
Ask HN: On H1B right now, can I be a co-founder? - BadassFractal
A friend and I have been working on an exciting software project for a few months now. He's a US citizen and I myself am staying in the US on a H1B while working for a big software company. We would like to incorporate, but I'm really not sure about what that means for me from a legal standpoint.<p>Would I be breaking any laws if I were to be the co-founder?
What happens once we receive any kind of investment, can I pay myself anything? Supposedly you can't have a "salary" unless you have a H1b, so can I get myself a H1B sponsored by my own company?
Is having equity against my H1B in the first place?
Can I even "work" for this corporation or do I have to use some kind of loophole?<p>And yes, I went to talk to an immigration lawyer already about this and he basically asked for an extra couple of grand out of me just so he could spend time researching this question, and even then he said he couldn't guarantee to find an answer and might require additional cash :|
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marcamillion
Yes, you would be breaking a law if you are a co-founder of a US company while
on H1-B.

>The H-1B is a non-immigrant visa in the United States under the Immigration
and Nationality Act, section 101(a)(15)(H). It allows U.S. employers to
temporarily employ foreign workers in specialty occupations. If a foreign
worker in H-1B status quits or is dismissed from the sponsoring employer, the
worker must either apply for and be granted a change of status to another non-
immigrant status, find another employer (subject to application for adjustment
of status and/or change of visa), or leave the United States.

<http://en.wikipedia.org/wiki/H-1B_visa>

Many people get this mixed up. Non-immigrant visas mean you can only do what
your visa specifies that you can do.

A student visa is a non-immigrant studying visa. You can only study.

H1-B visa is a non-immigrant specialty work permit visa. i.e. you are working
within your area of study, for a pre-approved company that has sponsored you
your visa.

It's probably not the answer you want to hear, but I spent a lot of time
researching it and speaking to multiple attorneys while I was trying to do the
same thing. I eventually decided to return home, for a number of reasons.

That being said, I have friends that have done it and not gotten detected, but
that's a fool's errand. You are risking the company if you do that.

~~~
akuzi
You can easily transfer your H1-B to another company (the one you hold equity
in), it is not a big deal. What you can't do is work for both companies at the
same time.

~~~
patrickod
I thought one of the stipulations of the H1-B was that you couldn't self-
sponsor ?

~~~
tmorgan
That's right, but your co-founder(s) can sponsor you, and indeed you them.
Provided that you could in theory be fired (a three person board for example)
then you can be classed as an employee for the purposes of the H1-B.

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RealGeek
Legally, you can be a co-founder of a company while you are on H1-B. But, you
can not participate in business activities and you can not take salary.

You can get H1-B visa sponsored by your own company. Manu Kumar of K9 Ventures
was able to do this, read [http://k9ventures.com/blog/2009/09/24/my-story-and-
support-f...](http://k9ventures.com/blog/2009/09/24/my-story-and-support-for-
the-founders-visa/)

It should be easier for you with a US citizen co-founder.

~~~
BadassFractal
Do you have a guess for what "business activity" means and where you draw the
line? And yes, YANAL.

Great link by the way, thanks. This guy has to jump through so many hoops just
to stay in here, and seems like he was always a couple of weeks away from
being kicked out.

~~~
RealGeek
You are not allowed to do any sort of work for your company including
programming, business development, marketing etc. You can only be an inactive
partner in the company.

But practically speaking, you could get away with it while two of you develop
the software from your apartment. USCIS is not going to monitor what you have
been doing on your computer at home.

It would be difficult when your business grows and have employees & customers.
Make sure that you are able to transfer H1-B to your company by then.

I guess founders of few YC and TechStars companies come to US on Visa Waiver
Program or Visitor visa for few months and work on their startup.

------
patrickgzill
You can _own_ anything that it is legal for any American to own (except for
guns and a few other restrictions). So you could definitely have ownership
interest in the company.

I would look for a better immigration lawyer - IME many of them are on the
lower rungs of lawyerly proficiency to begin with and are dumb, fat, and happy
as a result of collecting thousands of dollars to basically help you fill out
paperwork.

Finding one that already has experience helping someone with what you want to
do is key.

~~~
BadassFractal
Great point. I'd have to find someone who's had tons of experience with both
corporate and immigration law.

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Lewisham
Yeah, you'll be breaking the law, whether you receive money or not. You cannot
do any work for the company. Think of it this way: even if you went out and
painted fences for people, you'd be breaking the law. You can't do anything
for anyone, aside from volunteering.

I do not know the process for the company to get an H1-B quota, but the
likelihood is that it will cost more than you think. If you can't afford the
immigration lawyer, you can't afford to play these games with the US
government. It's dangerous for both the company and yourself.

You're pretty screwed here (this is the H1-B working by design). What I think
I have seen in the past is the immigrant actually leaves the US for their home
country, work for the company there, then once its off the ground, you come
back.

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Udo
Yeah, that's illegal. But let's look at what you _could_ do instead.

I believe you can co-own an American company as a "normal" foreign citizen and
be in the US from time to time for a couple of weeks, as long as you go home
to your resident country in between. I know some business people who actually
do that, jetting back and forth between two or three countries where they are
involved. It's a pretty interesting lifestyle, too, as long as you can afford
the plane tickets and (at least) two separate homes.

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sabhishek1
I think you can do two things :- 1) Incorporate the company, and sponsor a
part-time H1B using it. You can have two H1Bs active at the same time, but
only one can be full time. This way you will be able to keep your day job. You
will need to pay yourself salary, and pay taxes to uncle sam.

2) Sponsor a full time H1B with your own company. You will need to quit your
day job for this. But its possible. Salary requirement is more strict for full
time position.

IANAL. This is based on my research from a few years ago.

------
ipince
My understanding is that you can own a company (or part of one). However, you
most definitely _cannot_ do any work for it or take any salary, because your
current visa is not sponsored by it. (You can only ever work for your visa
sponsor).

Now, what about quitting your current job and having your own company sponsor
you? My understanding there is that you cannot have "control" over the company
that sponsors you. I quote "control" because this is where things get fuzzy
and I'm not entirely sure how it's defined. But if you want to be "co-founder
and c[et]o" of your company, then no...

Despite all this, it can be done. You can "game" the system by, for example,
having your cofounder be the only (legal) founder and sponsoring you, where
you'd be only a "regular" employee. Or hiring and American and claiming that
you never do any work (you just have ownership), and that he/she does. Keep in
mind that these examples are going against what the law intends (even though
only the second is outright illegal), so the government can and will screw you
over if they find out.

Long story short: sorry, you're in a bad situation. I'm the exact same boat...
It's doable, but you'd be playing with fire. Be careful!

(Obvious disclaimer: IANAL)

Edit: posted prematurely..

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dikbrouwer
I see a few people suggesting that you start a new entity and have that
company hire you. Be very careful about this since the DHS specifically tries
to prevent this type of setup. In fact, it is very difficult for a startup to
prove that they are a 'real company', and having paid employees, an office
(pictures help), and money in the bank are almost a must. I've been through
this a bunch of times (even with companies that have raised a series A), and
it still took 4 months of writing letters before the case was approved.

Secondly, don't make the mistake of trying to hire yourself as the
CEO/CFO/C-something, since an H-1B only applies to a 'specialty occupation' as
was correctly pointed out. This means that it is much easier to convince the
DHS that you are eligible for a visa if you are 'applying' as an engineer,
product designer or what have you vs. a general management/C-level position.

------
hzay
What follows is hearsay but it might give you an idea of where you stand.

Some co-founders in the latest YC batch are on H1B. I do not know how this can
be done but maybe you could look through a list of founders, locate the non-
Americans and ask them (by guessing their email, maybe?).

You cannot start a LLC in the US all by yourself, but that should not be a
problem if your co-founder is American. He can start it. I've heard that your
startup cannot sponsor your H1B visa unless it can be shown that you can be
fired, which is not possible unless you give away a lot of equity.

I've heard of someone who was on H1B, attended Startup School, walked around
trying to talk people into sponsoring his visa so that he can start his
startup, and finally got someone to do it. I'm on H1B and just started sending
out feelers.

Good luck!

~~~
BadassFractal
This seems like a possibility, and definitely better than giving up altogether
:)

Was this the list of 2011 batch you were referring to?
[http://us.pycon.org/2011/blog/2011/03/07/pycon-2011-live-
sta...](http://us.pycon.org/2011/blog/2011/03/07/pycon-2011-live-startup-row/)

Thanks!

------
vtail
BadassFractal, thank you for asking this question - I'm in the same boat and
your question produced an interesting discussion.

I'm wondering whether you're considering to found a company _somewhere else_,
e.g. Hong Kong or Taiwan or any other business-friendly place? In that case
both you and your cofounder can own shares of the company, you can work(?) for
this company, etc.

Obvious disclaimer: IANAL

~~~
BadassFractal
I always have the option of going back to the EU and working from there, but
as you can understand, most of us would rather be in the country where the
majority of the company will be located.

Can you expand on the concept of a country being business-friendly? Wouldn't I
be able to work for an American company anywhere in the world, or would my
country of residence be able to restrict that?

~~~
vtail
Locations like Hong Kong has very simple tax codes etc. It arguably easier to
found a company their than in some EU countries as well.

~~~
vtail
This one is from an article that's at the front page now ('Moving to
Singapore'): <http://en.wikipedia.org/wiki/Ease_of_Doing_Business_Index>

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gopi
There are so many creative (and risky) ways to do it. One way is get your h1b
thro a small consultancy which in turn contract you to your company. There are
a lot of smalltime bodyshop companies which can do it for you but this
requires that your company makes enough money to pay for the consulting
company (atleast $50 per hour/2k hours per year)

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akuzi
Yes you can but you will need to get your H1-B transferred to the new company.

Non US-citizens can hold equity in C-Corps (not S-Corps), but that by itself
does not allow you to live or work in the US. You would need to you get your
H1-B transferred to the new company, but this is not a particularly difficult
process.

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petervandijck
Talk to an immigration laywer. (Someone who specializes in this, _not_ a
general laywer.)

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pm90
umm... does anyone know how vinod
khosla(<http://en.wikipedia.org/wiki/Vinod_Khosla>) start so many
companies(Sun Microsystems) just after graduating? I believe he was not a U.S
citizen and had come to the U.S only for his education.

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pier0
Homeland Security USA episode 203: Startup Founders

Starring:

BadassFractal the startup founder

H1B the visa

OnlyCash the lawyer

HN crowd the wannabe lawyers

Live now on Hacker News

------
known
On H1B you can't _own_ a company.

You must be an _employee_ of your H1B sponsored company.

