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If I were to form an offshore company (IBC) for an internet business, can I run it in U.S. on F-1 Student status? It is just a software application. People go on the website to pay and download it. There is no major maintenance required, everything is almost automated.

Would I be allowed to hire freelancers to work for the offshore company?

Would I be allowed to hire employees(US or non-US) in the offshore company?

Does my presence in the U.S. as an F-1 student restrict me from earning money to my home country company and home country account?

P.S: the business will have no presence in the U.S. other than the owner living there and working for a job

  • What makes it "offshore"? – Ron Beyer Apr 10 '18 at 21:33
  • the company is incorporated in another country – Mr. Blockchain Apr 10 '18 at 21:57
  • Calling something "offshore" doesn't really make it offshore though. Is this a foreign company formed in what country? Is it just a sole proprietorship? What legal structure are you attributing to this company? If you are doing the work, and you are earning income in the US, the location of the business may be irrelevant. Did the USCIS or your DSO grant you permission to work? Do you have a financial hardship? – Ron Beyer Apr 10 '18 at 22:01
  • It is a IBC formed in the Bahamas. I am not earning income into any bank account tied to U.S. The work is just maintaining the servers. I dont have permission to work in U.S. – Mr. Blockchain Apr 10 '18 at 22:10
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Naively, this does not appeared to be permitted for holders of F-1 Visas.

M-1 Student Visa

The M-1 visa (Vocational Student) category includes students in vocational or other nonacademic programs, other than language training.

Employment

F-1 students may not work off-campus during the first academic year, but may accept on-campus employment subject to certain conditions and restrictions. After the first academic year, F-1 students may engage in three types of off-campus employment:

  • Curricular Practical Training (CPT)

  • Optional Practical Training (OPT) (pre-completion or post-completion)

  • Science, Technology, Engineering, and Mathematics (STEM)

  • Optional Practical Training Extension (OPT) M-1 students may engage in practical training only after they have completed their studies.

For both F-1 and M-1 students any off-campus employment must be related to their area of study and must be authorized prior to starting any work by the Designated School Official (the person authorized to maintain the Student and Exchange Visitor Information System (SEVIS)) and USCIS.

The issues are whether "employment" implicitly is limited to employment within the U.S., whether self-employment counts as employment, whether this is self-employment, and whether this self-employment (if it constitutes self-employment) is taking place in the U.S. for immigration purposes.

Resolution of some of these issues is very fact specific.

OPT at least, can be self-employment if it is related to your studies:

OPT Policy Guidance, section 7.2.1:

All OPT employment, including post-completion OPT, must be in a job that is related to the student’s degree program. For students who are not on a 17-month extension, this employment may include: (...) Self-employed business owner. A student on OPT may start a business and be self-employed. The student must be able to prove that he or she has the proper business licenses and is actively engaged in a business related to the student’s degree program.

So, if you are a history student, this is probably not allowed, but if you are a computer programming or business major, it might be allowed.

But, this comes with caveats:

In very limited circumstances, F1 students on OPT may be eligible to qualify as self-employed business owners. Of course, the business must relate directly to your studies. In addition, you must be able to obtain any required business licenses.

You can read more about current US rules and regulations relating to improving and expanding training opportunities for F1 students with STEM degrees here.

In the most general of terms, F1 students are prohibited from ‘engaging in business.’ At the same time, students on F1 visa are not expressly forbidden from ‘establishing’ their own business since they are allowed to engage in ‘preliminary business planning.’

Again, it’s impossible to overstate that there’s a sharp legal difference between ‘establishing’ a business and ‘engaging’ with or working for it. The usual rule is that an F1 student is forbidden from working for a company – even one s/he starts.

As described, there are some status modifications an F1 student can make that would allow him or her to work for a business they established. The CPT work authorization mentioned above is one way; the other is OPT, also previously mentioned.

Specific questions:

Would I be allowed to hire freelancers to work for the offshore company? Would I be allowed to hire employees(US or non-US) in the offshore company?

There is probably nothing wrong with owning a company outside the U.S. that has non-U.S. employees or non-U.S. independent contractors to which you devote minimal attention.

If you have U.S. employees you are probably running a business without a visa authorizing you to do so within the U.S.

Does my presence in the U.S. as an F-1 student restrict me from earning money to my home country company and home country account?

Nothing prevents you from sending legally earned money anywhere you want, or from earning money from property (such as passive investments) anywhere. It probably doesn't prohibit you from earning money from earned income for services provided in your home country either.

P.S: the business will have no presence in the U.S. other than the owner living there and working for a job

If you are actually doing significant work while in the U.S. you are probably in violation of the F-1 visa subject to the narrow exception for OPT self-employment related to your studies.

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