Yes, H4 EAD holders can open an LLC in the United States, and they can actively run it. The H4 Employment Authorization Document falls under category (c)(26), which USCIS treats as open-market work authorization that includes self-employment.1U.S. Citizenship and Immigration Services. USCIS Policy Manual Volume 10 Part A Chapter 2 The catch is that your right to work for the business is tied to the EAD itself, so a lapse in that document changes what you’re allowed to do inside your own company. Everything below flows from that single fact.
Owning an LLC Is Not the Same as Working for One
Anyone can own an LLC in the United States regardless of immigration status. There is no citizenship or visa requirement for business ownership itself. Immigration status enters the picture only when you want to actively work for the business, manage day-to-day operations, or draw a salary. Passive ownership, meaning putting money in and receiving profit distributions without performing services, does not require any work authorization at all.
Your H4 EAD authorizes both roles. You can hold the ownership interest and you can run the company. But if the EAD expires or you lose H4 status, you can remain an owner while being required to immediately stop working for the business, managing operations, or receiving compensation for services performed. Keeping those two roles clearly separated in your own head, and in your paperwork, is the single most useful thing you can do before you file anything.
Who Qualifies for an H4 EAD
Not every H4 spouse is eligible. You qualify only if your H1B spouse is the principal beneficiary of an approved I-140 immigrant petition, or holds H1B status that has been extended beyond the six-year limit under the American Competitiveness in the Twenty-first Century Act.2U.S. Citizenship and Immigration Services. Employment Authorization for Certain H-4 Dependent Spouses You file Form I-765 with USCIS, and you cannot begin any work, including operating an LLC, until you have the approved EAD card in hand.
Once issued, the (c)(26) EAD comes with no employer restriction and no occupational restriction.3eCFR. 8 CFR 274a.12 – Classes of Aliens Authorized to Accept Employment You can work for any employer, hold multiple jobs, freelance, or run a business of any type.
How to Form Your LLC
Pick a Name and a State
Most states require your LLC’s name to include “LLC” or “Limited Liability Company” and to be distinguishable from existing registered entities. Check availability through the Secretary of State’s website before filing. Forming the LLC in the state where you actually live and work is almost always simpler than forming elsewhere; a Delaware or Wyoming LLC used for a business you run from another state means registering as a foreign LLC in your home state too, which doubles fees and filings.
You’ll also need a registered agent with a physical in-state address to receive legal documents during business hours. You can serve as your own agent if you have a qualifying address, or hire a commercial service.
File the Articles of Organization
The core filing is the Articles of Organization, sometimes called a Certificate of Formation or Certificate of Organization depending on the state, submitted to the Secretary of State or equivalent agency. It lists the LLC’s name, registered agent, and principal address. Online filing is the fastest route in most states. Filing fees run roughly $50 to $500.
Write an Operating Agreement
Draft an Operating Agreement even in states that don’t require one. It sets out ownership percentages, how profits and losses are allocated, who manages the company, and what happens if a member exits. For an H4 EAD owner, this document is also where you can build in the ownership-versus-management separation that protects you later. If your EAD lapses, an Operating Agreement that clearly documents your ownership rights and profit distributions as separate from any active management role gives you a written basis for continuing to receive distributions while stepping back from operations.
Get an EIN
Your LLC needs an Employer Identification Number from the IRS before it can open a bank account, file tax returns, or hire anyone.4Internal Revenue Service. Employer Identification Number The online EIN application is instant but requires the responsible party to have a Social Security Number or ITIN.5Internal Revenue Service. Get an Employer Identification Number Most H4 EAD holders can obtain an SSN through the Social Security Administration once the EAD is issued. Without an SSN or ITIN, you’ll need to apply for the EIN by fax or mail, which takes noticeably longer.
Open a Business Bank Account
To open a business account, you’ll typically need the EIN confirmation letter, the Articles of Organization, the Operating Agreement, and government-issued photo ID such as a passport. Banks vary in how comfortable they are with non-citizen business owners, so call ahead. Bringing your EAD card and SSN in addition to your passport makes the appointment easier.
Tax Issues That Matter Specifically to H4 EAD Owners
Watch the S Corporation Election
By default, a single-member LLC is a disregarded entity for federal tax purposes, and a multi-member LLC is taxed as a partnership.6Internal Revenue Service. Single Member Limited Liability Companies7Internal Revenue Service. Limited Liability Company (LLC) Either can elect corporate taxation. The problem for H4 EAD holders is the S corporation election: federal law prohibits nonresident aliens from being S corporation shareholders.8Office of the Law Revision Counsel. 26 USC 1361 – S Corporation Defined If you’ve been in the United States long enough to meet the substantial presence test, you’re a resident alien for tax purposes and the S election is available. In your first year, before you’ve met that test, you’re a nonresident alien and the election is off the table. Get a tax professional’s read on your residency status before filing Form 2553.
Self-Employment Tax and Quarterly Payments
If your single-member LLC is a disregarded entity, the IRS treats you as self-employed. Self-employment tax runs 15.3% on net earnings and applies once your net self-employment income reaches $400 for the year.9Internal Revenue Service. Self-Employment Tax (Social Security and Medicare Taxes) Nothing is withheld from your income the way an employer would withhold, so if you expect to owe $1,000 or more at filing, the IRS requires estimated tax payments four times a year, and missing them triggers penalties even if you pay in full at year end.10Internal Revenue Service. Estimated Taxes
Form 5472: The Expensive Trap for New Arrivals
If you’re a nonresident alien for tax purposes and you own a single-member LLC, the IRS classifies it as a foreign-owned U.S. disregarded entity. That triggers a requirement to file Form 5472 with a pro-forma Form 1120, reporting transactions between you and the LLC, including capital contributions, loans, and distributions.11Internal Revenue Service. Instructions for Form 5472 The penalty for failing to file is $25,000 per form with no cap.12Internal Revenue Service. International Information Reporting Penalties The requirement typically applies only in the first year or two before you meet the substantial presence test; after that, once you’re a resident alien, Form 5472 no longer applies. If your residency status is uncertain, this is not the place to guess.
If Your EAD Lapses, Your Business Can Continue Without You
Before October 30, 2025, an H4 EAD holder who filed a timely renewal received an automatic extension of work authorization for up to 540 days while the renewal sat in processing. DHS eliminated that automatic extension for renewal applications filed on or after October 30, 2025.13U.S. Citizenship and Immigration Services. DHS Ends Automatic Extension of Employment Authorization If your EAD expires while USCIS is still processing your renewal, you have no interim work authorization.
For an LLC owner, that means the day your EAD expires, you must stop working for the company. No managing operations, no client work, no business decisions made in your capacity as a worker, no salary. What you can keep doing is owning the LLC and receiving passive profit distributions. The company itself is unaffected; it remains a valid legal entity regardless of your immigration status.
A few things worth doing before you’re anywhere near an expiration date:
- File Form I-765 for renewal as early as USCIS allows. Without the automatic extension, the only cushion is the one you build with filing time.
- Name someone in your Operating Agreement who can manage the LLC during a gap, whether that’s a co-member, a manager, or a trusted employee.
- Ask USCIS for expedited processing if you can document severe financial loss.
- Structure the Operating Agreement so ownership rights and profit distributions are clearly separated from active management duties.
Keeping the LLC in Good Standing
Most states require an annual or biennial report, with a filing fee that varies by state. Skip it and the state can administratively dissolve the LLC, which erases your liability protection. Many states also charge an annual franchise tax or similar fee independent of whether the business earned income; check your state’s schedule right after formation.
The liability shield is the whole point of forming an LLC, and courts can pierce it if you treat the company as an extension of your personal finances. The fastest way to lose that protection is mixing personal and business money in one account. Keep separate accounts, pay yourself through documented distributions or payroll, and don’t run personal expenses through the business card.
One filing you can cross off: as of March 2025, FinCEN removed the Beneficial Ownership Information reporting requirement under the Corporate Transparency Act for U.S. companies and U.S. persons.14Financial Crimes Enforcement Network. FinCEN Removes Beneficial Ownership Reporting Requirements for US Companies and US Persons A domestically formed LLC does not need to file a BOI report, regardless of the owner’s citizenship.