O3 Visa and Unauthorised Employment
 

Hi everyone!

I'm so glad to have found this forum, my head is hurting slightly from reading legal jargon!

I'm so sorry for jumping right in and asking questions, I know that's annoying. But I'd truly appreciate any comments from people more experienced than myself. :)

The situation is slightly difficult to explain, so my apologies if this is a little long winded...

I'm about to enter the US on an O3 Visa, which I realise means I'm not authorised to work.

In the UK I'm a consultant. I have my own company; I'm employed by the company and also receive dividends on a quarterly basis.

I had intended to simply leave my status intact as an employee/director of the company, and simply not do any work. But, I'm concerned that leaving my status with the company intact might be considered "unauthorized employment" even if I wasn't actually doing work.

The other thing is that the company has a more passive income stream; we receive advertising revenue for providing ad space on a network of websites that we own.

This income stream requires no work from me whatsoever, but obviously it would still mean money coming into the business, which I had intended to draw as dividends whilst in the US.

I'm worried that this would be considered "unauthorized employment" too, even though I wouldn't actually be doing any work.

So my questions would be:

1) Am I allowed to remain the director of a UK company whilst in the US on my O3 visa? Or would I need to resign my position?
2) If I'm allowed to remain a director, am I allowed to draw dividends from the company whilst in the US, considering the money is earned in an entirely passive way and doesn't actually involve me doing any work?

Any input would be most grateful received and taken onboard! Of course, if no one has come across this situation before, thanks a lot for taking the time to read anyway! :)

Many thanks

Pete

Re: O3 Visa and Unauthorised Employment
 

It will not be so considered. No worries.


There is nothing wrong with that.


It will not be so considered. No worries.


Yes.


Yes.

Ian

Re: O3 Visa and Unauthorised Employment
 

Thanks very much for your reply, Ian. Very kind of you, and I really appreciate it!

Just wondering how far I can push my luck (both in terms of income, and asking questions)...

If I travel back to the UK from time to time, would I be allowed to engage on client contracts whilst I'm here, and then draw the dividends from the company whilst in the US?

I also forgot to mention, another passive income stream involves selling a book that I wrote via website/online ads. Is selling my intellectual property allowed whilst in the US?

Our lawyer is being very very cagey about these questions; they specialise in the O1 application (which was quickly approved, thankfully) but I don't think she seems particularly well informed about this stuff...

Already had plenty of questions answered by your good self, so if I'm taking up too much of your valuable time then please ignore! :-)

Thanks again

Pete

Re: O3 Visa and Unauthorised Employment
 

As long as you are physically inside the UK when you perform the work, you're fine. You can draw the income while you are in the USA, you just can't do the work.

Passive income is allowed, as long as you are not doing the work while physically inside the USA.

Rene

Re: O3 Visa and Unauthorised Employment
 

Thanks both for the responses, very much appreciated!

Next stop, figuring out US tax law! :)

Re: O3 Visa and Unauthorised Employment
 

Basically the US taxes on worldwide income but any foreign taxes paid on foreign income can be used as tax credits to offset US taxes owed on that income. With different sources of foreign income, you will likely need a tax accountant experienced in both US and UK tax laws. Many on BE use Peter Newton (a British Expat) who recently was accepting new clients after about a year of not accepting any. Even though he is in NY, many communicate via phone and email.

http://britishexpats.com/forum/member.php?u=13275

Re: O3 Visa and Unauthorised Employment
 

Thanks a lot for the info.

Hmmm sounds like it could get tricky.

My company pays corporation tax, but I'm not liable in the UK to pay any further tax on the dividends that go under the higher personal tax bracket.

I guess the corporation tax my company pays wouldn't count as tax credits; it's the company's tax technically, not mine even though I'm the sole director.

So, I wouldn't have too much credit I could use to offset the US tax. Sounds like I might end up getting taxed twice on the same money...

Re: O3 Visa and Unauthorised Employment
 

Generally if dividends are paid after corporate tax is paid, those are classified as qualified dividends in the US. Qualified dividends are taxed at a maximum of 15% for total incomes below $450,000 for married filing jointly and 20% above that amount.

However you may consider changing your company from a corporation to an LTD and then all income would be individually taxed in the UK and those tax credits could be used against US taxes owed.

In the US, it is generally advantageous to file married filing jointly over married filing separately since the marginal tax brackets are significantly lower. If you filed, married filing separately, you may possibly not pay any tax but your husband would likely pay significantly more.

I am not a tax accountant so just giving you some possibilities.

Re: O3 Visa and Unauthorised Employment
 

Thanks for the suggestion, Michael. Appreciated.

It's already an LTD, corporation tax is what an LTD pays in the UK.

I could start paying myself a wage from the company instead of distributing dividends, and these would be taxed at source. However, then I'd be back to worrying if that constitutes unauthorized employment. I'm thinking it would certainly look that way if my tax returns were examined if I wanted to change status in the future, even if technically I hadn't done any work on US soil.

I'll consult an expert and see what the options are, but I guess I might just have to swallow the double taxation...

I see you're in SF Bay by the way, looking forward to joining you there soon! :-)

Re: O3 Visa and Unauthorised Employment
 

I think he means LLC, but doesn't realise there is no LLC equivalent entity in the UK.

FWIW In the US, LLC income is absorbed directly into the tax returns of its owners, and so the LLC is completely transparent for tax purposes.

Re: O3 Visa and Unauthorised Employment
 

Bingo. I assumed that the UK had the equivalent of a LLC or S Corporation and thought that LTD was that equivalent. People setup a LLC or a S Corporation in the US to limit their personal liability but income is taxed as normal income. Now I realize that a C Corporation is similar to a LTD. They could also be a "Sole Proprietor" which doesn't limit liability.

I doubt that USCIS would care whether the income is paid direct or as dividends from a corporation as long as it doesn't constitute work in the US.