Economic & Business Laws — United States

Economic and Business Laws Immigrants Should Know in the United States

*Disclaimer: Immigration and business laws change frequently. Figures, thresholds, and procedures cited below should be verified with USCIS, the Department of State, IRS, SBA, or a licensed immigration/business attorney before acting.*

1. Right to Work by Visa Type

Immigrant Visas (Green Card Holders)

• Lawful Permanent Residents (LPRs) have unrestricted work authorization in almost any job, similar to citizens (with exceptions for certain federal jobs and security-sensitive positions).
• Receive a Green Card (Form I-551), which itself serves as proof of work authorization—no separate EAD needed.

Nonimmigrant (Temporary) Visas

| Visa Type | Work Authorization | Key Restrictions |

|---|---|---|

| H-1B | Specialty occupation employment | Employer-specific; requires sponsoring employer and Labor Condition Application; 3-year terms, renewable, 6-year cap (extensions possible) |

| L-1 | Intracompany transferee | Employer-specific; L-1A (managers) up to 7 years, L-1B (specialized knowledge) up to 5 years |

| O-1 | Extraordinary ability | Employer/agent-specific; no set cap on duration |

| TN | NAFTA/USMCA professionals (Canada/Mexico) | Employer-specific; renewable indefinitely in 3-year increments |

| E-2 | Treaty investor | Can work for own E-2 business; nationality-restricted (treaty countries only) |

| E-1 | Treaty trader | Similar to E-2; treaty country nationals only |

| F-1 (Student) | Limited: CPT, OPT (12 months + 24-month STEM extension) | Must relate to field of study; on/off-campus rules apply |

| J-1 (Exchange) | Program-specific | Often has 2-year home residency requirement afterward |

| H-4/L-2 (Dependents) | L-2 spouses: automatic work authorization; H-4 spouses: EAD required if H-1B holder has approved I-140 or extension under AC21 | Not automatic for all dependents |

| B-1/B-2 (Visitor) | No work authorization | Business visitors can attend meetings/negotiate contracts, but cannot perform labor for U.S. wages |

| Asylees/Refugees | Authorized upon grant of status | Asylum applicants must wait 150 days to apply for EAD; refugees authorized immediately |

| DACA recipients | EAD-based work authorization | Status subject to ongoing litigation—verify current legal status |

Key Points

• Unauthorized work can jeopardize future immigration benefits, including green card eligibility.
• EAD (Employment Authorization Document, Form I-765) is required for many categories without inherent work rights (e.g., pending asylum, certain family-based adjustment applicants).
• E-Verify compliance is mandatory for federal contractors and required in many states.

2. Starting a Business as a Foreign National

Can Non-Citizens Start a Business?

Yes. U.S. law does not require citizenship or even a Green Card to own a business. However, work authorization to operate/manage the business depends on immigration status.

Common Structures

• LLC or Corporation: No citizenship requirement to be an owner/shareholder.
• S-Corporations: Restricted—shareholders must be U.S. citizens or residents (not available to nonresident aliens).
• C-Corporations and LLCs: No such restriction; foreign nationals can be owners.
• Sole Proprietorships: Legally allowed but risky without proper work authorization, as it implies personal labor in the U.S.

Visa Pathways for Entrepreneurs

• E-2 Treaty Investor Visa: For nationals of treaty countries; requires "substantial investment" (no fixed minimum, but often $100,000+) in a real, operating business you control.
• EB-5 Immigrant Investor Visa: Path to permanent residency.
• Minimum investment: $1,050,000 standard, or $800,000 in Targeted Employment Areas (TEAs)—rural or high-unemployment areas (as of the EB-5 Reform and Integrity Act of 2022; verify current figures).
• Must create 10 full-time jobs for U.S. workers.
• International Entrepreneur Rule (Parole): Allows entrepreneurs of startups with significant U.S. investment ($250,000+ from qualified investors) to receive parole to build their business (not a visa, and subject to policy changes).
• O-1 or H-1B: Some entrepreneurs sponsor themselves through their own company if structured properly (requires independent board/control mechanisms).

Practical Considerations

• EIN (Employer Identification Number): Required for business bank accounts and tax filing; obtainable via IRS even without an SSN (using Form SS-4).
• ITIN (Individual Taxpayer Identification Number): For those without SSN eligibility, needed for personal tax filing tied to business income.
• State registration: LLC/incorporation rules vary by state (Delaware, Wyoming, and Nevada are popular for foreign founders due to favorable corporate laws).

3. Foreign Investment Restrictions

CFIUS (Committee on Foreign Investment in the United States)

• Reviews foreign investments/acquisitions that could affect national security.
• Expanded under FIRRMA (2018) to cover:
• Critical technology
• Critical infrastructure
• Sensitive personal data of U.S. citizens
• Mandatory filings required for certain transactions (e.g., foreign government-linked investors acquiring stakes in critical tech/infrastructure companies).
• Can result in blocked deals or mandated divestment (e.g., high-profile cases involving Chinese-owned apps).

Sector-Specific Restrictions

• Banking: Foreign control of U.S. banks requires Federal Reserve approval; extensive licensing under the Bank Holding Company Act.
• Broadcasting/Telecom: FCC limits foreign ownership of broadcast licenses (generally capped around 25% direct foreign ownership, though the FCC can waive this for indirect ownership with approval).
• Aviation: U.S. airlines must be 75%+ owned/controlled by U.S. citizens (49% foreign equity cap, but voting control must remain domestic).
• Defense contractors: Heavy restrictions; often require Special Security Agreements.
• Agricultural land: Some states restrict or require disclosure of foreign ownership of farmland (e.g., AFIDA—Agricultural Foreign Investment Disclosure Act requires reporting).

Sanctions & OFAC Compliance

• Investors from sanctioned countries (e.g., currently Iran, North Korea, Cuba, Syria, and Russia-linked entities under various programs) face strict limitations or outright prohibitions on U.S. investment.
• OFAC maintains the SDN (Specially Designated Nationals) List—transacting with listed individuals/entities is illegal.

4. Property Ownership Rights for Non-Citizens and Permanent Residents

General Rule

Non-citizens (including undocumented immigrants) can generally buy and own real estate in the U.S.—there is no federal citizenship requirement for property ownership.

Key Nuances

• No visa or Green Card required to purchase residential or commercial property.
• Financing challenges: Many banks require SSN, credit history, or larger down payments (30-50%) for non-resident buyers without established U.S. credit.
• FIRPTA (Foreign Investment in Real Property Tax Act): When foreign nationals sell U.S. real property, buyers must withhold 15% of the gross sales price (in most cases) and remit to IRS—applies regardless of profit/loss; refundable if no tax is owed.
• State-specific restrictions:
• Some states have recently passed laws restricting land ownership by nationals of certain countries (e.g., China, Russia, Iran, North Korea) near military installations or critical infrastructure—Florida, Texas, and other states have enacted such laws (2023-2024); verify current status as this area is rapidly evolving and facing legal challenges.
• Agricultural land: Roughly two dozen states restrict or ban foreign ownership of farmland to varying degrees.
• Property taxes and estate tax: Non-resident aliens face different (often less favorable) estate tax exemptions on U.S.-situated property (as low as $60,000 exemption vs. millions for citizens/residents)—critical for estate planning.

5. Banking Access for New Immigrants

Opening a Bank Account

• No SSN required at most banks—an ITIN, foreign passport, or visa + secondary ID often suffices.
• Major banks (Chase, Bank of America, Wells Fargo, HSBC, Citibank) have international/immigrant banking programs allowing account opening before or shortly after arrival.
• HSBC, Citigold International: Allow account setup from abroad, useful for pre-arrival planning.

Building Credit

• No credit history transfers internationally—immigrants start with no U.S. credit score.
• Secured credit cards are the most common entry point to build credit.
• Nova Credit and similar services now allow some credit history transfer from certain countries (UK, India, Australia, Mexico, etc.) to U.S. lenders.

Documentation Typically Needed

• Passport
• Visa or immigration document (I-94, Green Card, EAD)
• Proof of U.S. address (utility bill, lease)
• ITIN or SSN (if eligible)

SSN vs. ITIN

• SSN: Available to those authorized to work (via SSA, Form SS-5).
• ITIN: For tax purposes only, available to those ineligible for SSN (via IRS Form W-7)—does not grant work authorization but allows banking, tax filing, and sometimes credit-building.

6. Labor Law Protections for Immigrant Workers

Universal Protections (Regardless of Immigration Status)

U.S. labor laws generally protect all workers regardless of immigration status, including undocumented workers:

• Fair Labor Standards Act (FLSA): Minimum wage ($7.25/hour federal minimum; many states/cities higher—e.g., California $16+/hour, NYC $16+/hour as of 2024) and overtime protections apply to all workers.
• Title VII of the Civil Rights Act: Protects against discrimination based on national origin, race, religion, sex—applies to authorized workers; some protections extend regardless of status.
• OSHA (Occupational Safety and Health Act): Workplace safety protections apply to all workers, documented or not.
• NLRA (National Labor Relations Act): Right to organize and join unions generally extends to undocumented workers (per *NLRB v. certain rulings*, though remedies like back pay may be limited post-*Hoffman Plastic Compounds v. NLRB* (2002), which restricted back-pay for undocumented workers).
• Workers' Compensation: Most states provide coverage regardless of immigration status if injured on the job.

Anti-Discrimination & Retaliation Protections

• Immigration and Nationality Act (INA) Section 274B: Prohibits employment discrimination based on citizenship status or national origin for authorized workers—enforced by the Office of Special Counsel for Immigration-Related Unfair Employment Practices (IER) within the DOJ.
• Retaliation protections: Employers cannot threaten to report workers to ICE in retaliation for asserting labor rights (wage claims, safety complaints, union activity)—such threats can itself be an unfair labor practice or civil rights violation.
• Form I-9 compliance: Employers must verify work authorization for all employees, but cannot demand specific documents or engage in "document abuse" (asking for more/different documents than legally required based on citizenship or national origin)—this itself is illegal discrimination under INA.

Human Trafficking & Forced Labor Protections

• Trafficking Victims Protection Act (TVPA): Provides T-visas for trafficking victims who cooperate with law enforcement, offering a path to legal status.
• U-Visas: Available to victims of certain crimes (including labor exploitation, domestic violence) who assist law enforcement—caps at 10,000 per year, with significant backlogs (current wait times often 5+ years for initial approval).

Wage Theft & Enforcement Mechanisms

• Department of Labor (DOL) Wage and Hour Division: Investigates wage theft claims regardless of worker's immigration status; workers can file complaints without fear of DOL reporting them to immigration authorities (per interagency policy, though practical trust varies).
• State labor agencies: Many states (California, New York, Illinois) have additional protections and dedicated units for immigrant worker rights, including certified translation services for complaints.
• Confidentiality protections: Some states restrict local law enforcement/agencies from asking about immigration status during labor investigations (e.g., California's Immigrant Worker Protection Act).

Special Visa Categories with Labor Protections

• H-2A (Agricultural) and H-2B (Non-agricultural) workers: Employers must provide specific wage guarantees (Adverse Effect Wage Rate for H-2A), housing standards, and transportation—violations enforceable through DOL complaints.
• Whistleblower protections: Workers reporting employer violations of immigration-related labor laws (e.g., visa fraud, wage violations) may qualify for U-visa certification or protection from retaliatory termination.

Practical Enforcement Realities

• DACA and TPS holders: Have explicit work authorization and full labor law protections while status remains valid—but subject to program continuity, which has faced ongoing litigation and policy shifts (verify current status).
• Documented vs. undocumented distinctions: While most protective labor laws apply regardless of status, remedies may differ—for example, back pay awards for undocumented workers have been limited by *Hoffman Plastic* in NLRA contexts, though some state courts have ruled differently under state wage laws.
• Know Your Rights resources: DOL, EEOC, and NLRB all provide multilingual materials, and many operate complaint hotlines that do not require proof of immigration status to file.

7. Tax Obligations Intersecting with Business/Economic Activity

Residency-Based Taxation

• Substantial Presence Test: Determines tax residency (183-day weighted formula across 3 years)—resident aliens taxed on worldwide income like citizens; nonresident aliens taxed only on U.S.-source income.
• Green Card Test: LPRs are automatically tax residents regardless of physical presence, unless a tax treaty tie-breaker applies.

Key Forms & Compliance

• Form 1040NR: For nonresident alien tax filings.
• FBAR (FinCEN Form 114) and FATCA (Form 8938): Required for foreign account/asset reporting above certain thresholds ($10,000 aggregate for FBAR)—applies to resident aliens and citizens, with steep penalties for non-compliance ($10,000+ per violation for non-willful failures).
• Exit tax considerations: Green card holders who held status 8+ of the last 15 years may face expatriation tax if they relinquish residency and meet net worth/tax liability thresholds (covered expatriate rules).

Self-Employment & Business Taxes

• Foreign entrepreneurs operating U.S. businesses face standard federal corporate tax (21% flat rate for C-corps), state taxes (varying widely, from 0% in states like Texas/Florida/Wyoming to 8-9%+ in California/New York), and self-employment tax obligations if operating as sole proprietors with work authorization.

8. Practical Recommendations

• Consult a licensed immigration attorney before starting employment or a business venture tied to visa status—work authorization mistakes can jeopardize future adjustment of status or citizenship applications.
• Consult a CPA familiar with international tax for cross-border income, FBAR/FATCA compliance, and entity structuring (C-corp vs. LLC vs. S-corp eligibility).
• Verify current thresholds for EB-5 investment amounts, minimum wage rates, and visa caps directly via USCIS.gov, DOL.gov, and IRS.gov, as these are frequently adjusted.
• State-level research is essential—property ownership restrictions, minimum wage, and business formation rules vary significantly by state and are changing rapidly in some areas (particularly foreign land ownership laws).
• Monitor policy changes: Programs like DACA, TPS, and the International Entrepreneur Rule have faced ongoing litigation and administrative changes—confirm current status before relying on them for planning purposes.

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