An H-1B worker may be able to own an LLC, but ownership does not by itself authorize operating the business or working for customers. State business formation, tax classification, and federal immigration work permission answer different questions. A passive investment and providing the company’s day-to-day services are not the same activity. [1]
Rules that determine the answer
The H-1B modernization rule effective in 2025 expressly recognizes qualifying beneficiary-owner petitions. Where the beneficiary has a controlling interest, the initial petition and first extension are generally limited to eighteen months each under the specified rule. The business must still offer a bona fide specialty-occupation position and satisfy the other H-1B requirements; creating an entity does not automatically produce approval. [2]
Under the new owner rule, controlling interest includes more than fifty percent ownership or majority voting rights as defined in the regulation. The beneficiary generally must perform specialty-occupation duties a majority of the time; the rule is not an unlimited exception for running any small business. [1] H-1B employment is otherwise tied to the authorized petition and its conditions. [2] Calling work unpaid does not automatically make it permissible, and receiving profits does not automatically prove that prohibited work occurred. Keep records that accurately distinguish capital ownership, distributions, and actual services, and obtain any needed authorization before beginning the latter.
What to do next
- Describe the actual activities proposed, including sales, management, client work, administration, and investment decisions.
- Separate permitted ownership from work requiring an approved petition or other authorization.
- If the LLC will sponsor H-1B employment, evaluate the specialty occupation, LCA, wages, location, cap status, and beneficiary-owner provisions.
- Have tax and state-law requirements reviewed separately; an EIN, business license, or filed return is not immigration work permission.
Practical example
An employee buys an interest in a company while another authorized manager runs it. That is different from the employee personally developing its product, negotiating client projects, and delivering services without authorization for that employment.
For related situations, see changing H-1B employers and SEC broker-dealer registration requirements.
Primary sources
- DHS: Final H-1B modernization and beneficiary-owner rule
- 8 CFR 214.2: H-1B classification and petition conditions
Sources checked: October 31, 2026.