Question from Wicho, What Legal Structure Suits a Bi-National Online Marketplace?
Answer from AI:
When considering the best legal structure for an online marketplace with operations in both the United States and a Central American country, there are several factors to consider. It’s important to understand that the choice of legal structure will have implications for taxation, liability, and management. Here are some general guidelines:
Choosing a Legal Structure in the US
- C Corporation: This structure is a separate legal entity from its owners, offering liability protection. It might be suitable for a business planning to raise capital, but it comes with double taxation (corporate level and then on dividends).
- S Corporation: This option avoids double taxation as income is passed through to shareholders, but there are restrictions on the number and type of shareholders, which may not be compatible with your visa status or international plans.
- Limited Liability Company (LLC): An LLC offers liability protection and pass-through taxation. It is flexible in terms of management and ownership, which could be beneficial for a business with international ties.
Considering International Operations
When opening an office in a Central American country, you will need to comply with the local laws and regulations regarding business entities. This might involve creating a separate entity that operates in conjunction with your US-based business or establishing a branch or subsidiary of your US entity.
Ownership and Employment Concerns with an H-1B Visa
As an H-1B visa holder, you are correct that you can own a company but cannot be employed by it unless the employment is in line with your visa’s specialty occupation requirements. However, you can be involved in the company’s management as a board member or officer without being considered an employee.
Regarding employment in the Central American country, the H-1B visa restrictions apply only to your employment in the United States. You can be employed by the company in your home country, provided that you comply with the local labor laws and immigration regulations.
Steps to Take
- Consult with an immigration attorney to understand the limitations and possibilities of your H-1B visa status concerning business ownership and employment.
- Seek advice from a business attorney with experience in international corporate structures to determine the best entity type for your situation.
- Work with a tax professional to understand the tax implications in both the US and the Central American country.
- Research the Central American country’s requirements for setting up a business, possibly through a local attorney or business consultant.
Remember that each country has its own legal and tax implications for businesses, and international operations can be complex. It’s crucial to get personalized legal and financial advice to navigate these waters effectively.
For more information on business structures, you can visit the U.S. Small Business Administration website. For details on the H-1B visa, the U.S. Citizenship and Immigration Services is a valuable resource.
Please note that this information is general in nature and should not be taken as legal advice. It’s important to consult with legal professionals who can provide guidance tailored to your specific circumstances.