Can H-1B Visa Holders Own an LLC in the USA?

Can H-1B visa holders own an LLC is a question we hear every week, and the answer is yes. An H-1B holder can create, own, and finance an LLC. An H-1B holder cannot work for the LLC in any capacity unless the LLC files an H-1B petition for that individual or the individual has a different form of work authorization.

We file LLCs like this every month. The trouble starts after the filing. Your H-1B petition authorizes employment with the company named in the H-1B petition. Therefore, an LLC that you own becomes an unauthorized employment issue the first time you respond to a customer email or sign a contract with a vendor. Below is what you are allowed to do, where the line is drawn, what it costs, and how to set up the LLC with a paper trail to support you.

What Can an H-1B Holder Do With an LLC?

An H-1B holder can do plenty with an LLC as long as they act like an owner, not an operator. An H-1B holder can:

• Have a legal agent file Articles of Organization to establish the LLC, and hold 100% of the membership interests
• Get an EIN and open a business bank account
• Capital contributions and distributions
• A sale of the company requires the consent of the members
• New members can be admitted
• Major business decisions also require member consent

This isn’t employment. The clearest cases are passive, i.e., an LLC that owns a rental property with a property manager, a stake in a friend’s startup, or an eCommerce business owned by an entrepreneur and run by an employed team.

Where Does Owning an LLC Turn Into Unauthorized Work?

Owning a business becomes unauthorized employment when the business starts serving customers. USCIS evaluates employment based on economic activity, not ownership. Writing computer code, signing contracts with clients, running online ads, and answering customer support emails are all unauthorized employment. Weekends and evenings also count.

There’s a gray area for things like creating a business plan, meeting with investors, and hiring lawyers and accountants. While you can plan a business and meet with investors as a shareholder, you can’t legally open your doors to customers or let them know your business exists. Nor can you hire employees or do any of the other things required to conduct business, like marketing and selling.

We are continually asked about the CEO title. A title on a state record won’t hurt you. Acting on it will. If USCIS has a green card case on you and asks what you did for the LLC, and your answer and records don’t match, you’ll have a problem.

How Should You Structure the LLC?

Form it manager-managed and appoint a manager. A member-managed LLC means that, by default, all members manage the LLC, which is the reverse of what you want. Operating agreements can allocate management rights and delegate authority to co-members, employees, or spouses with an H-4 EAD. Authorized spouses can work for any employer and can operate the business.

Paperwork should show that the owner side and operator side are completely separated. For the operator side, you’ll want a delegate, management votes, and a registered agent service.

Immigration law allows ownership, but employment contracts can be very restrictive. Employment agreements can limit the types of outside activities you can engage in; conflict-of-interest and invention-assignment clauses can trip you up. The best way to keep your LLC separate from your employer is to keep your employer’s equipment, time, and confidential information out of the LLC. Your LLC and your job should be kept completely separate.

How Do You Form an LLC on an H-1B Visa?

1. Choose a state. If you register a Delaware or Wyoming LLC and run it from California, you’ll pay two sets of fees. Many H-1B holders do better forming at home.
2. Check the name and appoint a registered agent.
3. Articles of Organization. Ask your service provider or lawyer to sign as Organizer, so your name stays off the filing.
4. Execute a manager-managed Operating Agreement.
5. EIN. You can apply for an EIN for free from the IRS using SS-4. Be the responsible party and list yourself with your SSN and the number issued in the same session.
6. Bank account. Setup takes a few days once the EIN, Articles, and Operating Agreement are in place.
7. Annual reports.

State fees as of October 2026

Can Your LLC Sponsor Your H-1B?

Yes, as long as it’s a legitimate employer. The company files the petition as a change of employer or a concurrent H-1B. USCIS adjudicators will be looking for an actual specialty occupation job, evidence of the LCA, an ability to pay the wage, and the company’s operational elements (a lease, bank records, contracts, a business plan, etc.).

If you own or control more than 50% of the company, the initial and first extension approvals of your H-1B are capped at 18 months, and you must devote the majority of your time to the specialty occupation.

H-1B government fees as of October 2026

Government fees (effective Oct. 2026) for an employer with 25 or fewer employees are a $460 base filing fee for the I-129, $750 for the ACWIA, $500 fraud fee, and a $300 asylum program fee, for a total of $2,010. Premium processing costs an additional $2,965. The $215 fee for the initial registration applies only if you’ve never been counted against the H-1B cap.

A $100,000 proclamation fee is imposed on new petitions for aliens who are seeking H-1B status and are outside the U.S. and require consular processing. This has been recently extended to Sept. 21, 2027. Current guidance is that people who are in the U.S. on H-1B status are outside the proclamation. Hire an attorney to confirm this before filing.

Don’t start working for the LLC until your lawyer confirms your H-1B portability and filing date. Working before your filing is unauthorized employment, and filing afterward doesn’t fix it.

If the H-1B doesn’t work, try the other visas: O-1, E-2, L-1, EB-2 National Interest Waiver, and International Entrepreneur Parole.

What Taxes, BOI Rules, and Annual Filings Apply to an H-1B Holder’s LLC?

The vast majority of H-1B holders are considered resident aliens for tax purposes under the substantial presence test. That means the single-member LLC reports passive rental income on Schedule E of your Form 1040 and active business income on Schedule C, for which you would also be required to pay the 15.3% self-employment tax. When an immigration officer sees a Schedule C from an LLC you are not supposed to work for, it raises questions. 

One edge case: If you are a nonresident alien for tax purposes in your arrival year, a single-member LLC is a foreign-owned disregarded entity and, in addition to a pro forma Form 1120, Form 5472 must be filed every year. The penalty for failing to file it is $25,000.

FinCEN’s August 2026 final rule exempts US-formed companies, meaning, for the time being, no BOI filing is required. State annual reports are still required. Miss them, and the state can administratively dissolve the LLC. Our annual compliance team tracks those dates, and a bookkeeping service keeps distributions documented and business money separated from your personal funds.

What Happens if You Leave the US or Close the LLC?

Leaving the US or losing H-1B status does not mean you also lose the LLC, though your tax residency would shift, and you would report as a nonresident for US tax purposes, at which point the LLC for Nonresidents rules would apply. You would need to amend the Operating Agreement and update the state records in order to gift the LLC.

Closing the LLC means you would file a Certificate of Cancellation (or your state’s equivalent), along with your final return and state fees. We cover LLC company dissolution when the books are clean.

What Kind of Mistakes Do H-1B Founders Normally Make?

• Working for free. Free work is still work.
• Not removing member-managed defaults. It gives you de facto management authority.
• Paying for services. Distributions are ownership returns. Payments for services are not.
• Signing for the company. Attend investor and accelerator meetings as a shareholder; do not commit the company.
• Believing foreign companies are always exempt. Working for it from the US is still work.
• Not disclosing a material fact. If you have already participated, cease, create a timeline, and see an immigration attorney.

FAQs About H-1B Holders Owning an LLC

Can an H-1B holder own 100% of an LLC?

Yes, ownership and employment are separate. The restriction is on the work you do.

Can I be the manager or CEO?

Not unless the LLC sponsors you. While you can hold the titles, enacting them is the risk.

Can I take profits out?

Taking a distribution as an owner is allowed. Taking a wage or fees for your own service is not.

Can my H-4 spouse run it?

Yes, with a valid H-4 EAD.

Do I have to tell my employer?

It depends on what your employment agreement says. Many require disclosing outside business interests.

Can I keep the LLC if my H-1B ends?

Yes, the LLC can exist separately from your visa. How the LLC is taxed changes.