Law Offices of Stuart J. Reich, PLLC

Practice Limited to Immigration & Nationality Law

11 Broadway, Suite 615
New York, NY 10004

(212) 430-6582 phone
(212) 430-6583 facsimile

Corporate Structure for Start-ups – Corporate Form and Equity

Q: How much does structure of the company matter when I’m setting up a US business and hoping to obtain a visa?

A: First, we need to figure out what we mean by “structure” – this can be used to refer to the corporate form of the company: Corporation, Limited Liability Company (LLC), etc. Or, it can be used to discuss ownership (equity) – who owns what percentage of the company, is part owned by a separate US or overseas corporate entity, etc.

In either case, the answer will to some extent depend on what type of visa we’re seeking.

Q: If we are talking about form of the business entity, what should it be?

A: Here there is a great deal more flexibility, generally speaking. Few of the primary visas available for new companies will require a specific form. It would be very difficult to proceed as a “sole proprietorship” – where the company and individual are legally the same and there is no separate entity for the company – but almost any other form will work for an H-1B, for an E-1/E-2, for an L-1 (however a “branch” office, while legally permissible, may be problematic later in the process), or an O-1.

Q: If we are talking about ownership structure/equity, how should this be handled?

A:Here, the answer will be very specific to the type of visa.

Majority equity ownership can be essential for an E-2, but almost entirely prohibited for an H-1B. In each case, there are exceptions – it is possible to get an E-2 for a non-majority owner in some situations, and not entirely impossible – at least in theory – to get an H-1B for an individual with a majority equity stake (though it would be extremely difficult).

An L-1A can be a majority owner –it isn’t either required or prohibited – but majority equity ownership alters the nonimmigrant intent requirement for the L-1A and may make it difficult to apply for permanent residence later on.

There is no blanket prohibition on majority equity ownership for an O-1…though the context of the business involved may mean that such ownership raises issues for the adjudication of the case.

Contact us here to arrange a consultation, to inquire about retaining us to handle your immigration matter, or simply to suggest topics you would like to see covered on our site.

The above is presented for informational purposes only, and does not constitute legal advice or create an attorney-client relationship with our firm. The information provided should not be used as guidance in pursuing an immigration matter absent consultation with a qualified immigration attorney.