Entrepreneurship · Legal

Can I start new business on h4 EAD?

Mitesh Sura Sr. Salesforce Developer | Cloud Technologist

October 13th, 2015

As per new law in US, people on H4 (dependent visa) can now have EAD (stage prior to Green Card). This opens lot of opportunities to H4 visa holder. My questions is can I now open a new software business in US based on EAD? 

To make it little more complex, the validity period on EAD is based on principle H1 visa holder. How will all this play out if I open a company on EAD. 

Thank you
Mitesh
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Kris Foster Engineering Manager at Cisco

October 13th, 2015

You should set up a consultation with an immigration lawyer. It's legal to set up a corporation without a visa, it's not legal to work for that corporation without a proper visa (EAD is fine). When the H1 validity ends the H4 EAD will no longer be valid, so you'd need to stop operating. You could try mitigating some of this risk by raising enough capital to sponsor yourself for an H1 (along with meeting the other requirements).

Benjamin Olding Co-founder, Board Member at Jana

October 13th, 2015

This is a fascinating question beyond the EAD aspect of the question.

@Kris - are you sure anyone can set up a corporation?  Can you have a pass-through corporation owned by a foreign national who lives outside the country?  If so, does it matter where they are geographically, so long as they have the right to be there?

I believe, for example, it is legal for me to do work for a chapter S corporation I own without being an employee of the company.  Am I wrong, or do I only have this right as a US citizen?  I don't know of any forms I am required to complete as a non-employee.  I-9s, I believe, are only for people receiving W-2s (or 1099s potentially).

This seems like a huge loophole...  The company earnings would pass directly to me, but on a K-1, not a W-2 or 1099.  I must not understand something here.  Perhaps pass-through corporations are limited to US ownership?

Obviously this would require the company to be profitable, not just cash flow positive from investment, so it might not generally help in the context of startups, but this seems like to big a work-around for labor laws?

Mitesh Sura Sr. Salesforce Developer | Cloud Technologist

October 13th, 2015

To clarify
- I meant H4 EAD holder to open a company. H1/principle holder has no role to play
- H4 and H1 holder are in the US
- Preferably LLC and not S or C corp

Kris Foster Engineering Manager at Cisco

October 13th, 2015

Benjamin- good questions, a few answers:

http://schulenburglaw.com/can-a-foreign-national-own-a-company-formed-in-the-united-states/

Obviously you'd want a lawyer to get into the details.

June Kimani Founder at USAFI

October 13th, 2015

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