OtisUsenet

Hi,

Are H1B visa holders allowed to start Sole Proprietorships?

That is, while keeping the H1B sponsorship from their regular employer,
can they start a Sole Proprietorship on the side? (IT consultancy type
of business)

If so, what about W-9s and taxes?
Should one provide information for W-9s to the clients of this Sole
Propriatorship?

What if the Sole Prop. is profitable, what happens to the profits?
Do they simply have to stay in the bank, since the owner must not pay
him/herself in order not to break the immigration law? In that case,
wouldn't the owner be paying taxes on these profits as taxable income,
yet would be unable to get to that income, because he/she couldn't pay
him/herself?


Thank you.

Joe Feise

OtisUsenet wrote on 11/24/06 09:58:

> Hi,
>
> Are H1B visa holders allowed to start Sole Proprietorships?
>
> That is, while keeping the H1B sponsorship from their regular employer,
> can they start a Sole Proprietorship on the side? (IT consultancy type
> of business)


A person on H1 can start a business, but the person can *not* work for it, in
any form, without the appropriate work authorization.
In other words, on H1 you are basically limited to being a passive investor.

-Joe

OtisUsenet

Thanks, Joe.

Are there any opinions out there about outfits like this:
http://www.independenth1b.com/
They look like a legit way to get around this limitations, but I'm
wondering if anyne has any experiences with it.

Thanks.

Joe Feise wrote:
> OtisUsenet wrote on 11/24/06 09:58:
>
> > Hi,
> >
> > Are H1B visa holders allowed to start Sole Proprietorships?
> >
> > That is, while keeping the H1B sponsorship from their regular employer,
> > can they start a Sole Proprietorship on the side? (IT consultancy type
> > of business)
>
>
> A person on H1 can start a business, but the person can *not* work for it, in
> any form, without the appropriate work authorization.
> In other words, on H1 you are basically limited to being a passive investor.
>
> -Joe
> --
> I am not a lawyer.
> For reliable advice, consult a competent immigration attorney.

Kaushick

> Thanks, Joe.
>
> Are there any opinions out there about outfits like this:
> http://www.independenth1b.com/
> They look like a legit way to get around this limitations, but I'm
> wondering if anyne has any experiences with it.
>
> Thanks.
>
> Joe Feise wrote:
> > OtisUsenet wrote on 11/24/06 09:58:
> > > Hi,
> > >
> > > Are H1B visa holders allowed to start Sole Proprietorships?
> > >
> > > That is, while keeping the H1B sponsorship from their regular
> > > employer,
> > > can they start a Sole Proprietorship on the side? (IT consultancy
> > > type
> > > of business)
> > A person on H1 can start a business, but the person can *not* work
> > for it, in
> > any form, without the appropriate work authorization.
> > In other words, on H1 you are basically limited to being a passive
> > investor.
> > -Joe
> > --
> > I am not a lawyer.
> > For reliable advice, consult a competent immigration attorney.

This looks like just another consulting company promising 90% bill rate.
Go to www.sulekha.com and you'll find 100's like this.

Joe Feise

>> Thanks, Joe.

>>
>> Are there any opinions out there about outfits like this:
>> http://www.independenth1b.com/
>> They look like a legit way to get around this limitations, but I'm

>> wondering if anyne has any experiences with it.


That would be nothing more than a consulting company, claiming (as a lot of
consultants do) wrong things.
They just "rent" you out to some client. You are still *their* employee. And you
are paid by *them*. Lots of these consultants, btw, violate the law by not
paying their employees for unproductive time, i.e., time on bench. They couldn't
offer these seemingly good rates if they would pay people on bench, because they
would need to have some reserves to pay for the unproductive times.
Economics 101... As somebody on H1, educated, with a college degree, you should
be able to figure out that if it sounds too good, it probably is...

And trying to work for your own company this way won't work, either. Somebody in
your company would have to sign a contract with them. You obviously can't do
that, since you are not allowed to work for your company. And you can't instruct
the person running the company you invested in to sign such a contract. Doing so
would be work as well.
Bottom line: on H1, you would be limited to passive investment in a company.

-Joe

OtisUsenet

Thanks, Joe.
So what is the secret sauce? That is, how do all those non-Americans
in Silicon Valley (just an example) start companies, sell companies,
etc.? I don't have any firm examples, but there _are_ a lot of
foreigners/immigrants starting companies, and I doubt all of them have
Green Cards. I just read something on that topic the other day - the
there is a pretty high percentage of VC-funded companies whose either
founder or co-founder is an immigrant. So how do they do it?

See:
http://www.boston.com/business/techn...by_immigrants/
Some more here:
http://www.google.com/search?q=immig...nded%20venture

Thanks!


Joe Feise wrote:
> >> Thanks, Joe.
>
> >>
> >> Are there any opinions out there about outfits like this:
> >> http://www.independenth1b.com/
> >> They look like a legit way to get around this limitations, but I'm
>
> >> wondering if anyne has any experiences with it.
>
>
> That would be nothing more than a consulting company, claiming (as a lot of
> consultants do) wrong things.
> They just "rent" you out to some client. You are still *their* employee. And you
> are paid by *them*. Lots of these consultants, btw, violate the law by not
> paying their employees for unproductive time, i.e., time on bench. They couldn't
> offer these seemingly good rates if they would pay people on bench, because they
> would need to have some reserves to pay for the unproductive times.
> Economics 101... As somebody on H1, educated, with a college degree, you should
> be able to figure out that if it sounds too good, it probably is...
>
> And trying to work for your own company this way won't work, either. Somebody in
> your company would have to sign a contract with them. You obviously can't do
> that, since you are not allowed to work for your company. And you can't instruct
> the person running the company you invested in to sign such a contract. Doing so
> would be work as well.
> Bottom line: on H1, you would be limited to passive investment in a company.
>
> -Joe
> --
> I am not a lawyer.
> For reliable advice, consult a competent immigration attorney.

J. J. Farrell

OtisUsenet wrote:
> Thanks, Joe.
> So what is the secret sauce? That is, how do all those non-Americans
> in Silicon Valley (just an example) start companies, sell companies,
> etc.? I don't have any firm examples, but there _are_ a lot of
> foreigners/immigrants starting companies, and I doubt all of them have
> Green Cards. I just read something on that topic the other day - the
> there is a pretty high percentage of VC-funded companies whose either
> founder or co-founder is an immigrant. So how do they do it?

Why do you doubt they have Green Cards? The "secret sauce" is to be in
some immigration status which allows them to set up and work for
companies, and the most likely of those is Green Card.

J. J. Farrell

J. J. Farrell wrote:
> OtisUsenet wrote:
> > Thanks, Joe.
> > So what is the secret sauce? That is, how do all those non-Americans
> > in Silicon Valley (just an example) start companies, sell companies,
> > etc.? I don't have any firm examples, but there _are_ a lot of
> > foreigners/immigrants starting companies, and I doubt all of them have
> > Green Cards. I just read something on that topic the other day - the
> > there is a pretty high percentage of VC-funded companies whose either
> > founder or co-founder is an immigrant. So how do they do it?
>
> Why do you doubt they have Green Cards? The "secret sauce" is to be in
> some immigration status which allows them to set up and work for
> companies, and the most likely of those is Green Card.

And the many who have become citizens before founding their companies
don't have Green Cards, of course ...

Joe Feise

OtisUsenet wrote on 12/04/06 15:38:

> Thanks, Joe.
> So what is the secret sauce? That is, how do all those non-Americans
> in Silicon Valley (just an example) start companies, sell companies,
> etc.? I don't have any firm examples, but there _are_ a lot of
> foreigners/immigrants starting companies, and I doubt all of them have
> Green Cards. I just read something on that topic the other day - the
> there is a pretty high percentage of VC-funded companies whose either
> founder or co-founder is an immigrant. So how do they do it?


They have Greencards, or are US citizens. Prime example: Sergey Brin, one of the
Google founders. He immigrated as child with his parents:
http://en.wikipedia.org/wiki/Sergey_Brin
I know of only one company (Borland) founded by somebody on a visitor visa, who
violated the laws by working for his company, and later got a GC, anyway. But
that was in the early 80ies, and wouldn't be possible today, due to changes in
the immigration law since then (major changes happened in 1989, 1996, and 2001):
http://en.wikipedia.org/wiki/Philippe_Kahn

-Joe

OtisUsenet

Ah, interesting, so you think they are immigrants, but have acquired
their Green Cards or citizenships, and that is how they started their
businesses/companies. I always assumed that wasn't the case. For
instance, I thought Sabeer Bhatia, the Hotmail co-founder was on H1-B
when he created Hotmail....

...I did a few Google searches, and confirmed that:

"Also, people like Vinod Khosla (co-founder Sun Micro), Sabeer Bhatia
(co-founder Hotmail); the guy who founded i2 Technologies etc
etc...were all H1-b guys"
( from http://blog.meebo.com/?feed=rss2&p7 )

Vinod Khosla is old school, but Sabeer Bhatia is a relatively recent
history, and I haven't heard of any immigration laws regarding H1-B
holders and business creation changing since the late 90s, when Hotmail
was created.

So... how did they/he do it?

Ok, how about the following, then:

A person on H1-B can start a business, he/she just can't work for it.
In that case, can this H1-B person with a U.S business simply hire
somebody else to do all the work? Imagine an H1-B person who is well
known in his/her field, and thus attracts business/clients just by
being the owner of the business, but after the initial attraction, all
work is done by another person, an employee of the company that the
H1-B person owns.

Is this legal?
Add to that - how about if this employee is an American, but living and
working from abroad?

Thanks.


Joe Feise wrote:
> OtisUsenet wrote on 12/04/06 15:38:
>
> > Thanks, Joe.
> > So what is the secret sauce? That is, how do all those non-Americans
> > in Silicon Valley (just an example) start companies, sell companies,
> > etc.? I don't have any firm examples, but there _are_ a lot of
> > foreigners/immigrants starting companies, and I doubt all of them have
> > Green Cards. I just read something on that topic the other day - the
> > there is a pretty high percentage of VC-funded companies whose either
> > founder or co-founder is an immigrant. So how do they do it?
>
>
> They have Greencards, or are US citizens. Prime example: Sergey Brin, one of the
> Google founders. He immigrated as child with his parents:
> http://en.wikipedia.org/wiki/Sergey_Brin
> I know of only one company (Borland) founded by somebody on a visitor visa, who
> violated the laws by working for his company, and later got a GC, anyway. But
> that was in the early 80ies, and wouldn't be possible today, due to changes in
> the immigration law since then (major changes happened in 1989, 1996, and 2001):
> http://en.wikipedia.org/wiki/Philippe_Kahn
>
> -Joe
> --
> I am not a lawyer.
> For reliable advice, consult a competent immigration attorney.