Can a Resident Alien, Work Visa holder form a Business Entity in US?

Most of the resident or non-resident aliens who are aspiring to start a business in US have questions on their eligibility of doing so. The most common question comes to their mind is with their current visa status, can they incorporate a business entity like a Corporation or LLC? Here are the answers….

 

A resident or non resident alien can form a business entity in US however it depends on the entity types, and subject to fulfillment of immigration requirements.

 

For instance H1 and H-1B visa holders who work for a company can form a business entity in US however they cannot receive salary from the same entity. They cannot form an employee employer relationship with any other entity until they get a petition from the current employer to work with other companies and get their H1 or H-1B issued from the new entity. However, the new entity should be eligible to do so.

 

F1 Visa holders can also create a business entity, but need to form in the name of the person who has a valid visa. They can make investments in the business and can share profits.

 

An individual with a valid EAD can also start a business and work. EAD allows one to work as an employee and collect salary from the company.

 

The important point to note here is that a resident or non-resident alien can form LLC, C Corporation but not S Corporation. A shareholder of S Corporation must be either US citizen or a Green Card holder. The best way to determine the type of entity and the incorporation process is to consult www.mybizfiler.com or an attorney.

 

As a conclusion it can be said that best way one can benefit from a business with out having GC or EAD is to become an owner, employer, investor and derive profits even though by not having physical presence in US!.

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• VISA- H1
  • Description – Non- Immigrant visa established by USCIS, to employ workers with specialized training
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No
  • Explanation – You can very well form a business but you cannot work for the company but can share profits

 

• VISA- H-1B
  • Description – Non- Immigrant visa established by USCIS, to employ workers with specialized training
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No
  • Explanation- You can very well form a business but you can also work for the different employers only when all employers must have filed an H-1B petition for you.

 

• VISA- H4
  • Description- The H-4 Dependent Visa allows the dependent spouse and children of any principal H-class visa holder’s entry to the United States and free travel in and out of the country.
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No

 

• VISA- F1
  • Description- The F-1 visa is a non-immigrant, full-time, student visa that allows foreigners to pursue education in the United States
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No
  • Explanation- You can start a business when you are on f1 visa. But, you have to start on other person’s name who is having a valid visa (who can work legally and earn income).You can put the investment (partnership) and you can take the partnership in the property. For example start a business with your current owner and put some investment in the business and take the percentage in the property.

 

• VISA- F1-OPT
  • Description- Persons seeking to pursue a full course of study at a school in the United States may be eligible for a visa for the course of their study plus, in some cases, a period for practical training in their field of study.
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No
  • Explanation- With OPT, you can work in your own company, provided that the company is active in your field of study. The OPT does NOT allow you to work in a company, even your own, if the work is not in your field of study. It is called Practical Training for a reason.

 

• VISA- B1
  • Description- Available to all visitors coming to U.S for business or pleasure. B-1 business visitor visas are for a short duration and must not involve local employment
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No
  • Explanation- If you are simply going to invest and start up a business in the US and hire people to run it and you will not be working it yourself (more of an investment rather than employment), you can do so at anytime and come as a visitor to check things out, meetings etc. If you are actually going to be involved in the business in the US you should be looking at the E-2 visa.

 

• VISA- L1
  • Description- Temporary visa that allows companies in USA & other countries to transfer certain classes of employees from its foreign operations for up to seven years. The employee must have worked for a parent, affiliate, subsidiary, or branch office of the U.S. Company outside of the USA for at least one year out of the last three years.
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No
  • Explanation- L1 Visa holder can incorporate business. This type of visa allows an executive or manager to come to the U.S. to establish a new business

 

• VISA- Employment Authorization Document (EAD)
  • Description- an Employment Authorization Document (EAD), EAD card, known popularly as Work Permit, is a document issued by United States Citizenship and Immigration Services (USCIS) that provides its holder a legal right to work in the United States of America. It should not be confused with the green card. EAD has fewer employment and immigration-related privileges than the green card.
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- No                
  • Explanation- You can start and work for your business with a valid EAD. The only difference is that you can work for the company and collect salary. What EAD does allow you is to work as an employee of the company. So, technically, you can start a business even on H1 or B1/B2. The only way one can benefit from a business one owns without a GC or EAD is by becoming an investor. Investment income from a business you own is legal all the time, even if you live outside the US.

 

• Green Card Holder
  • Description- A Green Card is a Permanent Visa to USA. Green Card gives you the status of permanent resident and legal rights to work in United States
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- Yes
  • Explanation- You can very well form a business

 

• US Citizen
  • Description- US citizenship can be acquired by birth or by the process of naturalization. The process of an immigrant becoming a US citizen is termed as ‘naturalization’. If you are not born in the US, you have to naturalize to become a US citizen.
  • Entity LLC- Yes
  • Entity C CORP- Yes
  • Entity S CORP- Yes
  • Explanation- You can very well form a business

 ICS, Inc (www.mybizfiler.com) offers a wide range of services typically offered by a Big 5 Accounting firm and a CPA firm in the U.S. ICS offers Incorporation, Book Keeping, Payroll Services, HR & Business Consulting etc.  Contact ICS today at    203 437 4083   , e-mail – sales@mybizfiler.com, or by accessing 24/7 chat page onwww.mybizfiler.com.

The contents of this post are personal statements or opinions expressed by Nirmal Jain Senior Manager , ICS Inc. They must not be construed as financial, investment or taxation advice.