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How do you monetize your side-project while you are on your F1 or H1B visa?

International workers/students (on F1, H1B visa) who started side-projects with the quarantine-time and canceled internship time, how are you collecting payments when you cannot register a business?

Options I have found:

Legal: Incorporate in your home country and use someone like paddle.com to collect payments in a bank account there

Questionable: Incorporate here and hire employees outside US "to do work" and only be able to use the funds to reinvest /pay yourself dividends as an equity owner

Objectionable: Incorporate here, use Stripe for payments and hope nobody tells the USCIS

Questionable: Get a US-citizen friend to incorporate. The business will be in their name and they would have to Venmo you profits

I've spent >4 hours reading legal blogs and going through comment sections and obscure USCIS documents to understand this much. If somebody else has done this more seamlessly, then please let me know.

I looked up Unshackled Ventures, a VC firm that focuses only on H1B and F1 visa holder startups but as I said, this is a side project and not a startup. If wildly successful, this will generate a few million and not the billions that VC firms are looking for. Hence, that avenue is closed.

Any help is appreciated. Thank you!

  1. 2

    Not legal advice, by when I did my research a few years ago, my understanding was this:

    It's ok to incorporate companies in the US or get dividends from the company as an alien.

    The limitation is you CAN'T WORK for your own company unless you have a working visa for this company.

    The definition of "work" is kind of a gray area.
    If you work on it for 4 hours every week for 6 months, that's considered consistent work.
    If you spend 20 hours to handle some logistics of it this week, but not again in 3 months, you can argue it's not consistent work.

    Again, please verify if this is still the current regulation as it may have changed.

    1. 1

      Thanks ! The most recent guidance on this is - You can incorporate, get a bank account and hire employees but you CANNOT work. You should remove yourself from active day-to-day management. You can invest in it as a passive means of income like you would with a 401K.

  2. 1

    Hi @takezo, what did you end up doing? Would love to know this as i am dying to start by side gig! :)

  3. 1

    Hey @takezo, I am also having the same issue. Would be great to happen how you ended up solving it. I tried to dm you on twitter but it wasn't available

    1. 1

      Hello @emr19, That's odd ! My DMs are open.

      Here is what I told someone who reached out last week:

      If you are going to work on it fulltime, there are ways to work on it while you are in the US. It involves lawyers, finding an American cofounder and about $5,000 in fees.

      If you incorp in your home country, the general advice, even if you were in home country, is to set it up in someone else's name, preferably someone retired. This is to ensure that in the future when you/other person apply for a new job, this company doesn't show up as secondary employment in the background verification processes which most companies use these days.

      I am not a lawyer but incorp under someone else's name and running it is still not legal while you are in the US since you are still under your visa while you are within the borders of US. However, I had lots of friends from South America and China in college who were running their business in their home country while on an F1 visa. So, you chose what you want to do :)

      1. 1

        Hey @takezo, reached out to you over Twitter some time ago but you might have missed it.

        Could you please expand on your first point "If you are going to work on it fulltime, there are ways to work on it while you are in the US. It involves lawyers, finding an American cofounder and about $5,000 in fees"?

        Thanks again!

        1. 1

          Hello Amber, I sent you a DM on twitter and a connection request on LinkedIn. Are you available for a conversation?

  4. 1

    Hey @takezo - Thanks for starting this thread, I am finding myself in the same boat, and have spent countless hours trying to decipher what's possible and what's not.

    • Someone in the thread pointed out that you can start an LLC, hire someone else to "work" in it - but wouldn't the act of hiring qualify as active involvement in the LLC (hence violating H1B) ?

    • In your post you say that incorporating in your home country and collecting payments using Paddle is Legal, but if you incorporate it in your name, then wouldn't it violate H1B because your work in a foriegn company (your own company) is directly provable ? Or are you saying that you incorporate the company under someone else's name (your father for eg) in your home country ? (by far this is the only route that makes sense to me)

    1. 1

      If you are going to work on it fulltime, there are ways to work on it while you are in the US. It involves lawyers, finding an American cofounder and about $5,000 in fees.

      If you incorp in your home country, the general advice, even if you were in home country, is to set it up in someone else's name, preferrably someone retired. This is to ensure that in the future when you/other person apply for a new job, this company doesn't show up as secondary employment in your background verification which most companies use these days.

      I am not a lawyer but incorp under someone else's name and running it is still not legal while you are in the US since you are still under your visa while you are within the borders of US. However, I had lots of friends from South America and China in college who were running their business in their home country while on an F1 visa. So, you chose what you want to do :)

  5. 1

    Hey @takezo, curious -- what did you end up doing here? I'm also in the same boat.

    1. 1

      Sending you a DM on Twitter

  6. 1

    Hey @takezo, I'm running into something similar on a TN visa. Would love to DM you if you're open to it? Tried on your Twitter but the option isn't available.

    1. 1

      Hello Steph, I sent you a DM on Twitter. I can tell you what I've come across there :)

  7. 1

    Hi! I'm in a similar boat with you. I'm on an F-1 Visa with STEM OPT and naive enough to think I can I just plaster stripe to my side project and call it a day.

    Which option did you end up choosing? How is incorporating in home country legal?

    I'm tempted to just launch my side project for free or better yet make it open source.

    1. 1

      I wish we could DM.

      If you don't want to monetize your side-project, then you are fine. It in no way affects your visa status since it is not another source of income. It can be classified as a 'hobby' if it came to that.

      However, if you want to monetize it. Then you should have no ties to the business. Incorporating it in your home country would insulate it being linked to your American SSN or any other details.

      Put another way, incorporate it in your Mom/Dad/Brother's name and then get a bank account in your home country. Find a payment gateway in your homecountry that can collect payments from the US (if Stripe doesnt serve your home country) and link that to the home country bank account.

  8. 1

    Obligatory: I am not a lawyer and this is not legal advice.

    I am a Canadian, so I am not sure if this is applicable, but you likely don't need to incorporate at all. You can operate as a sole proprietorship which is not too dissimilar to being an independent contractor. You treat all earnings as your personal income minus expenses. This is fine if you're a one-person operation.

    If you need a USD debit account (e.g. for Stripe), you can set up one through https://transferwise.com/ and then transfer it to your home bank.

    1. 1

      Stupid question. If you do that in your home country but you live in US, won't your guest country pissed off that you're doing work in the guest country but pay the taxes in home country?

      1. 1

        This is definitely not a long-term solution (and you should always talk to a professional). It is plausible that you can go the host country as a student (which the OP seems to be) and have some source of income back home (especially given how expensive international tuition can be). If you can set up shop legally in your host country, it's always better to do so.

    2. 1

      I am reading this as:

      • Set a sole proprietorship in my home country
      • Set up a USD debit account with transferwise using my home country Know-Your-Customer documents

      Is this your suggestion? Because if I link my American ID like SSN or any other document anywhere, it is apparently a violation of my visa. Technically, me doing anything in the US for-profit outside of my work is a violation of my visa according an immigration lawyer😐

      1. 1

        Yeah, it would be to be completely separate from your activity in the US. Your taxation would be in your home country for example. The idea is to be above board somewhere. Realistically, you should disregard my suggestion and just listen to professionals haha

        1. 1

          Haha ! No. I agree ! It has to be above board. Incorporating in my home country is the last option. The only issue for me there is one of my ideas is a platform with pay in and pay out solutions. So not having a US based bank account will be bad for margins because of the cross-border exchange fee.

          I want to investigate Transferwise a bit more and see if that can help solve for the USD based debit account. Thanks a lot :)

          1. 1

            I'm not hip to your idea, but "pay in and pay out solutions" sounds like it puts you in money transmitter territory, which will be rife with regulation and life-destroying consequences for screwing it up.

            Move with extreme caution.

            Get professional legal advice, and if the fees for that feel too steep, stay away from the idea.

            1. 1

              Interesting! I didn't realize that. I assumed working with Transferwise since they have the licenses should be straightforward. But thanks, I will talk to other people who have a marketplace startup/sideproject to get more clarity. I appreciate it :)

          2. 1

            Personally, I have a USD-based debit account with them! So it'll probably work if your home country is supported

            1. 1

              Thanks ! Will definitely check them out. You've been very helpful :)

  9. 1

    Could you use Stripe Atlas to incorporate as if you were in your home country?

    1. 1

      The one lawyer that I spoke to said that there still would be legal ramifications if I used Stripe Atlas. I should probably ask someone at Stripe if they've seen this in the past.

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