You Must Have Work Authorization to Run Your Business in the U.S.

If you are planning on operating your own business in the U.S. there is some important information you should know about work authorization. 

Starting a business in the U.S. and running that business in the U.S. requires work authorization.  Running your business in the U.S. without the appropriate work authorization can lead to major immigration consequences. 

In this guide, we will explain the various activities that require work authorization and we will also explain some visa options which allow someone to run their business in the U.S.

Starting a Business, Owning a Business, and Operating a Business

To get started, there are three important concepts that I’d like to first explain 

Setting-Up a Business

Setting up a business includes the following tasks:

• Forming a company, corporation, or Limited Liability Company (LLC)
• Setting up your business bank account
• Buying or leasing office space, warehouses, and other premises for the business.
• Other tasks related to the creation of a new business.  

Owning a business

Ownership refers to your interest or stake in a business. 

You can become the owner of a business in the US by:

• Starting a new business
• Buying an existing business
• Purchasing shares of an existing business

Managing and Operating a Business

Managing or operating a business involves:

• Hiring or firing of employees
• Managing day-to-day operations of the business. 
• Running the business.
• Managing staff and actively supervising them. 
• Etc.

Work Authorization Requirement

You must have work authorization to manage and/or operate your business in the U.S.

You don’t necessarily need work authorization to start a business in the U.S. or to own a U.S. business. In many cases you can do this from outside of the U.S. or you may potentially be able to enter the U.S. as a visitor to complete certain tasks. 

However, you cannot manage and/or operate a business without proper work authorization. This is a mandatory requirement and ignoring this may lead to serious immigration consequences.

Options to Manage and Operate a Business in the U.S.

If your goal is to open a busines in the U.S. and to operate that business, here are three options to consider. 

E2 Visa

The E2 visa is a great option for investors and entrepreneurs looking to operate their busines in the U.S. The basic idea of an E2 visa is that it allows an investor or entrepreneur to invest in a U.S. business, and based on making that investment, they can live in the U.S. and operate their business.

Here are some general E2 visa requirements:

• Must make a “substantial investment” in the U.S. business (we typically recommend $100,000 but investments for less than that have gotten approved).
• You must be a citizen of a country that has an E2 treaty with the U.S. (here is a list of countries that qualify) 
• Your investment funds be at risk (this means that the funds should be committed/spent)

E2 Visa Benefits

-The E2 visa is a great option for investors and entrepreneurs because it allows them to actively operate their business in the U.S. 

-The E2 visa can be renewed as long as the E2 visa requirements continue to be met.

-The spouse of an E2 visa holder can also apply for work authorization

-Children of an E2 visa holder (under 21 years old) can attend school in the U.S.

L1 Visa

The L1 visa is also a great visa option for investors and entrepreneurs. The basic idea of the L1 visa is that it allows a foreign company to transfer a manager, executive, or specialized knowledge worker, to a related U.S. company. 

If the U.S. company is brand new, there is a special type of L1 visa called the L1 “new office” which allows the transferred employee to establish and build up the U.S. company if it is within its first year of operations in the U.S.

Here are some general L1 visa requirements:

• The L1 visa beneficiary must have worked for the foreign company for 1 year continuously, full-time, within the last 3-year period
• L1 visa beneficiary must have worked in a managerial, executive, or specialized knowledge capacity for the foreign company
• L1 visa beneficiary must be coming to the U.S. to work as a manager, executive, or specialized knowledge worker
• Foreign company and US company must have a “qualifying relationship” (parent/subsidiary, branch office, affiliates)

EB-5 Visa

The EB-5 visa is a great option for investors and entrepreneurs. This visa option is similar to the E2 visa mentioned above, however, the EB-5 visa is an immigrant visa and so it leads to a green card (lawful permanent residence). 

The basic idea of the EB-5 visa is that it requires that someone invest in a U.S. business and to create jobs for U.S. workers. In exchange for the investment and the job creation, which benefits the U.S. economy, the investor is eligible for a green card for themselves, their spouse, and their unmarried children under 21 years old.

Through the EB-5 visa, the EB-5 investor can get a green card (lawful permanent residence) which would allow them to live in the U.S. and run their business.

Here are some of the general EB-5 visa requirements:

-Must invest either $900,000 or $1,800,000 in a U.S. business (depending on whether the business is located in a Targeted Employment Area)

• Your investment must lead to the creation of 10 full-time jobs for U.S. workers

• Your investment funds must have been obtained lawfully

• Your investment funds must be “at risk” 

You should now have a much better understanding of the general concept of work authorization. In addition, you should now have a better understanding of the E2 visa, the L1 visa, and the EB-5 visa.

If you have any questions about any of this information, or if you’d like to speak to our team, you may call us directly at  +1-818-741-1117 or you may schedule a free consultation by clicking this link.