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Starting a company on H1B

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

14 Replies

Lee Ann Guertin
0
0
Lee Ann Guertin Entrepreneur
Editorial Research Manager, Online Analytics
Is there a reason that starting it/owning it in your home country is not an option for you? Sent from my iPhone
Oleg Baranovsky
3
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Oleg Baranovsky Entrepreneur
CTO at Elluma Discovery, Inc.
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...
Hartmut Jahn
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0
Hartmut Jahn Entrepreneur
Entrepreneur
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.
Joanan Hernandez
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Joanan Hernandez Entrepreneur
CEO & Founder at Mollejuo
Well ...

My suggestion:
  1. Get funded, or at least has a serious investors interest
  2. After #1 being successful, come to Canada :-)
Good luck! :-)
Sri Ram K Vemulpali
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Sri Ram K Vemulpali Entrepreneur
Member of Technical Staff at Riverbed Technology
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.

Sri.
Samik Raychaudhuri
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0
Samik Raychaudhuri Entrepreneur
Machine Learning on Big Data, [24]7 Inc.
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 Murthy.com, request to take a look.
Rob Gropper
0
0
Rob Gropper Entrepreneur
Director at PetHero, SPC - Member at Eastside Incubator - Principal at Tuxedo Technologies Group
Oleg hit on most of the important issues. i am not a lawyer and cannot give legal advise, but you could look into part-time work status and see where that leads. Yes, our current immigration laws are screwed up and there is legislation in process now to address this very issue of visa holders founding companies. it would be worth your time to find a law firm very experienced in immigration law to see where this new legislation is at and its chances of passing. Also, as i'm sure you've discovered, getting your green card is a long process. Another challenge from the startup company perspective is the requirement that the H1B holder must be paid "prevailing wage". Therefore even if you found a startup you believed in and wanted to work for them for only equity (or work for your own startup) and no pay the immigration laws would not allow it. Re part-time status you could look at the possibility of a US citizen starting a company and sponsoring your visa for part-time work. the wages you and your spouse (if you are married and both here on visas) paid in total would need to be capable of providing you with a "living wage" and you can work part-time for more than one company (as i recall). Hypothetically, let's say your spouse is also here on an H1B and you find "part-time" work with a startup. the wages your spouse makes could be sufficient to meet the 'living wage" requirement and you could potentially work part time for the startup for part-time wages. what you do with the balance of your time is your business. There are no restrictions that i know of regarding stock ownership, it is the wages and employer sponsorship that are issue. As Hartmut said, don't violate any immigration laws. We work with a very good immigration law firm based in Chicago. If you need a referral please message me directly.
Lee Ann Guertin
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0
Lee Ann Guertin Entrepreneur
Editorial Research Manager, Online Analytics
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
Joel Brodie
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0
Joel Brodie Entrepreneur • Advisor
Business Development Executive and Entrepreneur
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).
David Crooke
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0
David Crooke Entrepreneur
Serial entrepreneur and CTO
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
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