Starting a business in the United States as an immigrant is both exciting and complex. Whether you’re a foreign entrepreneur, recent green card holder, or visa holder with a business plan, understanding the legal framework is essential.
This guide offers legal tips for immigrants starting a business in the U.S. in 2025, including visa options, entity selection, compliance, and more.
1. Can Immigrants Start a Business in the U.S.?
Yes. There is no citizenship requirement to start a business in the United States. Even non-residents and undocumented immigrants can register companies. However, your legal immigration status will determine whether you can actively work for or be employed by your business.
2. Choose the Right Visa Type
Your ability to own and operate a business depends largely on your visa type.
| Visa Type | Can Start a Business? | Can Work in It? |
|---|---|---|
| B-1/B-2 (Tourist) | Yes (passive ownership only) | No |
| F-1 (Student) | Maybe (limited via CPT/OPT) | No (without authorization) |
| H-1B | Yes (with restrictions) | Only for sponsoring employer |
| L-1 | Yes | Yes (for the petitioning company) |
| E-2 / EB-5 | Yes | Yes |
| Green Card | Yes | Yes |
Tip: If you’re on a visa that doesn’t allow work, consider bringing on a U.S. citizen or green card holder as a co-founder.
3. Choose the Right Business Structure
Common legal structures include:
- Sole Proprietorship: Simple but limited to individuals with SSNs
- LLC (Limited Liability Company): Most flexible and popular choice
- Corporation (C-Corp or S-Corp): Best for startups seeking venture capital or foreign investment
Foreign entrepreneurs often choose LLCs or C-Corps for liability protection and ease of U.S. market entry.
4. Register Your Business
Steps to register:
- Choose a state to incorporate in (popular options: Delaware, Wyoming, your home state)
- Register with the Secretary of State (articles of incorporation or organization)
- Obtain an EIN (Employer Identification Number) from the IRS
- Open a business bank account
- Comply with local business licenses and permits
5. Understand Work Authorization Limits
Even if you register and fund a business, you cannot work for your own company unless your immigration status allows it.
For example:
- Tourists (B-1/B-2) can attend meetings or negotiate deals but cannot engage in day-to-day operations.
- F-1 students may only work via CPT or OPT, and typically not for their own business.
- H-1B holders can’t be self-employed but may own equity with no operational involvement.
6. Visa Options for Business Owners
If you want to actively run your business, consider:
- E-2 Visa (if your country has a treaty with the U.S.): Requires substantial investment
- L-1 Visa: Transfer from a foreign company to a new or existing U.S. branch
- EB-5 Visa: Invest $800,000–$1,050,000 and create 10+ jobs
- O-1 Visa: For entrepreneurs with extraordinary ability
These visa types allow you to own, manage, and work in your U.S. company.
7. Tax and Reporting Obligations
Immigrant-owned businesses must:
- File federal and state tax returns
- Report foreign ownership (Form 5472 if applicable)
- Pay estimated quarterly taxes (if self-employed)
- Report employment taxes (if you hire workers)
Consult a CPA familiar with international tax compliance.
8. Banking and Financing as an Immigrant
You’ll need:
- An EIN
- U.S. mailing address
- A valid ID (passport, visa)
Some banks may require a Social Security Number (SSN), but many fintech platforms offer business banking alternatives.
If seeking funding:
- Angel investors and VCs prefer Delaware C-Corps
- Have a clean cap table and clear immigration work authorization
9. Hiring as an Immigrant Founder
To hire employees, you must:
- Register with your state’s Department of Labor
- File for an EIN (if not already done)
- Carry workers’ compensation insurance
- Verify employee eligibility using Form I-9
Be aware of I-9 compliance and anti-discrimination laws when hiring.
10. Common Mistakes to Avoid
- Violating your visa terms by working without authorization
- Failing to maintain proper immigration status
- Ignoring tax obligations or business licenses
- Using the wrong entity structure for your goals
- Not separating personal and business finances
Immigrants contribute significantly to U.S. entrepreneurship — but success starts with understanding your legal rights and limits. From choosing the right visa to filing taxes, every decision has implications for your status, business, and long-term plans.
Consulting an immigration attorney and business attorney is highly recommended before launching any venture.
