Can H1B holder (or H4) start LLC?Everything You Need to Know
The United States of America is a place with great opportunities for businesses, and starting a business can be incredibly rewarding.
It’s a way to take your success into your own hands and work towards your own goals and ambitions.
Starting a business can be challenging, frustrating, confusing, and scary but it can also pay off in huge ways along with smaller day-to-day things like having the freedom to set your own schedule, be your own boss, and make important decisions about your future.
If you’re not from America, there are different types of visas that can get you into the country and they have different rules in terms of working or starting a business.
Here’s what you need to know about starting an LLC if you’re in the United States under an H1B or H4.
Can an H1B (or H4) Holder Start an LLC in 2022?
An H1B visa holder can be involved in an LLC in a specific set of circumstances, but they aren’t allowed to work for the LLC in any fashion.
Somebody who holds an H1B visa in the United States is allowed to be a member (owner) of an LLC if it’s in the form of a passive investment, however they are disallowed from actively working on the LLC, which would generally exclude them from being able to start an LLC as well.
The H1B holder must be working for the company that sponsored them for the visa, so working for an LLC in addition to that would pose a conflict.
USCIS (which stands for United States Citizenship and Immigration Services) takes a very close and thorough look at any involvement in an LLC or other type of business, especially if somebody is trying to be sponsored by a business that they end up having ties as an owner, but also if involvement in an LLC suggests that the individual is going unauthorized forms of work.
Before joining or starting an LLC as an H1B visa holder or somebody who is hoping to enter America as a temporary worker, it’s important to consult with an immigration lawyer who can evaluate the situation and explain the pros, the cons, and any potential risks or downsides in terms of heightened scrutiny if there’s a chance it could hurt one’s visa application status at any point now or in the future.
The aforementioned information covers the H1B visa holder, but what about their dependant or spouse?
In the case of an H4 visa holder, they’ll have a much easier time starting a business or an LLC because their visa status isn’t tied to their employment status the same way that it is for an H1B holder.
The H1B visa is directly tied to having an employment opportunity that meets a specific criteria, and the whole process is heavily scrutinized but that doesn’t mean that they want to limit economic opportunities for H4 visa holders.
Still, in the case of an H4 visa holder who has work authorization in the USA it’s still a good idea to consult with an attorney who can ensure that everything is above board, within what’s allowed, not breaking any regulations, and that working for or starting an LLC won’t cause any issues to their status, or the status of the person they’re dependent on.
What is an H1B Visa?
The H-1B visa is for individuals who have been granted temporary employment status to come to America and work certain jobs in specific fields that are deemed specialty occupations.
In order to be eligible for an H1B visa, an individual must have a job offer from an employer in the United States for a job that has the requirement of speciality knowledge or abilities.
The visa applicant also needs to hold a bachelor’s degree in that field. Finally, the employer needs to show that they’re having trouble finding people in America to fill the role.
What is an H4 Visa?
The H4 visa is for dependents (family members) of somebody that holds an H1B visa, along with a handful of others such as H1B1, H2A, H2B, and H3.
They must be a spouse of the H1B holder, or an unmarried child who is younger than 21 years old in order to qualify for this status.
Starting a business at a young age or starting a business while you have a spouse who is working can offer many benefits.
Starting in business at a young age gives someone a lot of time to learn as they go.
Starting a business as a spouse gives a bit of leeway, since the other partner has income coming into the household as the business grows.
What About An H4 Employing Their Spouse on an H1B?
When exploring the different options that exist for visa holders in the United States, some people will consider the option of having the H4 visa holder start an LLC and using that LLC to sponsor their H1B spouse.
This roundabout strategy is not ideal, and can raise all sorts of problems with USCIS since there are issues with trying to sponsor somebody for an H1B visa when they have close familial ties to the company that is sponsoring them.
Again, if one is considering anything like this, it would be diligent to present the specific case and plan to a lawyer who is familiar with immigration laws.
Generally speaking, when there’s something that feels like a clever loophole or a way to get around something in this fashion, it’s going to cause problems for the visa holders and applicants.
Final Thoughts on H1B and H4 Visa Holders Starting an LLC
To summarize everything that we’ve covered in this article, an H1B visa holder needs to be sponsored by an employer and a number of requirements need to be met in order for them to be eligible for this visa status.
An H1B visa holder can, in some cases, maintain an ownership stake in an LLC but it needs to be completely passive – they can’t be actively involved in working for or managing the business while working under an H1B visa in the United States.
Their H4 holder, on the other hand, has more leeway in terms of work so they could potentially have the ability to start an LLC while they’re staying in America, as long as it doesn’t interfere with any of the visa requirements, or put the H1B holder in a position that could raise issues.
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US Department of Labor "H-1B Program" Page 1. October 14, 2022
US Citizenship & Immigration Services "Employment Authorization for Certain H-4 Dependent Spouses" Page 1. October 14, 2022