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Has anyone here started a company while on H1B worker visa? If yes, what legal issues did you face? Could you explain how you overcame those issues?

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3 Answers

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You can create and own whatever company you wish. You are not allowed to work for it while you're under H1B issued to you by a different company, even if it's done without compensation, just like you're not allowed to "volunteer" working for a third company in a position that would otherwise be performed for compensation.

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Very good answer. Read each word carefully. You can own a startup, but you can't work for it. Weird, but that's how it is. And when you think of startups, just actively doing stuff (coding for instance) is illegal. Even if you don't issue yourself a paycheck. – Alain Raynaud Jan 18 '10 at 21:31
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The answer is pretty close to correct: The H-1B holder generally can form a business entity so long as s/he does not work for it, but cannot form an "S" corporation because it cannot have a nonresident alien shareholder. Obtaining a federal Employer Identification Number (e.g., to open a bank account) can be tricky but not impossible - see danashultz.com/blog/2009/11/30/…. – Dana Shultz Jan 19 '10 at 4:28
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I did but I had to subsequently quit the company sponsoring my visa and my new company petitioned for a new one. During this time I left the US.

Note that you have to demonstrate the new company isn't just a front to keep you in the country. It helps to have co-founders, other employees, revenue, etc and helps if you don't have a controlling interest.

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My understanding is that in the US, an H1B worker can not work for his/her own company. I had an employee once that had done this, and he was on the verge of getting in trouble with the INS. What's worse, is that he couldn't just "quit" his company and get hired by someone else, because his Visa wouldn't transfer. So in order to hire him, I actually had to acquire his company so that the paperwork all worked out.

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