Ask HN:Can I start a company on an H1B visa? - sbansal
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samstokes
It's unclear whether the OP is asking "Can I found a US company and then move
to the US to work on that company via the company applying for an H1B visa for
me?", or "Can I, currently in the US on an H1B visa, start a new company and
work for it?". I suspect the answer to the latter question is "no". The rest
of this comment assumes the former question.

As others here have said, an H1B visa requires demonstrating that the company
could fire you, which isn't usually true if you own it. In the case of
Rapportive, we had 3 cofounders, all needing visas; 3 turns out to be the
perfect number for H1B purposes, because any two of you own enough of the
company to fire the third. That sounds a bit circular, but made enough sense
to USCIS that we got our visas, even though none of us was a US citizen. (Not
that it was easy, but our difficulties were more about convincing them we were
a real company.)

Of course, this isn't legal advice, and you'll want a good immigration lawyer
who can prepare the petition appropriately for this arrangement.

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kodeshpa
H1B -> Starting company -> Getting Funding -> Transferring Visa is not
impossible but have lot of hurdles.

Irrespective of traction,you have to do following which is very frustrating &
time consuming.

1\. Your company need to demonstrate ability to pay us "prevailing wages" as
per SF standards [76k per year per person ] or Santa Clara [82 k per year
person], office space and other general needs.

2\. You need to hire some one (contractor is okie ) US citizen/Green card
holder to sign off on the H1 application. That person can be any non technical
person .e.g. accounting or marketing to demonstrate employee employer
relationship.

3\. You need to hire yourself as software developer demonstrating right skills
and acting temp CEO /CTO . C position usually have higher salary ranges and
have USCIS complications.

4.Form a board of directors who will have right to hire and fire you

Get lawyer who knows and have experience in immigration.

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avichal
Background: I've hired many many people on H1B and helped friends on visas
start businesses.

TL;DR - In practice, this is very difficult to pull off. There are some
chicken and egg issues that make it very difficult and the government is a
pain in the ass about it too.

The rule of thumbs are that you cannot control the business that is giving you
a visa (you can be fired from the job), the company has to demonstrate
significant financial resources to employ you, and you have to do the transfer
in a way that doesn't raise red flags with the government. Let's break these
down.

1 - you cannot have a controlling interest in the business. This means you
need a cofounder or cofounders so that your share of the business is less than
50%. Finding cofounders is tough. Especially cofounders who want to run the
risk of you being deported during the next 4 years. Yes, there are ways to do
it so that you own 49% and your cofounder owns 51%, but then you better be
really sure that you want to give up board control and company control to this
other person. This also means that your cofounder has to be a citizen or green
card holder. Lots of constraints...

2 - financial resources either means you're putting up a million dollars of
your own money or you've gotten an investor to give you $500k. But why is an
investor going to give you $500k without a product or cofounder ready to go,
and with a chance that you may run into visa issues and not be able to run the
business? And therein is the chicken-and-egg situation. You can't stay without
a financially sound company. But no one will give you money if you can't stay.
So most people wait till they have a green card or build something on the side
until they can get some traction or get some clients so they can show enough
traction to raise funding.

3 - we almost got screwed with one of our employees at Spool because the
government thought we didn't exist. Pre-launch we didn't have a website, our
address was a UPS box, and though we were funded and clearly real, the USCIS
basically rejected the visa transfer for one of our employees because they
thought we were a shell company setup just for this guy to stay in the US
without working.

Ultimately, there are people in an office at USCIS that make these decisions.
These people will reject applications if something smells fishy, will reject
it if they think this is a shell corporation just so you can stay in the US,
or if they don't understand that startups get started and hire employees in
month 1 of existence. Keep in mind that this transfer has to happen quickly.
Your previous employer has something like 30 days to report that you don't
work there any more. And your new employer gets to keep you in the country as
long as the visa transfer is in process, but if you get rejected you're out of
the country. So the transfer needs to happen quickly...and often your company
just got started, has no other employees, has no website or product in the
marketplace yet, and various other red flags as far as USCIS is concerned. The
sequencing of all of these events in practice is difficult.

===== The best option ===== There are lots of "clever" options. I don't
endorse any of them and you try them at your own risk. The safest option is to
try and start something on the side, get enough traction to be able to pull
together a seed round, and then have that new company sponsor your h1b. Lots
of investors will give you money if you demonstrate the beginnings of a real
business. This is extremely difficult though...you will basically need to work
two full time jobs until you can raise a seed round.

I really wish it weren't this way but unfortunately the US government's rules
were built in a manufacturing era and make no sense in our modern information
age.

 __ _Disclaimer: This is not legal advice. Go talk to an immigration lawyer
for real legal advice._ __

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karterk
_The safest option is to try and start something on the side, get enough
traction to be able to pull together a seed round, and then have that new
company sponsor your h1b._

However, from what I heard - if you're on H1B you can only work for the
company that sponsored your visa. So, the "best option" itself is pretty
dicey.

~~~
avichal
Transferring an H1B to a company that the government thinks is legitimate is
very straightforward. I was just hoping to outline the steps to getting a
company considered legitimate. So if you can get your company off the ground
and considered legitimate (the hard part) then you can have your visa
transferred to that company (the easy part).

There are certainly employment contract issues -- moonlighting clauses, non-
solicitation, and non-compete agreements. But those all apply to anyone
building something on the side while employed full-time.

~~~
kijin
I think the point @karterk was trying to make is that it might be illegal for
you to do any paid work at all at your own startup (or any other company other
than your original employer), regardless of whether your original employer
allows moonlighting or not. I'm not sure how H1B works in the U.S., but a lot
of countries have rules like that attached to work visas. So until your visa
has been transferred to your startup, your startup can't pay you any salary.

~~~
rglullis
There are more ways to get paid by a company than by being a salaried
employee. And some of them are even legal.

~~~
kijin
Yes, but being an early-stage startup would limit your options.

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suprgeek
I have been in you shoes in the past (and left America due to frustration of
the complexities of the process). Also, I am not a Lawyer - caveat emptor.

Short answer - get a US citizen to act as the Majority Partner in the business
if at all possible. Do not accept even a cent from your new company if you go
this route until it is set up and Generating Payroll. Once founded then
transfer your H1 using your new company and then become employee/partner.

There are still ways around the stringent H1-B rules for employment that you
can use to start a company in your name. However I must advise extreme caution
in using any of them. The USCIS (citizenship and Immigration) might take a dim
view of people who enter the US for a "Specialty Occupation" visa and then
switch to founding companies.

I wish you the best of luck - it takes a lot of work to get a company going.
Doing it while dealing with the complexities of the US Visa system is just
adding to the mountain of difficulties you need to overcome.

If you do pull it off legally, maybe you can write a blog post that tackles
this issue for other aspiring entrepreneurs who would love to tread in your
path.

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sbansal
I am planning on starting a company with a partner who is a US citizen. I
currently hold an H1B visa. Just wanted to know if people here have some
pointers as to if this is even possible. I am going to be talking to an
attorney but just wanted to get an idea before that. I have read about the
startup visa act but it is still pending legislation.

~~~
chx
Try operating from Vancouver, BC. There's a reason so many of your kind end up
here.

~~~
mathrawka
"your kind" sure has a nuance in English that doesn't mean something good...

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ig1
As a rule of thumb if your company has an independent board that can fire you
then it can sponsor your H1B. In practice this tends to mean you need to have
investors owning a sizable share of the company.

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ramiyer21a
All wonderful advice and legally accurate. The best thing I can tell you
is...start the business. If you have paying customers...everything else will
fall into place automatically. Getting paying customers is the hardest part of
starting any business. At worse, you will be able to run your company remotely
from whatever country you are from. However, if your intent is to get the GC
by way of starting a company, then there are lot of other easier options
without suffering thru starting a company.

~~~
ramiyer21a
BTW, read this post...<http://nodemaker.posterous.com/the-problem-with-ideas>

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vineet
Quick Answer: Yes, you can _start_ the company. BUT, you can't work for the
company that company. Mostly, work = getting a salary.

If you are trying to start a company, feel free to incorporate it and own all
of it. I would suggest worrying about getting paid once you have revenues
coming in.

Then hire a good lawyer to figure out your options.

If you see huge growth getting paid should be easier with investors (IANAL).
Alternatively, you can have it run on the side with the company collecting the
revenue that you can eventually retire on.

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sbansal
Thanks for all the comments. Really helpful.Just to give some more background,
I am currently working on an H1B and looking for ways with another partner who
is a US Citizen. He would own a majority stake between 60%-70% and thus has
the controlling stake.

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zmagg
Yes (see @achival's post), but if you ever want to naturalize (get a green
card), you'll have serious problems.

My father's in the process of working through the 'serious problems', please
email me (in my profile) if you want more details.

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mrkmcknz
In my belief this could be tricky as I'm sure the H1B is actually tied to your
current employer and would become invalid once you left that company.

I'm not sure however and I certainly wouldn't go off my word.

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skillachie
Thank you for asking this question.

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recoiledsnake
You can own a business but you cannot work for it or collect a salary from it
without having a H1 from that particular company. It's just like owning stock
which is allowed under H1 but not working for any employer just like that
without USCIS authorization.

The rules for your company employing you is that you should be firable by some
other person or the board i.e someone has to have a control over you. You
should not taking decisions about yourself.

~~~
sbansal
Does that work if I have the minority stake in the company and my partner owns
the major chunk?

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velus
You can start one but can not work for one.

