H-1B Visas and Entrepreneurship: Can H-1B and H-4 Visa Holders Start a Business?

By: Brittany Simmons and Hafiz Uddin

H-1B visas are employer-specific, which means that an H-1B visa holder can only engage in employment activities with their petitioning employer. Because there must be an employer/employee relationship between the H-1B visa holder and the petitioning employer, entrepreneurship can be complicated for H-1B workers. However, options may still exist for H-1B workers.

Entrepreneurship may be simpler for H-4 visa holders that are eligible for work authorization through their spouse because their status is not tied to a specific employer. Be sure to consult with an immigration attorney for case-specific questions.

Can an h-1b holder own a business? if so, what type of entity can they establish? 

Individuals on H-1B status can own a business under certain circumstances. However, an H-1B visa holder cannot work for themselves or for a company other than their petitioning employer. If they work for an entity other than the H-1B petitioner, even if the work is unpaid, they might lose their underlying H-1B status.

An H-1B holder can own a limited liability company (LLC) only if they are a passive investor who does not work for the company in any capacity. Their H-1B visa cannot be sponsored by the LLC, and their activities with the LLC must not constitute unauthorized employment. They must continue to work for the company that sponsored their H-1B visa.

United States Citizenship and Immigration Services (USCIS) heavily scrutinizes cases where an H-1B visa is sponsored by a company in which the beneficiary has an ownership interest. While S corporations, C corporations, or partnerships can petition for an owner’s H-1B visa, this practice is not recommended.

H-1B visa holders should evaluate any entrepreneurial pursuits on a case-by-case basis with their immigration attorney to avoid violating their H-1B status.

Can an individual with a h-4 employment authorization document (EAD) own a company and employ their spouse on a h-1 visa?

H-4 visas are entirely dependent on the status of their spouse’s H-1B visa, and their H-4 EAD is not tied to a specific employer. Therefore, it may be easier for an H-4 visa holder than an H-1B visa holder to own and operate a business, provided that such operations do not constitute unauthorized employment.

However, an H-4 holder should not use their company to sponsor their spouse’s H-1B visa. It is problematic for an individual to be sponsored on an H-1B visa by a company in which they or an immediate family member has an ownership interest. Further, such a move could potentially risk the H-4 visa holder’s status and employment authorization as these are intrinsically linked to the H-1B visa holder’s status.

conclusion

It can be complicated to pursue entrepreneurship while on an H-1B or H-4 visa. Individuals on these visas should meet with their immigration attorney to evaluate their options to avoid violating their visa status.

For other visa options and case-specific questions, contact a trusted Chugh, LLP immigration attorney.