Can an H-1B Visa Holder Start a Company Without Being Paid for 1 to 2 Years?

The United States immigration system, with its strict H-1B visa program, often poses challenges for entrepreneurs seeking to start businesses. One such dilemma is whether an H-1B visa holder can start a company without being paid for an extended period. Understanding the nuances of H-1B status and its limitations is crucial for entrepreneurs seeking to balance their initial business setup with the visa requirements.

Understanding H-1B Status and Entrepreneurship

Starting a company while holding an H-1B visa can be a complex process, particularly when it comes to maintaining the visa's status. An H-1B visa is primarily designed for temporary employment in specialty occupations requiring a bachelor's degree or higher. Due to regulatory constraints, maintaining your H-1B status requires you to be working in the U.S., usually with your current employer, under certain work authorization.

Active vs. Passive Involvement

One key distinction to understand is the difference between active and passive involvement. Simply starting a company and not engaging in any work-related activities for a period of 1 to 2 years might seem like a feasible option, but it can lead to violations of your H-1B status. The U.S. Citizenship and Immigration Services (USCIS) may still consider you as working, therefore violating your visa terms.

A passive investment is the preferred approach. If you are actively involved in managing or operating the business, it may be considered unauthorized work, leading to potential legal issues. However, if you remain a passive investor, engaging in activities like receiving dividends or dividends without direct involvement in business operations, you may remain compliant with your visa requirements.

Strategies for Starting a Business With an H-1B Visa

Given the strictures of H-1B status, several strategies can be employed to start a business without violating your visa:

Create a Passive Company Structure

The safest route is to set up a company in which you are a passive investor. This means:

Putting your money into the company. Hiring a lawyer to form the legal structure of the company. Ensuring that others handle all operational tasks, such as hiring and managing employees. Receiving passive income without participating in any day-to-day business functions.

A common example is to hire a manager and employees who carry out all the work, leaving you as a passive holder of equity or receiving dividends.

Protection for Off-Time Activities

Additionally, engaging in activities outside of your regular work hours, such as:

Building software on your off-time before starting a company. Working on side projects that already have paying customers. Talking to potential business partners and investors before officially launching. Pitching to investors when the business has already established revenue and operations.

These activities can be permissible as long as they are not directly tied to the petition for employment authorization.

Dual H-1B Strategy

To mitigate the risk, one strategy is to:

Create a new company with a board of directors that includes others. Sponsor yourself for a concurrent H-1B, meaning you would have two H-1B visas simultaneously. The side gig can be for minimal hours, not necessarily full-time.

Though this approach has its downsides, such as additional filing fees and the need to disclose your intentions to your current employer, it can provide a level of certainty.

Alternatives

For those who do not qualify for the dual H-1B strategy, other options are available:

O-1 Visa for Extraordinary Ability

If you possess extraordinary ability, an O-1 visa provides more flexibility and freedom, allowing you to pursue your entrepreneurial aspirations without the same work limitations as the H-1B.

EB-2 National Interest Waiver (NIW)

For individuals with a compelling business idea that significantly benefits the national interest, the EB-2 NIW can be an effective option, potentially bypassing some of the H-1B restrictions.

E-2 Investor Visa

For those with entrepreneurial ventures and connections to the United States, the E-2 visa can be a strategic choice. It is particularly useful if you or your spouse have a U.S. basis of relationship or dual citizenship.

In conclusion, while the process of starting a company while holding an H-1B visa can be challenging, careful planning and adherence to legal guidelines can help entrepreneurs navigate the complexities of immigration status.