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.

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! :-)

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

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 18th, 2013

Is there a reason that starting it/owning it in your home country is not an option for you? Sent from my iPhone


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.


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.

Rob G

November 19th, 2013

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.