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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?"
Get a lawyer. There is nothing here that can really help you other then moral support.
Now, if that makes sense to anyone, could you please explain it to me? I think I've confused myself.
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
Using your sig line to advertise for friends is lame.
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.
Call me old fashioned, but I like a dump to be as memorable as it is devastating - Bender
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.
How we know is more important than what we know.
You might just go to USA prison for upto 5 years.
From Wikipedia: http://en.wikipedia.org/wiki/Tax_evasion
Internal Revenue Code section 7201[13]:
Any person who willfully attempts in any manner to evade or defeat any tax imposed by this title or the payment thereof shall, in addition to other penalties provided by law, be guilty of a felony and, upon conviction thereof, shall be fined not more than $100,000 ($500,000 in the case of a corporation), or imprisoned not more than 5 years, or both, together with the costs of prosecution.
"Get a lawyer. There is nothing here that can really help you other then moral support."
Sorry. Not even that.
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.
"To those who are overly cautious, everything is impossible. "
Hey tuk ar jerbs!!
Und naw hey tuk ar adsens!!
09 F9 11 02 9D 74 E3 5B D8 41 56 C5 63 56 88 C0 is the magic number.
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:
/. readers have been in this situation
/. advice could be:
[x] It is likely that many
[ ] That question is not applicable to geeks.
[ ] Wow. Who would ever wonder about that.
The consequences of following
[ ] 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!
The real "Libtards" are the Libertarians!
Did you notice that the person who submitted this was named "GnaGnaGna"? I'm not convinced it's even a real question.
Disclaimer: I am not a lawyer, and this is something that you should be talking about with an immigration lawyer.
However, I believe it should be legal.
1. It is legal to do this even if you don't have a visa and are not living in the U.S. You can open a bank account (some banks allow foreigners to open an account). You can own a website (Most registrars have no problem with this). Sending the adsense revenue to the bank account is trivial.
2. The legality question arises because the H1B provisions specifically state that you need authorization from the INS (whatever it is called now) to take up additional part time or full time jobs. If I'm right, it defines job in a way not to include business revenue - this is the part for which you would need to talk to an immigration laywer.
3. I don't think you need a business license, although it is possible for a foreigner to obtain one - may vary from state to state.
4. Whatever be the case, if you are living in the US, you must pay the income tax.
In short, the question you should be asking your lawyer is, why is it illegal to this with a H1B visa, especially since it is legal to do this without any visa?
Could you perhaps register the business in your home country instead?
IANAL, but in my experience living through this, an H1B can be an executive of of a company, as well as a passive or active investor (board member) as long as you file for an H1 visa that covers that job description for that company. It needn't be a fulltime H visa either, although you may have trouble convincing the USCIS that such a key role can be done part-time. I personally held a fulltime visa for an executive position with one company and a concurrent visa of a few days a month to be a boardmember of a second company which I also owned a large chunk of. Both visas were approved by the USCIS with no problems.
The requirements in 8 CFR 214.2 (h)(1) are that (a) it is a bonafide company with real money to employ you at a prevailing wage and (b) the job is a specialty technical occupation. Some applications for president/CEO roles are tougher because the technical nature of such needs to be documented, but it is certainly possible. Obviously US citizen should incorporate the company and file for your visa, but they can be a minority owner.
Note that this does not apply if you wish to file for a greencard, since there are very strict USCIS guidelines based on case law that state you cannot file for a greencard via a corporation in which you hold a large stock position or a founding role if you are unlikely to be replaced by a US citizen. (Google "Matter of Modular Container Systems" for more info on that whole ball of wax).
> I also run an increasingly popular website generating AdSense revenues
:-) 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.
4 digits figure?
P.S.: What if the person holds his future lawyer in stock, and would like to learn from personal experience of others? After all, it cannot be denied that the portion of slashdotters used to live outside USA or with H1B working visa is not that insignificant. Personally, I know at least dozen H1B'ers who keep slashdot.org as home page in their browser.
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?
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 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 9,000 deaths a year not really a problem worth 'popping a vein' over? Maybe when it happens to your family the focus will change.
My God, it's Full of Source!
OUTSIDE_IP=$(dig +short my.ip @outsideip.net)
It is extremely difficult to become a US Citizen. Trying to attain citizenship while on an H1-B visa is a long and slow process, often up to 7 or 8 years. We should be letting people pursue citizenship more quickly, but we don't, at least if they are on H1-B status.
Statistically speaking, there's a 99.998% chance that my IQ is higher than yours. Get over it.
It is extremely difficult to become a US Citizen. Trying to attain citizenship while on an H1-B visa is a long and slow process, often up to 7 or 8 years. We should be letting people pursue citizenship more quickly, but we don't, at least if they are on H1-B status.
It is relatively easy to become a U.S. citizen. It's getting the green card first that's hard. Unless you have a U.S. parent, or were born here, all paths to naturalization run though the green card, as that's how you satisfy the 5 year minimum residency requirement (3 for those on marriage GC's). Time spent in the USA on non-immigrant visas like H1-B's is not counted toward that total.
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.
We are the 198 proof..
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, if you have a company it has to pay taxes (expect at least $800/yr, if you are making more than this on AdSense alone, I need to know what site you have :)).
One of the best places to incorporate business for people on H1 I felt is Nevada State. You can keep the owner anonymous you are protected by state laws. Second, they have bearer share/stocks meaning whoever holds the share certificate is the owner you do not require papers to show transfers etc..... You don't even need to be present in NV. This maybe of some help: http://www.companiesinc.com/ for starters.
As a caution, take my information with a grain of salt and do consult a professional.
HTH.
PS: No offence, but IMHO US is a great country with a mediocre and somewhat parasitic immigration policy.
``Sheez, you forgot the "federal pound-in-the-ass prison"''
Wasn't that already covered by all the people with posts starting out with "I ANAL"?
-- AC
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.
--- Jump!! Fire!! Bullet time!! - Lego version of the Matrix
You don't need to report the income from outside the US for the first two years
Income from outside the U.S. is neither taxable nor reportable as long as you can file the form 8843 AND 1040NR or 1040NR-EZ (usually at least for the first 2 years you are here, but can be as long as 6, talk to a lawer).
You can use an E1 visa to setup a business. Leads to green card as well. Need to have 250k+ though.
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.
Small potatoes make the steak look bigger.
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 in un-necessary physical forms, "protecting" American jobs by artificially restricting economic activity by un-necessary and totally irrelevant geographical boundaries). The biggest irony here is that the OP could be carrying out *exactly* the identical economic activity sitting anywhere else in the world and it's perfectly legal... heck even makes an American company some money (what google is paying this guy is after all just a cut from what google *itself* is making from the advertisers, right?).
So where's the outcry for removing the bureaucratic restrictions that limit highly educated law abiding immigrant's earning potentials on all the different narrowly defined immigration categories (student visas, H-1B, research visas etc.). If we're accepting them in our fold, briging them in because we think it's in our benefit (debate it all you will... but that's what the legislation, the legal voice of this country, officially says), why treat them as sub-human by restricting them from engaging in activities that are otherwise considered perfectly legal and even desirable (creating a business, engaging in gainful employment, creating something of economic value in their free time) in our own citizens ?
1 Year! I have been in this country for 8 years as a student and now on H1b visa. Everytime I think of a business, H1b stops me!
Getting a greencard is a nightmare and the current wait -- 5 years.
Its easier to start a business once you get a Greencard (if you can get one before your idea dies) else you'll end up spending more money on the lawyers.
Lawyers by the way love this!!! More delays more $$$