A Comprehensive Guide for International Students in the US to Become Entrepreneurs

Ever dreamt of turning your brilliant idea into a thriving business? The US is a fantastic launchpad for aspiring entrepreneurs, including international students like you! This guide is your one-stop shop for navigating the exciting yet sometimes confusing world of starting your own business in the States.

We’ll explain everything you need to know, from visa options to legal hurdles. We’ll also show you how to tap into the vibrant US entrepreneurial ecosystem and get the support you need to turn your vision into reality. 

Whether you’re a coding whiz with a revolutionary app idea or a food enthusiast with a secret family recipe, this guide will equip you to take that first step.

But before we dive in, let’s address the elephant in the room โ€” visas. Don’t worry. We’ll explain the visa options available to entrepreneurs and guide you through the application process. 

We’ll also explore alternative pathways, like finding a US citizen co-founder, to help you navigate the legalities.

So, buckle up and prepare to embark on your entrepreneurial journey in the land of opportunity! Let’s turn your dream business idea into a thriving reality!

Can International Students Form a Business?

Can International Students Form a Business

Absolutely! The good news is that you can legally form a business entity like a Limited Liability Company (LLC) as an international student in the US. 

There are, however, a few factors to keep in mind regarding visas and how actively you can participate in running the business.

Visa Regulations

F-1 Visa

This is the most common visa for international students.

It allows you to set up a business structure, open a bank account, and participate in tasks that aren’t considered employment (like planning and marketing). However, you can’t actively work for the business without employment authorization.

H-1B Visa

This visa is for specialty occupations and allows full-time work for your company.

It is for foreign nationals with a Bachelor’s Degree (or an equivalent foreign degree) who are coming to the US to perform services in a specialty occupation. However, obtaining an H-1B can be competitive, so explore other options first.

You can also skip the H-1B hassle if you’re from a country with a special treaty of commerce and navigation with the US. In such a case, the E-2 visa might be a better fit.

This visa lets you run your own business based on an investment you make in your company. Just remember, it’s only for folks from those treaty countries.

Step-By-Step Guide to Form an LLC as an International Student

Here are the simplified steps to starting your LLC in the US as an international student (it’s the same process for everyone!):

1. Choose Your Business Name:

Make sure it’s available and complies with state naming regulations.

2. Appoint a Registered Agent:

This person or service receives legal documents on behalf of your LLC.

3. File Your Articles of Organization:

This document is filed with your state’s Secretary of State, who formally establishes your LLC.

4. Obtain an Employer Identification Number (EIN):

Your business’s tax ID number is obtained from the IRS.

5. Open a Business Bank Account:

Keep your business finances separate from your personal accounts.

Pro Tip! While you can’t directly work for your LLC on an F-1 visa, consider finding a US citizen co-founder to handle daily operations. There are also services like doola that can help you form your LLC in 5 minutes and navigate the legalities of the formation.

Remember, this guide provides a general overview. Always consult with an immigration advisory like Boundless for personalized advice on your specific situation.

Raising Capital as an International Student Entrepreneur

Raising Capital as an International Student Entrepreneur

So, you’ve got a great business idea and need funding. Here’s the deal โ€” international students can face some hurdles when raising capital:

โญ• Visa restrictions: Remember your F-1 visa limitations? You can’t directly use the funds to pay yourself a salary.

โญ• Limited credit history: Building trust with investors can be challenging without a long US credit history.

โญ• Less familiarity: Investors might be less familiar with international backgrounds and require extra convincing.

Yes, funding your business idea as an international student entrepreneur can be challenging, but there are solutions to every problem! While your F-1 visa restricts using funds for personal income, there are creative approaches.

For starters, bootstrapping โ€” get scrappy, use your savings, or offer pre-sales to generate initial capital. Look for grants and competitions specifically designed for international student founders. Research what your university and government programs can offer.

Angel investors, wealthy individuals who back early-stage ventures, might also be a good fit. They can appreciate the fresh perspective you bring as an international student. Crowdfunding platforms like Kickstarter or GoFundMe allow you to raise capital from a broad online audience.

And while you’re out raising capital, remember that legal compliance is crucial. Ensure your fundraising methods align with US securities laws and your visa regulations. 

We recommend consulting an attorney to prevent any roadblocks. Finally, structure your funding so it fuels business development, not your personal finances.

By being upfront about your visa limitations and how you’ll use the capital, you can showcase the unique value you bring and the potential of your business idea. Trust us, with a solid plan and the right resources, securing funding for your dream business idea is achievable!

Compensation From Your Business

Compensation From Your Business

So, you’ve launched your business, and it’s taking off! But how do you get paid for your hard work as an international student on an F-1 visa? 

F-1 visas come with limitations on earning income directly from your business. But there are still ways to reward yourself for your entrepreneurial spirit while staying compliant.

First, understand the limitations of your F-1 visa. You can’t directly pay yourself a salary or wage from the business. Writing a paycheck or taking cash out of the register is a no-go.

However, some alternative methods of compensation that work within the visa framework are:

Owner’s Draw:

This is a set amount of money you take from the business profits to cover living expenses. It’s not a salary but a way to reimburse yourself for personal needs. The key here is to be reasonable. Don’t take out more than you actually need, and ensure the business can still cover its operational costs.

Profit Sharing:

Once your business is established and generating consistent profits, you can consider profit sharing. This means setting aside a percentage of the net profits (money left after expenses) to be distributed to yourself, potentially other founders, and even employees (if you have them). This approach emphasizes rewarding success and incentivizes everyone towards growth.

Regardless of your chosen method, it’s crucial to maintain clear and accurate financial records. This includes documenting the owner’s draws and profit distributions. A solid paper trail demonstrates responsible business practices and helps avoid any issues with visa regulations.

Thinking Outside the Box

For some student entrepreneurs, the limitations of the F-1 visa might lead them to explore alternative options. Here are two possibilities, but remember, these require careful consideration and professional advice:

H-1B Visa:

This visa allows for specialized occupations and full-time work, including working for your company. However, obtaining an H-1B can be competitive and requires employer sponsorship.

Co-founder with US Citizenship:

Finding a US citizen co-founder can be a strategic move. They could handle day-to-day operations and receive a salary while you focus on the bigger picture. This approach allows you to participate in the business but doesn’t directly violate your F-1 visa limitations.

Remember, this guide just provides a general overview. Consult with an immigration attorney for personalized advice on the best compensation strategy for your specific situation and visa. 

By understanding the rules and exploring different solutions, you can ensure you’re rewarded for your entrepreneurial efforts while staying compliant with US regulations.

Operating a Business from Your Home Country

Operating a Business from Your Home Country

Picture this: your US-based business is thriving, and you’re considering returning home. But can you still run your venture remotely? Yes, absolutely! 

With the right strategies and a focus on compliance, you can manage your business from afar and keep it growing strong. Here’s what you need to consider:

Remote Management

The cornerstone of successful remote management is cultivating a strong, dependable team. Here’s how to achieve that: First, consider hiring virtual assistants (VAs). VAs can tackle administrative tasks, customer service inquiries, and even social media management. This frees you up to focus on the bigger picture โ€” strategizing for your business’s growth. 

Technology is also your friend. Utilize project management tools, communication platforms, and cloud-based software to keep everyone connected and ensure projects stay on track. 

Don’t underestimate the power of regular check-ins. Maintaining clear communication with your team through video calls and online meetings fosters collaboration and keeps everyone aligned toward the same goals.

Staying Compliant Across Borders

Running a US business from abroad does add a layer of legal complexity. Here’s how to stay compliant:

๐Ÿ‡บ๐Ÿ‡ธ Business Entity: Ensure your LLC or other business structure remains registered in the US state where you established it.

๐Ÿ‡บ๐Ÿ‡ธ Registered Agent: Maintain a registered agent service in the US to receive legal documents on your company’s behalf.

๐Ÿ‡บ๐Ÿ‡ธ Tax Filing: You’ll still be responsible for filing US federal and state taxes, even if you’re not physically present in the US. Don’t underestimate the importance of this!

Understanding Your Tax Obligations

As an international student entrepreneur with a US business, you’ll need to navigate tax filing requirements in both the US and potentially your home country. Here’s a simplified breakdown: 

On the US side of things, your business will likely file federal income tax and state income tax, depending on the state where it’s registered. There’s also the possibility of self-employment taxes if you take owner’s draws to cover your living expenses. But that’s not all.

You might also owe taxes on your business profits in your home country. Consulting a tax advisor in that country is crucial to understanding the specific regulations and filing requirements there.

Ensuring US Tax Compliance

Navigating US tax laws can be tricky, so seeking professional help is highly recommended. A qualified US tax advisor can be your guide. They help you understand your filing obligations, determine the exact tax forms you need, and ensure you’re taking advantage of all available deductions and credits. This can save you a significant amount of money come tax season. 

We strongly recommend filing electronically to streamline the filing process and minimize errors. It’s faster, more efficient, and reduces the risk of paperwork headaches.

But navigating US tax compliance from abroad doesn’t have to be an overwhelming solo mission. Here’s where doola can step in. 

Our Total Compliance Package offers a comprehensive suite of services designed for international entrepreneurs like yourself. It includes everything from LLC formation and registered agent services, tax filing assistance, and ongoing compliance monitoring. 

By taking advantage of doola’s expertise, you can save valuable time, money, and a lot of stress, allowing you to focus on what matters most โ€” running and growing your business!

Staying Informed

US tax laws and regulations aren’t static, so staying informed is vital. The IRS website is a valuable resource, providing tax law updates and helpful guides for international businesses. Bookmark it and check back periodically. 

Additionally, doola can be your partner in keeping you abreast of changes. We stay current on US tax regulations and can proactively inform you of any updates that might impact your business.

By embracing remote management strategies, staying compliant with US regulations, and seeking professional help, you can successfully operate your US business from anywhere in the world.

Don’t forget to utilize the resources available online and within your university community. Many universities offer support programs specifically for student entrepreneurs. Network with other international student founders, connect with mentors, and tap into the entrepreneurial spirit surrounding you.

Remember, a little planning and the right support system can make all the difference in turning your entrepreneurial dreams into a reality.

Starting a US Business Has Never Been Easier

When to Choose doola

So there you have it! This guide has equipped you with the knowledge and resources to navigate the exciting yet sometimes complex world of starting your own business in the US as an international student. 

We’ve explored visa options, legal considerations, funding strategies, and even managing your business remotely. While the journey might have its challenges, the potential rewards are immense. You have the chance to create a successful venture that makes a difference. Don’t let visa limitations or unfamiliar territory hold you back. 

With careful planning, the right support system, and determination, you can overcome any obstacle. Speaking of support systems โ€” Boundless is a trusted immigration advisory service dedicated to helping international entrepreneurs achieve their American dream. 

Boundless specializes in assisting international founders secure EB-1 and EB-2 Green Cards, along with O-1 and L-1 visas. Their team of experienced immigration attorneys can guide you through the visa application process and increase your chances of success.

Now is the time to unleash your inner entrepreneur! Take the first step today. Research your business idea thoroughly, draft a solid business plan, and explore funding options. Remember, doola can be your partner throughout the process โ€” LLC formation, registered agent services, and tax filing assistance

With doola by your side, you can ensure your business is legally compliant and free to focus on what matters most โ€” making your entrepreneurial vision a reality.

The road to success may have twists and turns. Still, with the knowledge, resources, and unwavering determination, you’re well on your way to becoming an international student entrepreneur in the US. 

So, what are you waiting for? Start building your American dream today!

doola's website is for general information purposes only and doesn't provide official law or tax advice. For tax or legal advice we are happy to connect you to a professional in our network! Please see our terms and privacy policy. Thank you and please don't hesitate to reach out with any questions.

Start your dream business and keep it 100% compliant

Turn your dream idea into your dream business.