Posted Jun 11, 2002; updated May 23, 2006

Starting a company generally begins with one good idea. To bring this idea to fruition, one has to consider other aspects of entrepreneurship. These include finance, marketing, facilities, employees, legal issues etc.

The Murthy Law Firm is often asked questions pertaining to starting a company while on H1B or other nonimmigrant work status. Here we address questions and concerns of these nonimmigrants and of others who wish to hire foreign employees.

Overview of considerations in setting up a StartUp venture :
In order to start a business or any new venture, one must consider certain preliminary issues: the nature of the legal entity (corporation, LLC, LLP, limited partnership, general partnership etc.) and in which state should the venture be created and established (since state law governs legal aspects in dealing with the venture). Also to be considered are the kinds of services the venture will provide, taxation issues, applicable immigration laws, administrative procedures etc.

Is a nonimmigrant on H1B able to work for ANY company?
A person on H1B status is legally allowed to remain in the U.S. and work only with the employer that obtained the H1B Petition approval with the INS for the individual, subject to the terms and conditions mentioned on the H1B application. In order for the person on an H1B to work for another company or employer, s/he would either obtain a concurrent H1B approval to work for the new entity, in addition to the present employer or, if possible, could obtain H1B approval to change jobs and work for the new company only. In either case, H1B approval for the new company would be possible only if there is adequate documentation showing that the company is in a position to offer employment in view of its prospects, financial picture and projections, and its customer or client base, if applicable.

Can a nonimmigrant, foreign worker invest money in any venture?
A foreign national who is living or working in the United States can invest money in any venture or enterprise. The law allows foreign nationals in the United States to purchase any assets or property, including real estate. Conversely, in order to protect U.S. workers, both citizens and green card holders, the United States Citizenship and Immigration Services (USCIS) and the U.S. Department of Labor (DOL) require that the foreign national obtain certain work authorization.

In other words, a person on an H1B or other temporary work visa in the United States is legally allowed to invest in any venture or company and could possibly undertake some limited volunteer work on behalf of the venture or company. However, the individual cannot work indefinitely for that company and earn a salary without obtaining prior approval from the USCIS or DOL to work for the particular venture or company.

What are some strategies for getting started?
How does one develop a company to a point that an H1B approval can be obtained if one cannot work there, yet? It is generally helpful to start the company together with a U.S. citizen or permanent resident, since that person would have an unrestricted ability to work. The citizen or permanent resident could solicit funding, do market research, attend trade shows etc, without worrying about violating the terms of his or her work visa status. In that way, the H1B holder could remain a passive investor until s/he obtains an approval to work for the new company.

We have also seen groups of H1B holders join together to start companies. While it is necessary to be extremely careful not to violate one's status, at least in this situation there are more people involved amongst whom to spread volunteer efforts and get the company started.

What can the Murthy Law Firm do for your StartUp?
Since we practice exclusively in the area of U.S. immigration and citizenship law, StartUp companies must to find other expert assistance with the nonimmigration aspects of setting up business. 

As the venture's immigration counsel, we strategize and devise practical and most useful ways for company employees to obtain their work visas or green cards. Based on whether the company has foreign operations, the venture or company may have other options such as the L-1 (intra-company transferee), or E-1 or E-2. (See Practice Areas and Glossary of U.S. Immigration Terms for these and other immigration law terms.)

We are happy to work with other outside experts proficient in matters of state law, corporate and taxation matters. Each state in the United States has different laws pertaining to corporate / business law and state and local tax issues. U.S. immigration law is purely federal in nature, however, having no state law components under the Doctrine of Preemption. Thus, the Murthy Law Firm can assist businesses anywhere in the U.S. with all immigration law matters in bringing workers from abroad or in transferring foreign nationals already living and working in the U.S. to the employment of the new StartUp.

How can the StartUp bring people into the United States?
Depending on the person's education and work experience, and the status of the person in the U.S., there are various options available for the StartUp company to use the services of the professional or qualified worker. The person could be transferring from one employer to another. The company could subcontract the foreign national employee from an existing H1B employer. The company could directly bring the person from abroad. As mentioned above, the company could bring the person on an L1A or L1B if the StartUp company in the United States has a branch or affiliation in a foreign country where the employee has worked for a certain period of time prior to entering the United States at the foreign branch or operations.

In conclusion, we at the Murthy Law Firm enjoy working with StartUp companies. It is an exciting opportunity to work closely with high-energy people, who are enthusiastic, hard working visionaries.

The Murthy Law Firm has helped many StartUp companies to realize their goals. We look forward to helping you realize your own!


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