Visas · H1B Visa

Starting a company on H1B

Bhavyan Mehta Development Manager at Commvault Systems

November 18th, 2013

Hey Guys,
Me and my co-founders are here on H1B visa and want to start a software product company. We have visited different lawyers and CPA and have got different opinion about starting a company here in US. None of the options suggested by them look that viable. Can someone please share their experience or help us connect to the right people who can guide us on this.

Thanks for all the help

Oleg Baranovsky CTO at Elluma Discovery, Inc.

November 19th, 2013

I have to disappoint, but the short answer is you cannot.

The only way you can start the business on H1b visa is to invest money in someone else's company. You will not be able to provide any services to that business (even unpaid ones) as it would be a direct violation of your H1b status. 

Our immigration legislation is ultimately retarded in that way. The entire premise of the H1b visa is that you are a guest worker, typically here for couple years and therefore you are not allowed to be involved in anything else, but working on your prospective employer. It allows however the for the concept of "dual purpose", meaning that you are technically allowed to also seek an employer-based permanent residence (aka "green card") status. This however requires you to find some other employer (or the same one that petitioned for your H1b) to petition for your green card and hire you on "permanent" basis. You are also explicitly prohibited of starting you own company and filing the green card petition on your behalf. You cannot even own any significant share in that employer. After your green card petition is granted you still have to work for the employer who files it for you for some substantial amount of time to indicate you that you indeed intended for a "permanent" employment there (usually a year is considered safe).

So, my recommendation would be to get your green card first, stay at your job for at least a year and than start the software business of your own. 

This is obviously a total nonsense from the policy perspective and there are some pieces of legislation in the Congress at the moment attempting to address this issue by creating s special class of "Founders" visas, but given the current climate in said congress I wouldn't hold my breath for it to pass any time soon unfortunately :(

So the only good option you would have at this point is to try to get your green card as quickly as possible...

Shobhit Verma Ed Tech Test Prep

November 19th, 2013

All the answers are correct. In short, you cannot.
If you are from India/China then waiting for GC is not a practical solution unless you have an obscene amount of money available for investment visa.
But there have been several very lucky entrepreneurs who have done this in the past and have had very decent exits.
They basically 
1) kept their jobs / school / marriage ... whatever was required to keep their legal status in US legal
2) open a Delaware LLC either by themselves or in partnership with some friends who had GC
3) Did NOT .. I repeat did NOT work for that company. They were all web based businesses where it was possible to outsource everything to India. Maybe to a friend/family who doesn't charge you much until you have revenues ? [ It is very important to be able to defend this position legally. Nothing contradictory should be there on paper / financial transactions / emails / LinkedIn etc.]
4) If you do not wok for your own Delaware LLC company, everything is OK legally. It is considered as an investment and you do not even have to be an accredited investor.
5) The company keeps running itself magically until it becomes that big that either
a)  it is acquired/sold
b) it has so much profit that you can actually hire yourself. [This has become trickier now, you cannot do it if you have controlling interest in the company]. 
In one instance, the founder moved to India after 5 b) . When they have enough money for investment visa, they will come back. But the good thing is that the company keeps making money and they can actually work for it from India.
In other instance, people were on some dependent visa so they didn't really bother much. They paid themselves dividends from company's profits without working for the company.

 I just shared my understanding from a third person's perspective. Actual implementation details may vary from individual to individual. Please do not break the immigration laws. Some of the above may seem "gray areas" .. do not take the risk that you cannot afford.

Vijay Rumao CEO

January 31st, 2020

Look at the video above. There is no such rule written. You can start a business and not run the payroll for yourself. Let all the money go in your company bank account. You can have debit card and check book for that account and use that money as you like. You need to pay taxes on your income.

Joel Brodie Business Development Executive and Entrepreneur

November 19th, 2013

I was going to suggest as others did above to get a co-founder who is a US citizen and have him/her sponsor you and the team.  As mentioned, the company will have to pay your wages during this time it could take awhile - up to 3 years.  I've done this before so can concur with a lot of the comments above.   Hopefully the laws change, but to pull it off, you'll definitely need to raise money not just to build out the business, but to support the H1 process. It'll probably cost $20K - 40K per each person.  Good news is most of the time/ cost is upfront (though it's a lot of work).  

Lee Guertin Editorial Research Manager, Online Analytics

November 19th, 2013

I realize no one wants to talk about it, but what about starting it/owning it in your home country and establishing need to conduct business here in US? Many overseas tech companies are doing that now to streamline setup, etc. and respect immigration laws. Would your startup be scoping to employ US resources or citizens? Otherwise, I concur that it may be a better idea to have a US Citizen establish primary ownership and sponsorship. Besides immigration status there are liability, security, and fiscal responsibility issues present. Sent from my iPhone

Joanan Hernandez CEO & Founder at Mollejuo

November 19th, 2013

Well ...

My suggestion:
  1. Get funded, or at least has a serious investors interest
  2. After #1 being successful, come to Canada :-)
Good luck! :-)

David Crooke Serial entrepreneur and CTO

November 19th, 2013

I did this in 1999. Rules may have changed. - At least for a Delaware C-Corp, there were no restrictions on who can be a corporate officer, you didn't even have to live in the USA - A company has to be up and running for 12 months to be allowed to apply for H1-B's - For the first 12 months, I had an Indian body shop in Maryland hire me as W2 and I hired myself from them. Totally legal even though a loophole. I chose MD because they use the VT processing center which has very fast turnaround - H1-B transfer without rush processing took a week, we did it ourselves without a lawyer - To apply for a work-based green card, certain paperwork (IIRC the LCert) has to be signed on behalf of the company by an employee or officer who is a US Citizen Cheers Dave

Samik Raychaudhuri

November 19th, 2013

Oleg is correct on this one - at one point I researched this as well and came to same conclusion. I have heard a few cases where folks have had the company founded by the US cofounder, and then come in through H1 transfer to this company, but check the legality on that one before proceeding.

You can technically found company while being on EAD, you don't have to wait till the actual possession of GC, but that is the earliest you can do it.

There are quite a few discussions around the same topic on, request to take a look.


November 19th, 2013

In case it takes too long to wait for a green-card:
My suggestion for you is to find a good immigration lawyer and file for an E-2 visa (investor-visa). You will be asked to prepare a business plan convincing people that you will hire more staff members in the near future. You will also be asked to make a reasonable but substantial investment depending to the nature of your business. But whatever you do, don't violate immigration laws.

Ram Aspiring Enterpreneur

November 19th, 2013

Hi Bhavyan,

There is a possibility. If you can get investment from VC and define employee and employer relation for your company. Being on H1B you can be part of startup if you can show that you are not just the owner of the company , but there is higher management to control your decisions. Again this is possible only if you can get VC funding. Talk to a lawyer who is good at startup related issues. 

All the best.