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Non-immigrant foreign entrepreneurs who want to start businesses in the US often. And rightly – have visa-related concerns.
A typical question: “What kind of visa do I need to start my business?
Visa Waiver:
It allows an individual to come to the US for 90 days. No extension or change of status is permitted. Allows attendance at business meetings and other passive business development activities. It does not let compensation from US sources.
B-1
Business visitors are allowed admission for up to six months. It can be extended and permits a change to a different immigration status. Allows passive business activities, but not productive work in the US or receipt of any US-based remuneration. However, expenses can be reimbursed. Must benefit a foreign, rather than US business.
E-2
Investor: Requires that a US entity be set up and that a substantial investment be made into that entity. Takes several months to obtain and is comparatively expensive.
This applies to investors from countries with which the US has applicable treaties. It will be used for two years and may extend for additional two-year periods without limitation.
H-1B
Specialty occupation: Allows a US employer to hire an individual for a specified complex or unique job for a period of up to three years because the position cannot be filled quickly from the workforce available in the US. Typically it can be extended to six years. The individual can form a business in the US but cannot work for it. Note that USCIS gives H-1B cases, particularly scrutiny.
L-1
Intracompany Transferee: Requires setting up a US company that is a subsidiary or affiliate of an existing foreign company. The individual must have been working for an international company for at least one year before the transfer.
The individual must be working in the US in a managerial, executive, or specialized knowledge capacity. Valid for five years (special-knowledge employees) or seven years (managers or executives). “Dual intent” visa, meaning the holder can apply for a green card without jeopardizing the permission.
Visa Basics for Foreign Entrepreneurs, Part 2:
What Constitutes Work?
In Visa Basics for Foreign Entrepreneurs Coming to the US, I discussed certain immigration statuses (visa waiver, B-1, and H-1B visas) that permit a non-resident alien to take a passive role in a business (such as forming it) but not to work for it.
This article discusses the boundary between permissible passive activities and prohibited work.
Let’s assume that the new business formed as a corporation.
As a shareholder certainly is a passive activity.
For a director (board member) typically should be a passive activity, too, because the director’s role is one of oversight and approval (elect officers, approve significant transactions, etc.), rather than running the business.
Being an officer is not permitted, however. Officers are directly responsible for running the business. Thus they are inherently actively involved in working for it.
Summary if you are a non-resident alien who must keep his or her activities for a business passive: It’s OK to be a shareholder and a director, but don’t become an officer, employee, or independent contractor of the company or do any additional work for it.
