Foreigner Starting A Business In USA(Updated)
Author: JC, Last updated on 2019-06-18
This article was originally published on my Chinese site, JiansNet.com. Since it was in English, so I moved it here instead.
This page is dedicated to folks who are foreigners but still ambitious enough to startup a business in USA. These questions and answers are just for reference only and should not be treated as legal advice.
1. What permissions do I need from USCIS to start my own business?
The simple answer is: None. As you know, USCIS is very concerned about immigrants working without proper authorization. However, USCIS does not regulate how immigrants invest or purchase things in the United States. Immigrants are free to buy cars, buy houses, and invest in the stock market; starting a business is no different. Starting your own business is an investment, not employment. Therefore, you will not require USCIS permission to start a business.
2. Can I work for my business if I don't have a work authorization?
This is complicated. Since entrepreneurship and employment are closely related, immigrants who start their own businesses need to be very careful to limit their activities to the management of and investment in the business, and not "work for" the business like a typical employee who would need USCIS permission. Thus, though you can start, register and own your own business, you cannot work for the company and earn a salary without a work authorization and an I-9 for your position. However, if you simply manage your business like an investment, there is no need for any work authorization.
3. Can I start a business if I am working on an H1-B or have an EAD with another employer?
Remember that H1-B and EAD work authorizations are employer-specific. New full-time jobs require new authorizations. However, this does not prevent you from starting and managing your own company. As you build your side business, just be careful not to ignore your work hour obligations to your current employer.
4. Can I start a company if I am a student, or the spouse of a student?
F-1 students cannot work outside the Curricular Practical Training and Optional Practical Training systems. Spouses of F-1 students also need a separate work authorization to work. However, nothing prevents F-1 students or their spouses from starting and managing their own companies and earning money through profit distributions. Again, you just need to be careful not to draw a salary from your work.
5. If I invest in something, can I occasionally help my employees with their work?
This is a tricky question. Investing in a small business, like a McDonald's franchise, and earning profits from it does not require a work authorization. However, if you go to the shop location and help out your employees from time to time, as most small business owners do, then a USCIS officer might cry foul. However, once again, so long as you are not paid for your work, you are not in violation of your status.
This situation shows how registering a company for your business, like a C-corporation or an LLC, rather than operating as a sole proprietor, is a good idea. Registering a company will provide documentation showing that you are the owner and manager of the company, and not an employee. Such documentation can refute accusations that you are 'working' for your company. Moreover, business structures can provide important limited liability and other advantages to entrepreneurs.
6. Can I register a company if I don’t have a green card?
There is no restriction on who can register a company in the United States. It doesn't matter where you are from, or where you claim citizenship, or whether or not you have a green card. However, you will need a Registered Agent in the jurisdiction where you register the business. This is someone with a regular address in the jurisdiction who can accept process on behalf of your company. If you don’t live in the jurisdiction and can’t serve as your own registered agent, then there are many companies you can hire who will serve as a registered agent for you.
7. Can I register a company in one state even though my driver’s license is from another?
Again, there is no restriction on who can register a company in any particular location. For example, a resident of California is free to register a company in New York. However, you must be careful about where your company is doing business. You will likely need to register your business as a 'foreign' business in any jurisdiction outside your local jurisdiction where business occurs. Thus, it is always best to register your company where it does the most business, no matter where your residence or drivers license is from.
8. I'm planning to start an online business - where should I register?
A lot of modern start-up businesses are e-businesses that 'do business' almost exclusively on the Internet or through smart phones. Since the Internet is not located in any specific place, it can be difficult to judge where these companies are doing business. The safe route is for e-entrepreneurs simply to register their business in their local jurisdiction. If the e-business ever grows to require traditional 'brick and mortar'
infrastructure, at that time you can consider whether or not business is taking place in other jurisdictions.
9. Can starting my own business help me get my green card faster?
The EB-5 visa program enables entrepreneurs who create jobs in America to get green cards for themselves and their family. The adjudications are much faster than other employment-based avenues. If your small business becomes successful and results in retained earnings of $1,000,000 (or $500,000 in some cases), and you have created 10 full-time jobs for Americans, you can use your business as a new basis for your I-485 and get your provisional green card faster.