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I have a business idea and go to school in the US. I am wondering if I tell my trusted friend my idea and he opens the business under his name (he is a US citizen) and I invest 50 percent of capital into the business. How can he pay me ? Dividends? I understand that in order for it to be passive income I cannot take part in any business actions. But I have read that dividends and investments count as passive income which does not require a work visa?

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*Disclaimer: I am a tax accountant , but I am not your professional accountant or advocate (unless you have been in my office and signed a contract). This communication is not intended as tax advice, and no tax accountant / client relationship results. *Please consult your own tax accountant for tax advise.**

A foreign citizen may form a limited liability company. In contrast, all profit distributions (called dividends) made by a C corporation are subject to double taxation. (Under US tax law, a nonresident alien may own shares in a C corporation, but may not own any shares in an S corporation.) For this reason, many foreign citizens form a limited liability company (LLC) instead of a C corporation

A foreign citizen may be a corporate officer and/or director, but may not work/take part in any business decisions in the United States or receive a salary or compensation for services provided in the United States unless the foreign citizen has a work permit (either a green card or a special visa) issued by the United States.

Basically, you should be looking at benefiting only from dividends/pass-through income but not salaries or compensations.

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You don't need a visa to invest in US equity. You don't need a visa to profit from US equity.

There may be other legal considerations, but they aren't visa related, hope that helps

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The real question you're asking is how you can work for your business.

You cannot. Whether your "friend" pays you or not is entirely irrelevant.

Claiming your work-related earnings as interest/dividend will make it also a tax fraud, in addition to the immigration violation (i.e.: not only deportation but also potentially jail time).

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