Those individuals holding H4 visas or possessing the H4 EAD (Employment Authorization Document) would ask the question, “Can H4 EAD start a business?” The answer is pretty clear—yes; but there are some essential things that one has to understand. For instance, if you are the holder of an H4 and you’re present in the USA due to your spouse’s work visa (which is likely an H1B), then you are asking whether you can work or start a business. H4 EAD brings a fascinating opportunity to so many H4 holders to contribute to the economy; one of the options available to them is starting a business. Let’s look at what exactly needs to be considered and other important facts about becoming a successful business exercise while holding an H4 EAD.
What Is H4 EAD?
First, let us define what H4 EAD is before going into business ownership. The H1B visa holders’ spouses and children use the H4 dependent visa to live in America. In fact, before 2015, authorities did not permit H4 visa holders to work. But, the H4 EAD came into play and gave permission to work for certain H4 visa holders, particularly those whose spouses are on the path of getting a permanent resident status (green card) based on the approved I-140 petition.
The H4 EAD grants the right to work as well as doing business activities like opening a company, freelancing, or acting as an independent contractor under the premises of an H4 visa.
Can H4 EAD Holders Start a Business?
H4 EAD holders can legally open a business in the United States, provided that they follow the relevant legal procedures and meet all other required criteria. One can now run a business as a resident or worker in the United States with the authorization to work associated with H4 EAD.
It is—or might be—the best opportunity that has come along for all those at the H-4 end of the spectrum and who may otherwise regard themselves as having some skills or the interest of entrepreneurship but who were unable to do so purely because of barriers in work eligibility.
Key Things to Consider When Starting a Business on H4 EAD
If you are already planning to start a business while on an H4 EAD, then I would advise you to know the following:
- On the legal fronts: An H-4 EAD holder must manage all sorts of legal and business registration requirements, just like any other entrepreneur in the country. There is a choice of the best suitable business structure (LLC, corporation, sole proprietorship, etc.) to register your business with the state, obtain all licenses necessary to operate it, and maintain compliance with all federal, state, and local laws.
- Taxation: Similar to other businessmen, your entry has to be through tax laws as applicable. These would include business taxes, employee taxes (in case you employ someone), and income taxes. It is advisable to contact an accountant or a tax professional for the required guidance in making that close connection between compliance and the tax obligations.
- No Restrictions on Business Type: There is no restriction on the type of business that you set up on the H4 EAD. Tech startup, restaurant, or consulting firm—the choice is entirely yours.
- Effects of the Visa Status: Under the H4 EAD, you can run a business, but remember that your eligibility to work will depend on the valid terms of your spouse’s H1B visa status. Losing a job or a change in the spouse’s visa status may affect your work authorization and business operation. Understand the requisites/terms of your visa and that of your spouse.
- Funding Your Business: Fundraising for your business becomes difficult because you are probably not a citizen of the USA. Most banks or financial institutions would want an additional requirement or document, so bear all the prep required in applying for business loans and credit.
Steps to Start a Business on H4 EAD
If an entrepreneur wants to start a business in the United States, he can have so much passion with an H-4 EAD that plans and performing basic tasks are a walk in the park. This should be done under the following stages.
- Choose a business form: LLC, corporation, or the only ownership or partnership. Most owners of small companies consider themselves LLCs for the causes of versatility and coverage with limited responsibility.
- Register your company: The business must be registered in the state where the business will be demonstrated. Registration is a process that includes payment of forms and fees, such as legal requirements for the installation of a business unit.
- Ein: One means employer identification number. The IRS mentions one as a commercial version of an SSN. In addition, you must receive business accounts and do everything related to tax.
- Business licenses and professional permits obtaining: Business permits and business licenses may vary in scope based on the nature of the business, which intends to unite; therefore, it is important to research local, state, and federal laws related to its specific industry.
- Open a business bank account: It will not only provide an account for commercial purposes, but it will also separate individual and business financing.
- Tax: Payment is made with the necessary submission of statements for timely expenses or income receipts and business taxes. Most likely it would be good to hire an accountant.
Pros and Cons of Starting a Business on H4 EAD
Pros:
| Advantages | Explanation |
|---|---|
| Freedom to Work and Earn | With an H4 EAD, you have the legal right to earn income and manage a business. |
| Flexibility | You can choose your own business model, working hours, and projects. |
| Opportunity to Contribute | You can contribute to the U.S. economy by creating jobs and providing services. |
| No Need for Sponsorship | Unlike other visa holders, you don’t need employer sponsorship to work. |
Cons:
| Disadvantages | Explanation |
|---|---|
| Dependence on Spouse’s Visa | Your right to work is tied to your spouse’s H1B visa status, which can be uncertain. |
| Challenges in Business Loans | Obtaining business funding may be more difficult for non-citizens. |
| Legal Complications | There might be complications if your spouse’s visa status changes unexpectedly. |
Conclusion
Yes, H4 EAD holders may start their own businesses. With the correct documentation, planning, and understanding of legal requirements, an H4 EAD is the ideal document for starting a business to fulfill any of your entrepreneurial dreams. Whether it is a side hustle, career as a freelancer, or large-scale business, your H4 EAD enables it. But remember that your right to work is bound by the visa of your spouse; thus, be wary of any changes in the status of your visa.
Read Also: How To Open Home Business In USA On H4 Visa: A Step-by-Step Guide
Frequently Asked Questions (FAQ) on “Can H4 EAD Start a Business?”
Essentially, the H4 EAD will be valid for the same amount of time as your spouse’s H1B visa. In case your spouse has had his visa extended, or if your spouse has an approved I-140 (Immigrant Petition for Alien Worker), your H4 EAD may be renewed. To avoid delays, consider applying for renewal prior to the expiration of your current EAD.
You can change your work authorization status when you consider expanding your business. If you plan to hire employees or undertake other types of major changes at the business level, you may want to investigate other visa options, such as the L-1 or H-1B visa, depending on your situation or according to the direction in which your business grows. Speak to an immigration lawyer to help you understand the best to follow in this regard.
Absolutely! Freelancing or consulting works for H4 EAD holders. You may freely work as an independent contractor or freelancer in multiple fields. Follow tax rules and set the right business structure, such as sole proprietorship or LLC.
