Can H1B Holders Own Equity or Start a Business in the US?

Yes, an H1B visa holder can start a business or own equity in a U.S.-based startup, but there are strict limitations on their involvement due to the terms of the H1B visa. Here's a detailed explanation:

Ownership of Equity

H1B visa holders are permitted to own equity in a U.S.-based business. They can invest in a startup or own shares in a company, similar to any other investor. There are no restrictions on the amount or percentage of equity an H1B holder can own in a business.

Active Involvement

H1B holders cannot actively manage or work for the business they own unless the business sponsors their H1B visa or they hold an additional visa type permitting such activity. The H1B visa ties the holder to their sponsoring employer. Any work, including management or operational roles in the business, is considered unauthorized employment if done outside their primary H1B job.

Starting a Business

H1B holders can establish a company (e.g., as a founder) but cannot actively participate in its operations unless sponsored by the business under a new H1B or other appropriate visa. The business must operate independently, with other individuals or employees handling day-to-day management and decision-making.

Legal Considerations

The business must comply with U.S. laws, including tax regulations and employment authorization requirements. If the business wishes to sponsor the H1B holder, it must meet standard requirements, such as demonstrating the ability to pay the required wage.

Conclusion

H1B visa holders can own equity in a U.S. business or be a passive investor but cannot engage in active employment or management of the business unless authorized through sponsorship or another visa type. Consulting an attorney specializing in immigration and business law is recommended to ensure compliance with all regulations.