Almost one out of every 25 physicians in some states are working under the H-1B program. The H-1B is a visa in the United States under the Immigration and Nationality Act, section 101(a)(15)(H) that allows U.S. employers to temporarily employ foreign workers in specialty occupations.
As an Indian citizen working for an American company in the U.S. that is sponsoring my H-1B visa, I often ponder the following questions:
- Can I open my own LLC (Limited Liability Company) to buy an investment real estate property in the US using my LLC?
- Can I incorporate an LLC, and can that LLC buy a real estate investment property?
In the initial stages of my investment career, these questions kept me up at night for many months. I never received a straight answer from my legal counsel. The more attorneys I spoke with, the more variation I heard in their answers to the questions. This is because the U.S. Citizenship and Immigration Services (USCIS) describes their regulations using vague language. How the regulations are interpreted depends on the person reviewing it, and their own risk tolerance. This leaves a lot of uncertainty.
When evaluating the USCIS stance on H-1B holders owning an LLC, I’ve recognized two different scenarios:
- An H-1B holder working for an American company opens an LLC, wants to work for their LLC, and obtains another H-1B visa sponsored by his own LLC. This is complicated, and will not be discussed here. Refer here for more details on this situation.
- An H-1B holder working for an American company wants to invest in real estate. Under an LLC, they buy properties for asset protection and financial segregation. This article discusses this scenario.
Physicians on H-1B visas can open LLCs to buy investment real estate properties. But, we can only be owners of LLC companies. When working under an H-1B visa, we cannot work for any other company including our own LLCs— either paid work or free work. If we do, our work is considered “unauthorized employment” according to the USCIS regulations. Additionally, we cannot resign from our current jobs. If we do, our stay in the U.S. becomes illegal.
Therefore, if we want to own rental properties under an LLC, we need to hire property managers to manage (e.g., reconstruction, renovation, manage renters) the properties. If we manage them ourselves, we will be violating USCIS regulations as we cannot participate directly in the operations or be the CEO of our own LLCs.
However, opening an LLC and investing in a commercial property syndication deal is considered passive investments. The sponsors of the syndication deal are managing the property; you are not the manager. Therefore, it does not violate USCIS regulations.
If you are on an H-1B, and want to invest in real estate via your LLC, hire an attorney and seek legal advice. If you have an appetite for more information - refer to these USCIS publications regarding this topic - USCIS-1; USCIS-2; USCIS-3.
Harsha Moole is an Internal Medicine physician and founder of PhysicianEstate, a physician-owned and managed real estate platform directed specifically towards doctors in USA.
