I'm going to have an H1-B visa as well soon (currently on TN). I was under the impression that you're not allowed to work for any other company or start your own while you have an H1-B/TN. Is that true?

You're allowed to start, and own, a company while on an H1-B. You're allowed to work for it too, so long as you continue to also work for the company that sponsors your H1-B.

You are not allowed to pay yourself anything from the new company while on an H1-B.

If one of your co-founders, or investors, is a US citizen you *might* be able to arrange a transfer of the H1-B to the new company. This is difficult and expensive though (at least we found it so). I decided it was more sensible for me to just wait for the Green Card.

"You are not allowed to pay yourself anything from the new company while on an H1-B."

What about any revenues that your new company might make? Sorry if that is a stupid question, I have done almost no research into this issue yet.

As far as I know these revenues have to remain the property of your new company (you can leave the money in the bank, or the company can spend it on something). You certainly cannot pay yourself a salary using them.

So essentially what you're saying is that any assets that the company makes cannot be transferred to me until I am an American citizen? I wonder what the consequences would be if I am an H1-B holder and revenues from moonlighting grew to a point where I could quit my day job.

Since I am a Canadian, I also wonder if it would be easier to just incorporate in Canada instead - this does not seem optimal either, as Canadian taxes are incredibly high, and the fact that I own a company there would mean that I would not be able to maintain non-residency status (and thus am not exempt from Canadian taxes) =(

I don't know if the visa thing messes it up, but as a generic Canadian you can own American companies with no issues. I believe the issue is in you paying yourself a salary or the like from the corp. However you should be able to collect dividends just fine. It's been a while since I looked into it for myself, so don't trust me on this. Personally I ended up going for a private Alberta named limited corporation for several reasons.

The tax rate starts at 16% if you're poor poor poor like me and maxes at 33% or so total for both federal and provincial. Check into the US corporate tax rates. If I remember doing my research right, you might be better off being a Canadian.

_"If one of your co-founders, or investors, is a US citizen you *might* be able to arrange a transfer of the H1-B.."_

Can you elaborate on your experience?

You can work for another company. There is an H1-B transfer process that involves some paperwork and a fee (which your new company might pay).

Is it ok to write code for your startup while you're still employed?

http://reddit.com/info/l1xb/comments/cl41q?context=5

How long do you have to be on a H1-B in order to be granted a GC?