Can You Start a Corporation While on an H-1B Visa? Here’s What You Need to Know
If you're on an H-1B visa and considering starting a business in the U.S., you may be wondering: Can I legally start a corporation? The answer is yes—but with strict limitations on your involvement due to work authorization rules.
Let’s break down the key points you need to know before launching your business while on an H-1B visa.
1. You Can Own a Business, But You Cannot Work for It
The H-1B visa allows you to work only for the employer that sponsored your visa. This means:
✅ You can be a passive investor—own shares, receive dividends, and participate as a business owner.
🚫 You cannot work for the company, manage operations, or perform any day-to-day tasks unless you receive separate work authorization.
✔ What You Can Do:
Be a silent investor in a corporation.
Collect profits and dividends as a shareholder.
Appoint a U.S. citizen or green card holder to run the company.
✖ What You Cannot Do:
Perform daily business tasks (hiring, decision-making, managing staff).
Sign contracts as a company representative.
Work as an unpaid employee for your own business.
2. You Cannot Be an Active Officer or Employee
One of the most important restrictions under H-1B regulations is that you cannot be self-employed in most cases. If you:
🚨 Hold a title like CEO, Director, or Manager and make business decisions → USCIS may view this as unauthorized work.
🚨 Actively manage employees, approve finances, or oversee operations → This could lead to visa violations.
✔ Solution:
If you want to start a business but cannot actively work in it, you can:
✅ Hire U.S. citizens or green card holders to manage the business.
✅ Serve as a passive investor while others handle daily operations.
3. How to Work for Your Own Corporation: H-1B Sponsorship
If you want to be actively involved in your business, your corporation must sponsor you for an H-1B visa—just like any other employer.
To qualify for an H-1B through your own company, you must prove:
✅ A valid employer-employee relationship (you report to a board or another executive).
✅ The company has financial resources to pay your H-1B salary.
✅ Your job requires specialized skills that justify the H-1B status.
💡 Important Note: USCIS scrutinizes H-1B petitions from self-owned companies very carefully to ensure the employee is not controlling their own sponsorship.
✔ Alternative Visa Options:
If an H-1B is not possible, consider:
O-1 Visa (for individuals with extraordinary ability in business).
EB-5 Investor Green Card (requires an investment of at least $800,000 and creation of 10 U.S. jobs).
4. LLC vs. Corporation – Which One is Better?
The type of business structure you choose matters when it comes to work authorization.
C-Corp or S-Corp (Best for Passive Investors)
✅ Allows you to own shares without being actively involved.
✅ You can receive dividends without violating H-1B work rules.
🚨 You cannot work for the company without separate authorization.
LLC (Higher Risk for H-1B Holders)
🚨 LLC members (owners) typically participate in management, which could be considered unauthorized work.
🚨 If you actively run the LLC, it may conflict with H-1B regulations.
✔ Solution: If you choose an LLC, appoint a U.S. citizen or green card holder as the managing member.
5. Pathways to Legally Work for Your Business
If your ultimate goal is to actively run your company, you may need to change your visa status.
Here are some options:
✅ Find a U.S. employer to sponsor your H-1B transfer while you grow your business on the side.
✅ Apply for a Green Card through employer sponsorship, family, or investment (EB-5).
✅ Apply for an O-1 visa if you have significant achievements in your industry.
Conclusion: Yes, You Can Start a Corporation—But With Restrictions
While you can own a business as an H-1B holder, your involvement must remain passive unless you secure separate work authorization. If you want to actively manage your company, you may need to structure it for H-1B sponsorship or explore alternative visa options.
💡 Need help setting up your corporation the right way? We can guide you through structuring your business while ensuring compliance with immigration laws. Contact us today to discuss your options!
