The United States is a land of opportunity — and that includes for immigrants who haven’t yet become citizens. Whether you’re on a visa, green card, or another immigration status, you can start a business in the U.S.. But before you do, it’s critical to understand the legal landscape.
This guide highlights key U.S. laws and regulations you must be aware of as a non-citizen entrepreneur. From business formation to taxation and immigration implications, knowing your rights and responsibilities will help you launch your startup legally and successfully.
Can Immigrants Start a Business Without Citizenship?
Yes. You do not need to be a U.S. citizen to start a business. Non-citizens can legally own and operate businesses in the U.S., including forming LLCs, corporations, or registering as sole proprietors.
However, the type of visa or immigration status you hold may affect how involved you can be in daily operations. For example, some work visas prohibit self-employment.
Key U.S. Laws to Know Before You Launch
1. Business Entity Formation Laws
You’ll need to choose a business structure like:
- LLC (Limited Liability Company) – Offers liability protection and flexibility for foreign founders
- C-Corporation – Often preferred by startups seeking investment, especially in Delaware
- Sole Proprietorship – Easier to set up, but no liability protection
Important: Foreign nationals cannot form an S-Corporation unless they are U.S. citizens or resident aliens (green card holders or those meeting the substantial presence test).
Learn more from the IRS about business types:
👉 https://www.irs.gov/businesses/small-businesses-self-employed/business-structures
2. Visa Restrictions and Self-Employment Rules
Some visas prohibit owning or operating a business in the U.S.:
- B-1/B-2 Visitor Visas – No work or business activity allowed inside the U.S.
- F-1 Student Visa – Strict restrictions, but CPT/OPT might allow internships or temporary work
- H-1B Visa – Self-employment is restricted unless you form a structure that separates you from control
- Green Card Holders – Free to start any type of business
Always consult an immigration attorney to confirm what’s allowed under your specific visa.
3. Employment and Labor Laws
If you plan to hire employees, your startup must follow U.S. labor laws:
- Pay minimum wage (set at the federal or state level)
- Provide workers’ compensation insurance
- Follow anti-discrimination and hiring regulations
- Withhold taxes (e.g., Social Security, Medicare)
You’ll also need to register with IRS and state labor departments for payroll compliance.
Official resource for employment law:
👉 https://www.dol.gov/general/topic/wages
4. Taxation and Reporting Laws
Your business will likely owe:
- Federal income tax (filed with the IRS)
- State taxes, depending on where your business is registered
- Sales tax, if you sell goods or services in taxable categories
- Self-employment tax, if you earn income from your business directly
If you’re a foreign owner of a single-member LLC, you may also be required to file Form 5472 annually with Form 1120, even if you don’t owe taxes.
You may also be eligible for tax treaties between your home country and the U.S. to avoid double taxation.
IRS page on international taxpayers:
👉 https://www.irs.gov/individuals/international-taxpayers
5. Banking and Financial Regulations
To separate personal and business finances, open a U.S. business bank account. You’ll need:
- An EIN (Employer Identification Number)
- U.S. business registration documents
- A U.S. business address or virtual address
- In some cases, a passport and ITIN
Banks like Mercury, Relay, and Wise are popular with immigrant and international founders.
6. Licensing and Local Permits
Depending on your business type and state, you may need:
- A business license from your city or county
- Professional licenses (e.g., for real estate, food service, or healthcare)
- Home occupancy permits, if operating from a residential address
Check your state’s business portal to learn what’s required.
7. Privacy, Data, and Consumer Protection Laws
If you collect customer data or sell products online, be sure to follow:
- FTC consumer protection laws
- State privacy laws like California’s CCPA
- Proper use of customer email, credit card, and personal data
Violations can lead to serious fines—even for small startups.
Common Mistakes Immigrant Entrepreneurs Make
- Starting a business on the wrong visa
- Mixing personal and business finances
- Ignoring IRS reporting requirements for non-citizens
- Failing to hire a qualified accountant or lawyer
- Not researching required licenses in their state
FAQs: Legal Tips for Immigrant Startup Founders
Q: Can I start a business in the U.S. without a green card?
A: Yes. You can own a U.S. business even without permanent residency. However, be cautious about managing the business while physically in the U.S., depending on your visa.
Q: What is the best business structure for immigrants?
A: Most non-citizens choose an LLC or C-Corp, depending on whether they plan to raise capital or stay small and independent.
Q: Can I apply for an EIN without an SSN?
A: Yes. You can apply for an EIN using IRS Form SS-4, even if you don’t have a Social Security Number.
Q: What taxes do I need to pay?
A: This depends on your structure and income. At minimum, expect to file federal returns. You may also owe state taxes or self-employment taxes.
Final Thoughts
Starting a business in the U.S. as a non-citizen immigrant is not only possible — it can be incredibly rewarding. But legal knowledge is key.
By understanding how U.S. business laws, visa restrictions, and tax obligations apply to your situation, you can avoid costly mistakes and build a compliant, successful company from the start.
Before launching, consult with an immigration attorney, a business lawyer, and a CPA experienced with non-resident founders to make sure you’re on solid legal ground.
Success in the U.S. starts with preparation. Know the laws, make a plan, and build your business with confidence.