Non-US Citizens and Owning a Business
In the United States, ownership of a business, including Limited Liability Companies (LLCs) and corporations, is not restricted to U.S. citizens. Individuals who are non-U.S. citizens are eligible to own these types of businesses. However, this broad permission comes with specific considerations and restrictions, particularly concerning the type of corporation and the owner's visa status. Let’s take a closer look.
Business Structures and Ownership
C Corporations and S Corporations: Non-U.S. citizens can form and own businesses structured as C corporations without restrictions. However, S corporations are an exception, as all shareholders must be U.S. citizens or resident aliens. Therefore, non-U.S. citizens are precluded from holding shares in S corporations.
Limited Liability Company (LLC): Similar to C corporations, there are no citizenship requirements for owning an LLC.
Visa Status and Business Ownership
The U.S. does not impose general restrictions on business ownership based on the owner's visa status. This means individuals on non-immigrant visas, such as student, work, or tourist visas, can form an LLC or a corporation. Nonetheless, specific visa conditions can significantly impact the ability to open or operate a business:
Ownership vs. Employment: While non-U.S. citizens can own a business, actively working in it or receiving a salary might be restricted under certain visa types without appropriate work authorization. For example, student (F-1) visa holders are generally barred from employment without obtaining the necessary authorization.
Visa Conditions and Employment: Certain visas have conditions that may affect the ability to engage in business. H-1B visa holders, for instance, can own a business, but their primary employment must comply with their H-1B status requirements. They cannot work for their own business unless an independent H-1B petition has been approved for that specific employment.
Administrative Requirements
Employer Identification Number (EIN) and Individual Taxpayer Identification Number (ITIN): To start a business in the U.S., an Employer Identification Number (EIN) is required from the Internal Revenue Service (IRS). For those without a Social Security Number (SSN), obtaining an Individual Taxpayer Identification Number (ITIN) may be necessary to apply for an EIN.
Visa Type | Description | Can Work in the U.S. for Money? |
B-1/B-2 Visitor Visas | For business or tourism visits. | No |
F-1 Student Visa | For academic students. | Yes, with restrictions (On-campus work; CPT and OPT off-campus after certain criteria are met). |
M-1 Student Visa | For vocational or nonacademic students. | Yes, post-study practical training only. |
J-1 Exchange Visitor Visa | For exchange visitors participating in programs that promote cultural exchange. | Yes, within program guidelines. |
H-1B Specialty Occupations Visa | For workers in specialty occupations requiring a higher education degree. | Yes |
H-2A Temporary Agricultural Worker Visa | For temporary agricultural workers. | Yes |
H-2B Temporary Non-Agricultural Worker Visa | For temporary non-agricultural workers. | Yes |
L-1 Intracompany Transferee Visa | For intracompany transferees who work in managerial positions or have specialized knowledge. | Yes |
O-1 Visa | For individuals with extraordinary ability in sciences, arts, education, business, or athletics. | Yes |
P Visas | For athletes, artists, and entertainers. | Yes |
R-1 Religious Worker Visa | For individuals working in a religious capacity. | Yes |
K-1 Fiancé(e) Visa | For the foreign-citizen fiancé(e) of a U.S. citizen. | No, until a work permit is obtained after marriage. |
Family-Based Immigrant Visas | For family members of U.S. citizens and permanent residents. | Yes, upon receiving permanent residency. |
Employment-Based Immigrant Visas | For workers immigrating based on employment skills. | Yes |
Diversity Immigrant Visa Program | For immigrants from countries with low rates of immigration to the U.S. | Yes |
A-1/A-2 Visas for Diplomats and Foreign Government Officials | For diplomats and foreign government officials. | No, only in official capacities. |
G Visas and NATO Visas | For employees of international organizations and NATO. | No, only in official capacities. |
If you need legal advice about what type of business entity you may or should form or own, please do not hesitate to contact the experienced attorneys at Thakur Law Firm, APC who can hep you navigate the often-complex legal framework and assist you through the tedious process of starting a business. Learn more at https://www.thakurlawfirm.com/
