International Students: Llc Membership Eligibility Explained

International students in the US often wonder if they can start a business while they are still studying. There is no law that prevents a student with an F-1 or J-1 visa in legal valid non-immigrant student status from starting their own business. However, there are several factors to consider, including visa restrictions, remuneration, and the need for a lawyer to navigate the legalities.

International students on an F-1 visa can form an LLC

While there is no specific law prohibiting an F-1 student from forming an LLC, the ability to generate income from the business is a complex issue. The company cannot pay the student a salary or wage, as this would violate immigration laws. However, the company can declare dividends or profits, but distributing these to the student may be considered impermissible income. To navigate this, some students choose to repatriate profits to an overseas dollarized bank account in the company's name and then disburse funds for living expenses.

It's important to note that the student cannot be an active member in the day-to-day operations of the LLC. Their involvement is limited to passive ownership, similar to purchasing shares in a company. To ensure compliance with visa regulations, it is advisable to consult with immigration counsel or a lawyer specializing in immigration law.

Additionally, F-1 students can explore the option of transitioning to an E-2 investor visa, which allows individuals to focus on developing and directing their business and earning an income from it. This path has been successfully navigated by many international students aiming to pursue their entrepreneurial ventures in the United States.

International students cannot be active members of the LLC

International students can form an LLC, but they cannot be active members of the LLC. While there is no law that prevents an international student from starting a business, there are underlying restrictions that must be observed. International students on an F-1 visa are generally allowed to start an LLC, but they are limited to passive involvement and cannot receive a salary or wage from the company. This is because F-1 visas only allow for very passive involvement in the company and on-campus employment, curricular practical training, and optional practical training.

To form an LLC, international students must file an Articles of Organization document with the Secretary of State in the desired state. This document includes the name of the LLC, its purpose, the name and address of the registered agent, and the management structure. They will also need to obtain an Employer Identification Number (EIN) from the IRS after the LLC has been formed. Additionally, international students should consult with an immigration attorney to ensure compliance with immigration laws and to understand the specific restrictions that apply to their situation.

It is important to note that the law is murky when it comes to the ability of international students to start a business in the United States. While they can form an LLC, they cannot be actively involved in the day-to-day operations of the company. This means that they cannot operate the business themselves and must entrust the operations to someone else. International students must also maintain their student status and not receive any remuneration or salary from the company. Any profits made by the company must be repatriated to an overseas dollarized bank account in the name of the company, not the individual.

In conclusion, while international students can form an LLC, they cannot be active members of the LLC due to visa restrictions and immigration laws. They must seek legal advice to ensure they are complying with all relevant laws and restrictions.

International students cannot receive a salary or wage from the LLC

International students on an F-1 visa can form an LLC, but they cannot receive a salary or wage from the LLC. This is because payment of a wage signifies employment, which is prohibited under immigration law unless the student is permitted to accept.

The student must remain in valid student status, registered as a full-time student, or be between semesters. To avoid violating their student visa, they can set up the LLC as a subsidiary of an overseas company. For example, if the student's family has a business in another country, that company could hold the majority of the shares in the US company or be a member of the US company if it is an LLC. The student could also set up the LLC as a single-member LLC, but they would still not be able to receive a salary or wage from the company.

The student could also consider repatriate any profits to an overseas dollarized bank account in the name of the company, not in the individual's name. This way, the company could then disburse money from that account as it sees fit, including for the student's living expenses in the United States. However, there is an open question as to whether the disbursement of such dividends or profits to the student might constitute impermissible income under the immigration act. Therefore, it is essential to consult with an immigration attorney to ensure compliance with all applicable laws and regulations.

In summary, while international students can form an LLC, they cannot receive a salary or wage from the company directly. There are alternative options for handling profits and expenses, but these options should be carefully navigated with legal guidance to maintain compliance with immigration laws and regulations.

International students can be the sole member of a single-member LLC

International students can set up a business in the United States. There is no specific law or regulation that prevents an international student with a valid F-1 or J-1 visa from starting their own business. However, they must maintain their student status by being enrolled as a full-time student or be between semesters.

It is important to note that while international students can form an LLC, they may not be able to receive remuneration or a salary from the company. The company can declare dividends or profits, but disbursing these to the student may constitute impermissible income under the immigration act. To navigate this, the student could potentially repatriate any profits to an overseas dollarized bank account in the company's name. The company could then disburse money from this account to the student for living expenses.

Additionally, while international students can legally own the company, they cannot be an active member or operate it daily. This means they can only have passive ownership of the company.

International students should consult an immigration lawyer for advice

International students on an F-1 visa can form an LLC, but the law is unclear on whether they can be an active member of the company. While there is no specific law or regulation preventing an international student from starting a business, they must maintain their student status and cannot be paid a salary or wage by the company. The law is complex and the consequences of non-compliance can be severe, so it is highly recommended that international students consult an immigration lawyer for advice.

Immigration lawyers can provide expert guidance on the complex legal issues surrounding international students and business ownership. They can help students understand their rights and obligations, including the restrictions on remuneration and the requirement to maintain student status. An immigration lawyer can also advise on the specific rules and regulations that apply to LLCs and ensure that students comply with all necessary legal requirements. This can include helping students obtain the necessary certificates and registrations, such as a certificate of incorporation and a federal employer identification number.

By consulting an immigration lawyer, international students can gain clarity on their options for business ownership and ensure that they do not inadvertently violate any immigration laws. Lawyers can provide tailored advice based on each student's unique circumstances, including their visa status and country of origin. They can also assist with other immigration-related matters, such as visa applications and adjustments of status, providing comprehensive support throughout the student's time in the United States.

It is important for international students to be cautious when seeking legal advice. While there are many authorized legal service providers, such as attorneys and EOIR-accredited representatives, there are also individuals and businesses that may offer immigration advice without being authorized to do so. Students should be wary of "notarios," notary publics, immigration consultants, and businesses, as they may not be qualified to provide accurate and reliable legal guidance. Instead, students should seek out reputable immigration lawyers, such as those listed by the American Bar Association or the DOJ, to ensure they receive accurate and up-to-date advice.

Frequently asked questions