Can a H1B visa holder be a founder/partner of a company?


Myself and two other partners are planning to start a C-Corporation. One of the partners is on H1B visa sponsored by his employer and he is getting a W2 from them. We have few questions:

  1. Can a person on H1B Visa with a W2 be a founder/Owner of a C-Corporation
  2. If answer is no to # 1, then what are his options. Is there such thing as passive investor? And how can we allocate him share of the company as a passive investor?
  3. If he becomes a passive investor, does that mean he has to buy his part of the shares? And if we sell him share at lower value (example: 1cent per share) does that lower the valuation of our company?
  4. Are there any tax liabilities in case we have to close the C-Corporation?

Visa Legal

asked Jun 9 '11 at 05:29
11 points
Get up to $750K in working capital to finance your business: Clarify Capital Business Loans

3 Answers


Visa's give permission to be in a country and can enable someone to work. They do not impact if someone owns something or not. So he can own but he might not be able to work for this company. (Would need to read the visa and get an attorney's oppinion.) When he is in his own country though he can work and own (save for countries that are being embargoed like Iran).

Valuation would be decreased if he gets shares at a discounted price.

For question 4 not following for whom would there be tax liabilities that you are asking about?

answered Jun 9 '11 at 10:47
John Bogrand
2,210 points
  • This answer is essentially correct. An H1-B holder can be a passive owner, but absolutely cannot work on the company. Be very careful, because the stakes are high. The part about the share price being different sounds strange to me, not sure what the original post had in mind. – Alain Raynaud 13 years ago
  • John/Alain,Thanks for your responses. Basically we want this person to be a working partner/founder but looks like his visa status will not allow him to do that. So his options are limited to be a passive investor. Sometime this year we need to raise funding, so I'm not sure at what price should we sell H1B visa partner his shares so it does not devalue our company. Also, we have not registered the company yet, any suggestions on what the intial stock price should be and how many # of shares we should start off with? – Gagan 13 years ago


With newer explanation from USCIS it may be possible to work for the company and be a shareholder ith it. read the link below

Q12: The memorandum provides an example of when a beneficiary, who is
the sole owner of the petitioning company or organization, would not
establish a valid employer-employee relationship. Are there any
examples of when a beneficiary, who is the sole owner of the
petitioning company or organization, may be able to establish a valid
employer-employee relationship?

A12. Yes. In footnotes 9 and 10 of the memorandum, USCIS indicates
that while a corporation may be a separate legal entity from its
stockholders or sole owner, it may be difficult for that corporation
to establish the requisite employer-employee relationship for purposes
of an H-1B petition. However, if the facts show that the petitioner
has the right to control the beneficiary’s employment, then a valid
employer-employee relationship may be established. For example, if the
petitioner provides evidence that there is a separate Board of
Directors which has the ability to hire, fire, pay, supervise or
otherwise control the beneficiary’s employment, the petitioner may be
able to establish an employer-employee relationship with the

answered Apr 25 '12 at 04:15
1 point


The H-1B holder can be a founder / owner of another company.

If he wants to work for the other company, he may be able to obtain a concurrent H-1B visa if there is a valid employment relationship. Please see Can I Get an H-1B Visa Working for My Own Company?.

Disclaimer: This information does not constitute legal advice and does not establish an attorney-client relationship.

answered Apr 26 '12 at 01:48
Dana Shultz
6,015 points

Your Answer

  • Bold
  • Italic
  • • Bullets
  • 1. Numbers
  • Quote
Not the answer you're looking for? Ask your own question or browse other questions in these topics:

Visa Legal