Although there is no definitive data, some researchers estimate that thousands, or even hundreds of thousands, of small businesses in the U.S. are operated by undocumented immigrants. There is no federal or state law that prohibits an immigrant who has no legal immigration status from starting his or her own business.
For many undocumented immigrants, becoming a business owner or working as an independent contractor may be the best legal way to earn a living. These paths also protect other businesses and other employers who may want to work with an immigrant with no legal status. For instance, when an employer hires an independent contractor, he or she sets a schedule, sends an invoice to the employer for each project completed, and uses his or her own tools. An employer who hires an independent contractor has no obligation to take out federal or state taxes from the contractor’s pay, and has no obligation to verify a contractor’s immigration status.
Immigrants looking to start a business also may want to form a limited liability company (LLC), which does not require any proof of immigration status. Registering an LLC with the state is not a difficult or lengthy process, although it does require the payment of some fees and taxes. The immigrant then operates the business under the name of the LLC, as opposed to his or her own name.
The owner of the LLC pays federal, state, and local taxes, and complies with any required inspections. Essentially, the immigrant operates the business in a completely legal manner, just as a U.S. citizen would operate his or her own business. Likewise, the Internal Revenue Service (IRS) makes it easy for undocumented immigrants to pay taxes owed by their businesses. An immigrant does not have to provide proof of legal immigration status in order to get an Individual Taxpayer Identification Number (ITIN); the only requirement to obtain an ITIN is a birth certificate or an official foreign ID.
Once an immigrant has an ITIN, then he or she can apply for an Employer Identification Number (EIN). The immigrant is then the owner of a fully legal business, at least as far as the IRS is concerned. In fact, as a legal business owner, he or she can even hire U.S. citizens as employees. However, there are still a number of barriers that an immigrant may encounter in the course of owning and operating a business or becoming an independent contractor. For example, immigrants with no legal status are not eligible for federal financial aid, so attending college or a technical school to get the necessary education and training may not be a possibility if an immigrant has to pay for it out of his or her own pocket.
In some industries, such as construction, necessary permits or certifications may not be available to undocumented immigrants. For the immigrant who wants to start a successful business in the U.S., there are some barriers to doing so when he or she has no legal immigration status. However, there may be ways that an immigrant can still own and operate his or her own business. We are dedicated to providing you with the essential legal advice that you need in this type of situation, and to representing your interests before the immigration court, if necessary. We devote all of our efforts to advocating on behalf of you and your family before the immigration court. Don’t hesitate to contact the Bay Area immigration lawyers of Landerholm Immigration, A.P.C., and set up your legal consultation today. We are here to help.