Securities Laws for Raising Capital on a Work Visa
U.S. securities laws are designed to protect investors. They do not restrict who can form a company or sponsor an offering based on immigration status.- Regulation D, Rule 506(b) and Rule 506(c) are the most widely used exemptions for private capital raising
- Rule 506(b) allows unlimited accredited investors and up to 35 sophisticated non-accredited investors (but no general advertising)
- Rule 506(c) allows general solicitation and advertising, but all investors must be accredited and verified
- Regulation S allows you to raise funds from non-U.S. persons entirely outside the United States, often in combination with Reg D
- Foreign nationals may form a U.S. entity (LLC or LP) to raise capital under these exemptions
Reg D vs. Reg S – Key Differences
Immigration Restrictions for Visa Holders Raising Capital
While securities laws are permissive, immigration law is often the limiting factor.- Most work visas (H-1B, L-1, O-1, etc.) restrict employment to a sponsoring employer
- Actively raising capital, managing investors, or running your own real estate investment company may be considered unauthorized employment
- Visa holders may be able to own a U.S. business passively, but not manage it directly
- Immigration violations can jeopardize both your visa and long-term residency goals
Structuring Options for Foreign Nationals
Foreign nationals often resolve these challenges by structuring their roles strategically:- Form a U.S. entity (LLC or LP) as the issuer of securities
- Appoint a U.S. citizen, green card holder, or otherwise work-authorized partner to manage capital raising and investor relations
- Participate as a passive owner until immigration status changes
- Consider investor-focused visas such as the E-2 Treaty Investor visa or EB-5 Immigrant Investor visa for long-term flexibility
- Use Reg D for U.S. investors and Reg S for offshore investors to broaden your investor base
Key Questions for Your Immigration Attorney
- Can I legally own a U.S. real estate investment company under my visa?
- Does my visa allow me to actively manage or only passively invest?
- Would raising capital from U.S. investors be considered unauthorized work?
- Can I appoint a U.S.-based partner to handle investor relations while I remain an owner?
- Would an E-2 or EB-5 visa better support my long-term real estate investment goals?
- Do I face travel restrictions when meeting offshore investors under Reg S?
