice could be:

    [ ] Incarceration in a Federal Supermax Prison
    [ ] Incarceration in a regular prison
    [ ] Incarceration in "country-club" for white-collar criminals.
    [ ] Large fines
    [ ] Small fines
    [X] Deportation.

    Further consequences could be:
    [ ] You may have to register your address for the rest of your life.
    [X] You may never be able to [legally] enter the United States again.
    [ ] You may be subject to the ridicule of your peers.
    [ ] You may become an international pariah.
    [ ] Find a new career. Toxic waste disposal sounds good.

    Best of luck in your future endeavors!

    • > [ ] Incarceration in "country-club" for white-collar criminals.

      Sheez, you forgot the "federal pound-in-the-ass prison"
    • Here's a golden opportunity for the ICE (Immigration and Customs Enforcement) people to earn their pay. Secondly, public policy has permitted certain sectors of the US economy to hyperinflate, namely housing, EDUCATION and medicine. If education is allowed to hyperinflate at current rates, one will see fewer and fewer native-borns going into those occupations that are being filled by H1B visaholders.
  • by Kaenneth (82978) on Tuesday February 13, 2007 @02:37AM (#17994034) Homepage Journal
    Could you perhaps register the business in your home country instead?
    • by bytesex (112972)
      Maybe his home country is Nigeria ? They never seem to have problems funneling money in and out of Nigeria, now do they ?
  • > I also run an increasingly popular website generating AdSense revenues

    4 digits figure? :-) I'm not implying anything -- still, taking into account some "invisible intonations" and the way the question was asked -- Google is expected to shutdown their AdSense program for websites specifically involved in illegal warez and porno activities. The last time I checked the statistics the lion portion of Internet visitors were there.

    P.S.: What if the person holds his future lawyer in stock, and would like to l
  • If you open an account in country X and the web site is hosted in country Y, where neither X nor Y = USA, is there any real chance of getting busted?
  • by bwcbwc (601780) on Tuesday February 13, 2007 @04:03PM (#18001970)
    As above: talk to a lawyer. I'm pretty sure there's a separate visa program for business owners, as opposed to employees. On the other hand, you probably have to give up the H1B to get it.
  • Wuh oh (Score:3, Interesting)

    by BluedemonX (198949) on Tuesday February 13, 2007 @07:55PM (#18005480)
    Did you have authorization from the INS to be running an enterprise for pay, e.g. this little side project of yours? Doesn't matter you were paid via AdSense, you took on side work, even entrepreneurial, you were not authorized to perform.

    Technically you're subject to immediate deportation for breaking the law.
  • I think what you want is a Delaware LLC. Foreign ownership doesn't matter as long as you have a "registered agent" in Delaware. I am not a lawyer, so this is the equivalent of legal advice you found on the underside of a Snapple bottle. But start your search there.
  • I'm surprised nobody yet commented on how this case shows how broken the H-1b "Business Model" is. Isn't that the common slashdotian rap on all the other big organizations (e.g. *AA) who try to place artificial barriers on activities that seem so "natural" (e.g. sharing a song with your friend, time-shifting, place shifting, making money on google ads from traffic on your blog etc.) just to protect an technologically obsolete'd business model (making loads of money off of marketing and distributing content

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