Foreign Cofounder · Immigration

Advice on bringing on non-US-citizen co-founders

Jeff Axup Sr. Manager, Palo Alto UX Design Research Group at Bosch

December 13th, 2013

I am considering adding a co-founder (equity-only) who is from India and has just finished up a degree at a US university.
He is on a F-1 visa and is doing an OPT with us currently.

I have heard some rumors from other parties that if you not a US-citizen, that you can't own stock (or invest your own money) in a US company that you are also working for. Apparently this makes it difficult for immigrants to start their own companies. We are also unclear on which visa he would need to be on if he stayed with our company as a co-founder for several more years.

Has anyone gone through anything similar to this, and any pointers to resources on this topic?
Thanks.

David Crooke Serial entrepreneur and CTO

December 13th, 2013

Been there and done that ... also there was a thread on this a few weeks back, might be worth checking the archives. In short: 1. Anyone or any corporate entity can own stock in a US company, and indeed be a director of one. Why would it be otherwise? 2. The F1 is tricky, there are allowances for switching to H1B but there are restrictions. 3. A company must be trading for 12 months before it can sponsor employees for H1B I was on H1B at the time an my solution was to sign on with a "rent a desi" contract shop on a W2 basis, then hire myself from them. Odd but legal :) Cheers Dave

Paul Ruderman

December 13th, 2013

Wait, David... one question. My business has only been incorporated for 4 months. Does that mean I cannot sponsor someone for H1B status until after we've been incorporated for 12 months??

Jeff Axup Sr. Manager, Palo Alto UX Design Research Group at Bosch

December 13th, 2013

It is a Masters in Electrical Engineering. He is not from Canada or Mexico. Jeff Jeff Axup, Ph.D. - axup@userdesign.com - LinkedIn- About Me ------------------------------------------------------------------------------------- What's that new smart-jewelry safety product called Artemis ?

Paul Ruderman

December 13th, 2013

It is my understanding that you can absolutely grant equity/options to non US citizens. Can someone definitively state whether this is true or untrue?

Shobhit Verma

December 13th, 2013

I think the rumor Jeff may be talking about is related to how immigration and visa works. You can absolutely grant equity to non-citizens, however when they are going to apply for green card/ H1 visa, they will need to show that they have no material influence over the company's hiring decisions and that they are employed purely because they were the most reasonable choice. If they have 50% equity, proving no material influence is impossible, but with lower equity and specially if you have raised good funding by the time of visa application, you should be fine. Not a legal opinion of course. 

Neil Ayton CEO/Founder, Mountary Inc #500strong

December 13th, 2013

I am currently working on a H1-B visa which was sponsored by a company that was not incorporated for 12 months when I was sponsored.

David Benoit CTO at GoInterpay

December 13th, 2013

Is the degree a bachelor or masters level degree?  If it is a masters degree, there is a different (additional) cap for H1B visas.  Also, if the person is from Canada or Mexico, it is possible that he/she may qualify for TN status.  If the person is going to invest, it may also be possible to apply for E2, EB5, etc.  If neither of those work, and the person works for the company outside the US for at least a year, he/she may also qualify for an L1.

I would talk to an immigration specialist.

Rob G

December 16th, 2013

there was another thread with extensive feedback on this a few weeks ago...

Joe Shepherd Figure it out, Get it done, Exceed expectations

December 13th, 2013

I'm in the same boat. One of my cofounders is from India. His sponsorship is from his day job and we are just starting up. I'd love to see any additional experience here.