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[USA Business] [Add Topic]
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Foreigner Starting A Business In USA
This page is dedicated to folks who are foreigners but still ambitious enough to startup a business in USA. These questions and answers are just for reference only and should not be treated as legal advice.
1. What permissions do I need from USCIS to start my own business?
The simple answer is: None. As you know, USCIS is very concerned about immigrants working without proper authorization. However, USCIS does not regulate how immigrants invest or purchase things in the United States. Immigrants are free to buy cars, buy houses, and invest in the stock market; starting a business is no different. Starting your own business is an investment, not employment. Therefore, you will not require USCIS permission to start a business.
2. Can I work for my business if I don’t have a work authorization?
This is complicated. Since entrepreneurship and employment are closely related, immigrants who start their own businesses need to be very careful to limit their activities to the management of and investment in the business, and not "work for" the business like a typical employee who would need USCIS permission. Thus, though you can start, register and own your own business, you cannot work for the company and earn a salary without a work authorization and an I-9 for your position. However, if you simply manage your business like an investment, there is no need for any work authorization.
3. Can I start a business if I am working on an H1-B or have an EAD with another employer?
Remember that H1-B and EAD work authorizations are employer-specific. New full-time jobs require new authorizations. However, this does not prevent you from starting and managing your own company. As you build your side business, just be careful not to ignore your work hour obligations to your current employer.
4. Can I start a company if I am a student, or the spouse of a student?
F-1 students cannot work outside the Curricular Practical Training and Optional Practical Training systems. Spouses of F-1 students also need a separate work authorization to work. However, nothing prevents F-1 students or their spouses from starting and managing their own companies and earning money through profit distributions. Again, you just need to be careful not to draw a salary from your work.
5. If I invest in something, can I occasionally help my employees with their work?
This is a tricky question. Investing in a small business, like a McDonald's franchise, and earning profits from it does not require a work authorization. However, if you go to the shop location and help out your employees from time to time, as most small business owners do, then a USCIS officer might cry foul. However, once again, so long as you are not paid for your work, you are not in violation of your status.
This situation shows how registering a company for your business, like a C-corporation or an LLC, rather than operating as a sole proprietor, is a good idea. Registering a company will provide documentation showing that you are the owner and manager of the company, and not an employee. Such documentation can refute accusations that you are 'working' for your company. Moreover, business structures can provide important limited liability and other advantages to entrepreneurs.
6. Can I register a company if I don’t have a green card?
There is no restriction on who can register a company in the United States. It doesn't matter where you are from, or where you claim citizenship, or whether or not you have a green card. However, you will need a Registered Agent in the jurisdiction where you register the business. This is someone with a regular address in the jurisdiction who can accept process on behalf of your company. If you don’t live in the jurisdiction and can’t serve as your own registered agent, then there are many companies you can hire who will serve as a registered agent for you.
7. Can I register a company in one state even though my driver’s license is from another?
Again, there is no restriction on who can register a company in any particular location. For example, a resident of California is free to register a company in New York. However, you must be careful about where your company is doing business. You will likely need to register your business as a 'foreign' business in any jurisdiction outside your local jurisdiction where business occurs. Thus, it is always best to register your company where it does the most business, no matter where your residence or drivers license is from.
8. I'm planning to start an online business - where should I register?
A lot of modern start-up businesses are e-businesses that 'do business' almost exclusively on the Internet or through smart phones. Since the Internet is not located in any specific place, it can be difficult to judge where these companies are doing business. The safe route is for e-entrepreneurs simply to register their business in their local jurisdiction. If the e-business ever grows to require traditional 'brick and mortar'
infrastructure, at that time you can consider whether or not business is taking place in other jurisdictions.
9. Can starting my own business help me get my green card faster?
The EB-5 visa program enables entrepreneurs who create jobs in America to get green cards for themselves and their family. The adjudications are much faster than other employment-based avenues. If your small business becomes successful and results in retained earnings of $1,000,000 (or $500,000 in some cases), and you have created 10 full-time jobs for Americans, you can use your business as a new basis for your I-485 and get your provisional green card faster.
P.S.
This article is about how to open a company in USA or the process of opening a company.
More on how does a foreigner open an LLC in the US, please see Foreigner LLC in USA
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posted by Jian
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| 1# visitor 2010-10-06 06:59 |
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As a foreigner in USA, I was looking for a way to open up a business there. Thanks for your info, very helpful!
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| 2# visitor 2011-02-03 17:56 |
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Very useful Q&A.
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| 3# visitor 2011-02-13 18:37 |
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That's the most useful info I ever found for a foreigner to start a business in USA. Thanks for your expertise and generosity!
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| 4# visitor 2011-02-20 17:58 |
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"The safe route is for e-entrepreneurs simply to register their business in their local jurisdiction. "
Can I ask how to find a local jurisdiction?
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| 5# visitor 2011-03-08 18:00 |
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Thanks a lot.
A question:
If i start my own LLC, can my LLC sponsor me to get an O-1 Visa? It's just that i want to start an LLC but i would be the only employee.
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| 6# visitor 2011-08-03 03:38 |
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#5 "so long as you are not paid for your work, you are not in violation of your status." what is the definition of "not paid"? What if you are a passive investor? Say you are one of the owners and you get paid with dividends, instead of salary?
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| 7# Jian 2011-08-03 04:59 |
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Federal immigration law does allow someone present in the U.S. with a non-immigrant visa, such as a J or B visa, to serve as a manager of a LLC. However it does not permit that person to receive a salary from or be employed by the LLC.
So even if you work without getting paid, you will still be violating the immigration law. If you own the business and you are working in your company without salary but your work will generate revenue which will come back to you in the form of dividends, you will still be in trouble.
To be on the safer side, it is recommended to file for an investor visa (E-2).
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| 8# visitor 2011-08-14 12:16 |
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Can a foreign medical doctor (who has obtained proper state medical licensure in a U.S. state) lawfully open a business/practice in that state and therefore lawfully practice medicine as a clinician (not just a manager), without taking a salary - and therefore only take corporate profits from the business/practice?
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| 9# Jian 2011-08-14 19:48 |
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I am not quite sure but I think this falls into the gray area.
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| 10# Lotta 2011-08-19 00:38 |
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I live in NYC and have a spouse visa, my husband has a O-1 visa. I do not have the right to work here.
I would like to start an e-commerce comapany with an American friend. I do not need to draw a salary, but at some stage in the future, I may like to receive dividend should the company be very profitable. What is the best approach to achieve this legally whilst I still live in the US? Do I need an (E-2) from day one, or can this application wait till a later date? What happens if we sell the company for a significant profit whilst I still reside here?
Many thanks,
Lotta
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| 11# Andy 2011-08-20 00:04 |
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Great Q&A. Helped me a lot understand the issues with forming LLC and working while on a h1b visa. thanks.
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| 12# Jian 2011-08-20 22:41 |
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@Lotta,
Starting an eCommerce company itself would take quite sometime to get it off the ground and be profitable. So I think probably by the time your company is profitable, you already got green card through your husband.
My suggestion is to just do it, no need to apply for E2 visa.
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| 13# lotta 2011-08-21 00:53 |
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Thanks for you kind reply. The business will have other aspects than just e-commerce, so is likely to take off fairly quickly... if it doesn't we will close it down.
It is not our intention to apply for a green card. If I still own part of the business, I will run it from London.
Is there a way to receive dividend whilst still living here? Can I sell the company or a share in the company whilst living here, say to a Venture Capitalist investor?
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| 14# Jian 2011-08-21 20:14 |
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@Lotta,
Non-resident alien can take a "passive" role in a business (forming the LLC for example) but not "work" for it. There is a subtle boundary between "passive activities" and "work".
Passive activities and roles are:
-being a shareholder
-being a director or board member
These roles don't actually run the business, they just oversee the business, such as approving resolutions, electing officers.
Active activities and roles are:
-being an officer
-being an employee
-being an independent contractor
-do any work for the business
Note an officer runs the business directly so is actively involved in "working" for the business.
So in light of that, I think dividend is fine as it is passive income. But again I am not an immigration lawyer so this is just for your reference only. Best.
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| 15# Lotta 2011-08-22 10:43 |
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Thanks. This is such a tricky area.
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| 16# Carmen 2011-08-23 10:26 |
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Can I open an S corporation or an LLC if i live in another country and I do not have a Social Security ?
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| 17# Jian 2011-08-23 22:28 |
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@Carmen,
You can form a business in USA even if you live in another country. To do that, you need to hire an agent to setup your "C" corporation or LLC. The "S" corporation is not available to foreign corporate owners.
You don't need a social security number, but the officer you appointed to control/manage/direct the company, must have a social security number.
Also your company will be required to obtain an Employer's I.D. (EIN) from the Internal revenue Service (IRS) since it must pay taxes it earns.
These are my understandings, not to be used for legal advice ;-)
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| 18# Fernando 2011-08-27 22:25 |
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Thanks for the information, very useful.I am currelty living in Texas with an H4 visa. The business I am trying to start basicaly consists in importing a product and looking for Points of Sales using a consignment sales strategy.
Is it legal that I personaly pursue my Points of Sale ? Or would I need to employ someone to do it?
Technically, I would not be selling products, I would be negotiating with other companies for them to sell my imported products.......
Thanks in advance
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| 19# Jian 2011-08-30 12:27 |
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@Fernando,
With H4 visa, you can not work in the US. But you can still look for business opportunities/potential buyers with the consignment sales.
I guess as long as you are not getting paid here, you are not technically "working" in the USA.
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| 20# ML 2011-09-07 09:43 |
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For #4, "However, nothing prevents F-1 students or their spouses from starting and managing their own companies and earning money through profit distributions."
Please give an example.
Thanks.
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| 21# ML 2011-09-07 22:18 |
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Can a F-1 resident alien student open an eBay store to sell items? If yes, does he/she need to register the store in State and County? Also, is it a good idea for him/her to register this e-store as LLC?
Please advise. Thanks.
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| 22# Jian 2011-09-08 00:40 |
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@ML,
F1 student status can not work in USA. If you sell personal items, it is ok though. My understanding is that there is a limit as for what counts as "personal".
Tax-wise, if you earn above certain dollar amount for the year, I think you will get 1099 tax form at the end of the year from eBay. So, you end up having to do tax return with that income.
The IRS doesn't track down legal status IMHO, but the USCIS might take that record and consider it as a business.
As for LLC, you can register for sure but the daily operation has to be done by someone else who has legal status to work.
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| 23# ML 2011-09-08 23:13 |
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Hi Jian,
Thank you for your reply.
Can this LLC under my name? After register a LLC, can someone else operate it in oversea? There will be no payrolls. The only thing I need to do is to pay and file tax return in US. Is this workable?
I have been searching the web and found this:
"F-1 students cannot work outside the Curricular Practical Training and Optional Practical Training systems. Spouses of F-1 students also need a separate work authorization to work. However, nothing prevents F-1 students or their spouses from starting and managing their own companies and earning money through profit distributions. Again, you just need to be careful not to draw a salary from your work."
Is this post true that a F-1 can earn money through profit?
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| 24# ML 2011-09-08 23:16 |
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Hi Jian,
Sorry, let me rewrite my questions.
Can this LLC under a F-1 resident student name and have someone else in oversea to operate it?
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| 25# Jian 2011-09-13 13:01 |
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@ML,
I think it should be just fine to register the LLC under your name. Profit from the LLC is passive income and shouldn't be counted as a result of your work for the LLC. However I think you will need proof that someone else is running the business instead of you. Take care.
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| 26# ML 2011-09-14 07:03 |
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@ Jian,
Thank you! Same to you too.
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| 27# twinzz 2011-09-26 10:29 |
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we are looking to start a business (b&b) in the CA area but are still at the early stages of actually opening the business. Now the q&a you posted at the beginning is already helpful but we have a few questions (we as for now have little insight in American business law). We have however taken the liberty of taking a look at the CALGOLD website for permits
- If we open up a business in the states, we understand that we don't need a GreenCard in order to have it function as a company. and that we can make executive actions for te company but not actually employ ourselves there. Does that mean that we have to live on our savings until we actually get a worker visa or how do CA regulation go on that
- which would be the actual workers visa we'd need in order to actually pay ourselves a wage? There are so many different visas that we can't really find our way through the different ones out there
thanks!
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| 28# Zhang 2011-09-29 00:29 |
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Hello Jian,
Thanks a lot for your helpful instructions. I am a F-1 student and my wife holds a F-2 visa. After I start an internet-sale LLC in US, if I do not hire any employees and just ask my wife (or someone else who does not have a working permission either) to operate the sales as an volunteer, would it be legal?
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| 29# Jian 2011-09-30 13:34 |
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@twinzz,
To answer your questions...
-Taking salary/income from the business is a big no-no I think. So living on your savings is better approach.
-To get paid, you are pretty much looking at a H1B type of work visa. It is hard to justify work visa if you are a small/one-man shop, but I heard there are successful cases recently.
Example, a guy started up a one-man company doing computer design and applied for H1B for himself. Got rejected initially by USCIS, but after appealing to the Administrative Appeals Office (AAO) with documents showing that he got real customers and enough work for himself to do for at least 3 years, he got approved for H1B. In this case, the AAO mentioned that self-employed foreigner can get H1B as long as it is a real business and the person works in his professional field, i.e., computer design.
Anyhow, the approval didn't come without some legal hassle.
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| 30# Jian 2011-09-30 13:45 |
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@Zhang,
It is hard to justify a legit business with just owners and volunteers. You might think about hiring contractors who have work permit in the USA to operate online sales for you.
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| 31# Joxa toni 2011-10-07 11:09 |
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I am on an O1 visa as a photographer, and I am entering a partnership for the launch of a clothing label. Because I am on my O1 visa as a photographer I will be doing all the photoshoots and productions for the label, since I am authorized to work in the US as a photographer obviously I am acting as an independent contractor offering my services to my company and getting paid for them.
Is this a grey area or one thing excludes the other in this specific case? Thanks you!
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| 32# Jian 2011-10-11 23:29 |
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@Joxa,
O1 visa typically requires you to have a US employer or agent to file a petition on your behalf. It doesn't permit pure self-employment.
If you have a partnership in the USA, your company may be able to file a petition for you. However, if you are just a freelancer, I would think it is not easy to get approved. The more established the company is, i.e., with some employees in the US, clients and on-going work, the easier for the company to be your sponsor for O1.
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| 33# Angelic 2011-10-13 04:54 |
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Hi Jian,
thank you for all the helpful information. I have a question, hope you can help me out.
We are currently living in Germany. My husband received a very goog job offer from a US company. I assume, he will get a H1 visa when he accepts this offer and I won't be able to get a work permit through him.
My husband and I have been working on an internet-business which is ready to launch in couple of months. If we will incorporate an LLC in the US, we both won't be allowed to work for this LLC.
Do we have to hire a Manager in order to run the business or would a simple employee with low salary work as well?
To hire someone, can we wait until company makes profit? By then, I will work without getting salary.
Thanks!
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| 34# SP Singh 2011-10-14 07:48 |
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Hi Jan,
Can F-1 Student open a LLC in US with foreign partner or without foreign partner ? Is there going to be any legal issue for F-1 student to be a member of LLC in USA ? Can you guide me ?
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| 35# SP Singh 2011-10-14 07:53 |
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Hi Jan,
One more thing i want to know. What documents i need to show that its legal to open LLC as f-1 student to government.
Regards
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| 36# @pepper 2011-10-15 14:43 |
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Hello,
I'm from the filmmaking world and I am just out of a grad school waiting for my EAD. I plan to do freelance works on film shoots and I just opened up my own llc as a single member.
So I wanted to ask: Would it be okay if they hire (aka "loan-out") my llc and I work for my llc with no salary expectations until I get my EAD?
I know that I can't personally get salary without getting my work permit but can my llc make profits through the freelance jobs that I will be doing as its manager?
Thank you!
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| 37# Jing 2011-10-17 14:59 |
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Hello Jian,
Thanks for your helpful site. I want to open a business in US to market my invention, either by selling my patent or license it out for royalties. I may have to work on my further inventions to apply more patent for the company. I lived in US before but not reside there anymore. After reading you post, sounds like I can do the former but for the latter (further inventions), I have to do it outside of US? Beside, if I want to go to US, what kind of visa is best for my case? B-1 or E-2? Thanks!
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| 38# SP Singh 2011-10-19 11:07 |
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Hi Jan,
I am waiting from couples of days. Can you help me ? I greatly appreciate your efforts.
Thanks,
SP Singh
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| 39# Jian 2011-11-06 23:36 |
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@Singh,
Sorry for late response, but I've been sick and busy with work these days. For your question, first, I don't see any problem for F1 student to open an LLC in US, either with or without foreign partner. Second, as for documents for opening an LLC, you can follow the instruction on LegalZoom.com at Legal Documents to Form an LLC.
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| 40# Jian 2011-11-06 23:40 |
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@pepper,
I'd say if you could let them hold off the payment until you get the EAD, that will be better.
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| 41# Jian 2011-11-07 00:06 |
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@Jing,
It seems to me that if you want to work on future inventions, you have to be outside of the US. As for visa requirement, E2 visa allows you to work, but for B1, you can not work in the US.
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| 42# Jian 2011-11-07 00:30 |
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@Angelic,
You don't need to hire a manager to run the business, an employee is fine. Since you are going to run an Internet business, you can wait until your company is profitable and then hire an employee. Before that, just don't take any salary.
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