Category: Immigration

Timothy B. Lee reported on arstechnica.com about a radical solution to the problem of entrepreneurial immigration: anchoring a converted cruise ship 12 miles off the coast of Silicon Valley, and using it as a floating business incubator for entrepreneurs who cannot get H1B or E1/E2 visas for their proposed startup.

Now, most countries would be falling over themselves trying to attract bright, ambitious and gifted entrepreneurs to their shores, bringing with them innovative new technologies and, perhaps more importantly these days, jobs and revenue.

We’re in the USA, though, and there is always somebody ready to complain about a change. While it is straightforward to set up a US company as a non-resident, pretty much everyone knows that the US immigration system is broken. This creates a situation where an entrepreneur can create a company for which he or she cannot legally work. Unfortunately, it is politically difficult for anyone to propose a comprehensive solution that satisfies enough voters to get approved. Instead, we have a series of failed attempts at reform.

The Blueseed project is a truly visionary idea, and the fact that it has been proposed and thought out this far demonstrates how broken this system really is. Would there really be enough masochistic entrepreneurs willing to be stranded on a cruise ship for perhaps months at a time, just to have a shot at getting their startup funded?

There may be a hidden upside this project, though, that is not mentioned in the article: this is a way to work in Silicon Valley without being a resident of the State of California, and perhaps also for the entrepreneurs to remain non-US residents as well. The tax angle could well be an incentive that makes the life at sea much more bearable, at least for the short term.

We receive inquiries every day from would-be entrepreneurs who would love to be able to come to the US, start a business and hire Americans, but are unable to do so because of the immigration law logjam. Hopefully, some kind of Blueseed project will succeed and expand to operations off the shores of Boston and New York, the next-largest entrepreneurial centers in the US. Just imagine how quickly, if these tax-free centers of entrepreneurship succeed, the states start pushing to allow these entrepreneurs to work inside their boundaries where they can be taxed, and provide jobs for the residents as well.

What do you think? Is this solution better than nothing?

Can an H1B holder start a business and work for it in the US?
According to an article in the Washington Post, under revised rules issued by the US Customs and Immigration Service (CIS), H1B holders may now be able to not only start a new US business, but also able to work for it. This recent development is very good news for the 1,000,000+ professionals and specialized labor visitors in the US who would like to start a business (read: create jobs for Americans) but under previous CIS interpretation of the law were not allowed to do so.

Are you on an H1B and looking to start a business? Contact us through our no-obligation free incorporation consultation page or call us at +1 212 239 5050. With over 28 years of experience helping non-US residents set up companies in the US, we have the expertise and support network to help you get started quickly and easily. Learn more about the process of starting a US company as a non-US resident.

There’s a lot of confusion among H1B holders about whether they can open a business on the side while working full time for their sponsor. In fact the rules are clear: your H1B visa is ONLY good for employment by your sponsor.

This doesn’t mean you cannot open your new business while working here on an H1B: there are no restrictions on incorporating the business, getting the tax number, opening the bank account, hiring staff and other business investment activity. The restriction is that you are not allowed to hire yourself, unless your business successfully applies for a second H1B for you. Failure to get the proper second H1B leaves you in the unenviable position of not only working without proper authorization but also having hired an unauthorized person, thus putting your own company at risk of penalty as well as yourself.

The solutions to this dilemma are:
1. Create your company as a C Corporation or Limited Liabilty Company (LLC), and apply for an H1B for yourself. You may find this to be surprisingly difficult to do; the rules are very strict. Learn more about setting up a US company as a non-resident here.
2. If you are from certain countries, you may be able to apply for a Treaty Investor (E-2) visa that functions like an L-1 visa, without the requirement for a pre-existing foreign parent/sibling company. The E-2 Treaty Investor visa requires a substantial investment in a U.S. business which must be controlled by treaty nationals. The E visa can be extended indefinitely as long as there is a need for the investor to direct and control the U.S. enterprise. Essential employee’s are expected to be replaced by U.S. trained personnel. Learn more about the E-1 and E-2 Visas here.
3. Hire a manager and staff to run your company. As an investor you are restricted in your ability to manage the company on a day to day business (basically, you CANNOT manage your company on a day to day basis) but at least you can guide your company a bit and get it going.
Whichever option you pick, you must consult a attorney skilled in US immigration law. There are many traps for the unwary, and strict penalties for violating the laws. We recommend that you contact Harvey Shapiro, Esq. our immigration specialist, for legal help with your immigration.