The answer is complex and nuanced unfortunately. You absolutely cannot get compensated by another source unless that compensation/work has been authorized by USCIS. One option is to obtain a concurrent part-time H-1B through your company. This has its own challenges because of the newness of the company and the founder's ownership in and control of the startup. There are however many things that a founder can do in connection with his or her own startup while in H-1B status with another company without crossing the line.
Hi Peter,
I am on h1b and working for an employer. I am joining as a co-founder to a startup. Can I get compensation or profit for my work there? I am expecting to resume role of CTO. Can there be any legal implications?
Peter, I am in H1B visa working full time for my employer, but I am also a co-founder with equal equity (nothing on paper as on date) for a startup incorporated in Delaware.
Is it legal to be a co-founder (and own equity) in a startup other than the employer who sponsored my H1B? If yes, what I need to do? Thanks.
You're allowed to start, and own, a company while on an H1-B. You're allowed to work for it too, so long as you continue to also work for the company that sponsors your H1-B.
You are not allowed to pay yourself anything from the new company while on an H1-B.
If one of your co-founders, or investors, is a US citizen you *might* be able to arrange a transfer of the H1-B to the new company. This is difficult and expensive though (at least we found it so). I decided it was more sensible for me to just wait for the Green Card.
There are visas where the foreign national can control/own/run the company he or she works for, such as the E-1/E-2, O-1, and L-1 visas. It's more complicated and tougher if you want to remain in H-1B status and work for your own company; in that situation, you have to give up some control to a cofounder or board. To be clear, it's possible to maintain your H-1B with your current employer and get a concurrent part-time H-1B through your own company (assuming the conditions above are met).
What you and your cofounder is doing now (working part time on your web-app) is probably already illegal while on your H1B, even if you're not getting paid. If you have incorporated in some form or another it's definitely illegal. Be very, very careful.
Your best (only?) option to have your own company sponsor you is an O1 visa.
What is a fair compensation package for a non-technical "second" employee for a web start-up?
He's been working on a part-time basis for the last couple months as he finishes his last semester of grad school. This guy has already shown that he'd be an exceptional asset from a non-technical (web design, brand positioning, social marketing, PR, etc)perspective which is fine because I can focus on the technical side.
Tricky part is that, though he can first exhaust his OPT time (12 months) post graduation (May 2010), he would eventually need an H1B Visa to stay in the US to work. He offered to pay all H1B processing fees.
The main caveat for sponsoring an H1B is that you have to pay market salary. This startup has been self-funded so far so I can't pay much though he may be fine with a title that warrants $30k or so. We would probably generate our first $ in 2-3 months. A couple investors have offered to provide some funding which may be an option.
Should I pursue this seemingly awesome non-techie second employee even with the H1B hangup? What would be a fair package in terms of H1B sponsorship, salary, equity, benefits? Thanks in advance for your time.
A co-owner can be sponsored for an H1-B. I have seen it done. But you have all the normal H1-B issues e.g., prevailing wage. Also the word from immigration lawyers is to expect it to be much harder for small startups to get H1-Bs for any of their employees this year ... very bad news.
Another side issue (not challenging your comment) is that it's very difficult to get an H-1B to work at a company that the applicant owns a big chunk of. So a founder wouldn't be able to get an H-1B at their own startup. However, they can be on the payroll at a company they own during their OPT, and it's conceivable to be acquired within the new 29 month period.
as a former founder, I can tell you that much that you cannot work for the company you founded on an H1B visa. You can found the company, but not be employed by it. You will need another visa like the O1 or E2 investor visa.
For an H1B you need to be fireable, i.e. have a board of directors that can fire you as a CEO. Otherwise USCIS will argue that you started the company to get yourself an H1b visa
I was in a similar situation. H1B with a big company, left to start a company with an American co-founder who applied for the H1 transfer (which isn't subject to a cap).
Email me and I can hopefully give you some insight. Email address is on my site.
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.
Absolutely. Startups are in no different position than established companies: you just need to demonstrate that there's enough money to pay the H-1B salary and run the company and enough work for the H-1B employee to do over the life of the H-1B validity period.
hey peter,
Am living in the US (BayArea) on H1-B and my Green Card has just started - literally just started by submitting the documents via the employer's attorneys.
If I want to start my start up, what are my options ? As a single founder ? As a co founder ? Should I be employed in my own company giving myself salary ? And is starting a company while on H1B even possible ?
This works if you are three co-founders each with 33%, since any two of you could fire the third. (I am also not a lawyer, but this is how I got my H-1B five years ago.)
That said, the fact that the H-1B process is now a lottery - i.e. no matter qualified you are or how good your lawyer is, it's still a roll of the dice - makes it hard to recommend if you actually want any ability to plan for the future.
H-1B also puts more scrutiny on the company, so you'll probably need to have raised money (so you can prove you can pay yourself a market rate salary), have an office, etc.
Thanks for the response. Yes, there are other options that aren't subject to the crazy and uncertain H-1B lottery such as the O-1 visa (which, without knowing more, you both probably would qualify for). And while the O-1 is tied to a company, this can be your company. A lot of founders in the U.S. are on O-1s. There is also the intra-company transferee visa (if you are transferring to a related company in the U.S.) and the E-2 visa if you are looking to start a company in the U.S. based on a substantial investment.
IANAL, but I don't see any legal possibilities here. As long as he is on US soil, he can't work for any company other than the H1B sponsor. I've never heard of H1B "co-sponsorship"; it's usually a one-to-one relationship. The only way I see is to fully transfer the H1B to the startup.
Depending on which country he's from and how much money he brings to the table, an E2 visa might be an option. He would have to own at least 50% of the company though.
There's no option to freelance while on an H-1B visa and the options to work for another entity concurrently - that is, to get paid by another entity - are very limited and self-employment is generally prohibited. That being said, preliminary steps to create a business or to volunteer for a non-profit are allowed.
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