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I would like to position a service offering online prior to registering an LLC, to test the market. Once I have potential interest/buyers, I will not transact until I have registered the LLC. Is that still within restrictions of the H4 visa? Would that still be considered illegal?

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Disclaimer, I'm not an lawyer, this is purely speculative.

The rules are fairly simple. On H4 you cannot profit from any business or work in US.

However that's when things get interesting. If the LLC would not generate any profit, but re-invest 100% of it's revenue into growth, that in theory would be legal. Then you could in theory grow the business until it reaches the size that it would be possible to obtain investor visa.

Here is BBC America take on the subject, mention as one of the points in "Six (Legal) Ways to Earn Money in the U.S. Without a Work Visa":

Invest in a Business

You can plumb money into a venture so long as you’re an entirely passive party, which means you can’t actually work for the business. So, if a friend wants to open a restaurant and you want to invest, that’s fine. What’s not fine is for you to take on shifts, or even help with the behind the scenes running of the joint. But there’s nothing to stop you taking the time to evaluate investment opportunities and drill potential partners on how they’ll be spending your cash.

Thats a very thin line though, so I'd suggest that you'd consult your immigration attorney. Do NOT take random legal advice from internet.

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  • profit has nothing to do with it. You're not allowed to work, not profit. Also, being paid in ownership shares is no different than being paid in money. Instead of owning money - you own an entity that owns the money. You still own the money. So LLC has really nothing to do with this question, it is a red herring. – littleadv Oct 15 '14 at 5:19
  • You're basing that on hearsay. – vartec Oct 15 '14 at 5:43
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    I'm basing it on the quote you have in your answer. The quote says exactly the same thing as I: you're not allowed to work, not to make profit. You can be a passive investor, by all means. But you cannot work. – littleadv Oct 15 '14 at 7:52
  • Question is not "can I work for my own LLC?", it's "can I create an LLC?". You're speculating about intentions of OP. And you're may be right about the intentions, but that is not part of the question as it stands. SE guidelines specifically state, that one should answer the question actually asked, rather the question you think OP wanted to ask. – vartec Oct 17 '14 at 2:02
  • That was not the question. The OP was very clear: "I would like to position a service offering online prior to registering an LLC". – littleadv Oct 17 '14 at 6:38
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As other answers have eluded, you can (most likely) set up a legal entity as a business in the US on your visa (or on any visa, or even without entering the USA at all), but an LLC may not be the best choice. A C-Corp is probably better if you are not permitted to work in the US, but consult with a tax attorney. However, you still cannot do work for that company while in the USA. You can be an investor in a US-based company which hires others (who have legal authorization to work) to do work in the USA.

Whether you can actually do the "work" of forming and managing a company while in the USA may be a sticky matter, and you should consult an attorney.

But it sounds like your goal is to bypass labor restrictions on your visa, and an LLC won't help you do that.

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    Actually, LLC specifically may be problematic, since all the members are considered to be "active" partners. I would suggest avoiding LLC as an investment entity. The safest is C-Corp, next comes LLLP/LLP/LP if you're a limited partner. GP/LLC and S-Corps are very risky in this regard as it can be easily argued that you're not a passive investor for these entities. – littleadv Oct 16 '14 at 5:57
  • Managing the company is illegal unless you have work authorization. Nothing sticky there. You may be able to "manage" LLC that holds rentals as a liability barrier vehicle, but not an actual startup. Being a director in a corporation is similarly considered "work". You cannot do that on a visa. Nothing sticky there. You can invest - give your money to someone and get share certificates back. That's all you can do. – littleadv Oct 17 '14 at 6:41
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You cannot work under H4 visa. So yes, it would still be considered illegal. LLC has nothing to do with it.

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  • This is not true, you're specifically allowed to be passive investor in a venture. Also you're not an immigration attorney, you cannot give authoritative answer. – vartec Oct 15 '14 at 5:44
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    @vartec I think you misunderstood the difference between "working" and "investing". YOU ARE NOT ALLOWED TO WORK ON H4. Plain and simple. – littleadv Oct 15 '14 at 7:53
  • @Flimzy I guess we read different questions. I'll quote from the one I read: "I would like to position a service offering online prior to registering an LLC". But regardless, "dump money into it and pay others to do work" is work. It is called "managing". You can buy shares on a stock exchange, you cannot manage your own company. – littleadv Oct 15 '14 at 15:49
  • @Flimzy and as I said - LLC has nothing to do with H4. I'm not sure what it is that you are disagreeing with, but the OP asked if working prior to setting up the LLC is ok - that is exactly what I answered. – littleadv Oct 15 '14 at 15:57

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