Can a student with an F1 visa own a corporation taxed as an S-Corp?

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If you are an international student in the U.S. and are wondering if you can start your own company, the good news is that you can, with only a few limitations when it comes to how the company is taxed. 

U.S. citizens or permanent residents have the legal right to own any kind of business. By default, a Limited Liability Corporation (LLC) is taxed as a disregarded entity, but an LLC can also elect to be taxed as a C-Corp or S-Corp. On the other hand, a corporation is by default taxed as a C-Corp, but can elect to be taxed as an S-Corp.


International students can generally own a business taxed as a disregarded entity or a corporation taxed as a C-Corp with no problem, as long as they do not exceed the legal restriction of a 20-hour work week if they are working for their own company. Now, it gets a little trickier when it comes to an international student owning a corporation taxed as an S-corp.

How can an international student with an F1 visa own a corporation taxed as an S-Corp?

A business with the elected tax status of an S-Corp offers the benefits of having the protection of an LLC by allowing a company with less than 100 shareholders to be taxed as a partnership, basically avoiding the double corporate tax. 

A student with an F1 visa can own a business taxed as an S-Corp if they either: (1) become a permanent resident with a green card or (2) meet the requirements for establishing a substantial presence in the United States.

  1. Permanent Resident in the U.S.

Any individual who is a permanent resident with a green card can own a corporation taxed as an S-Corp. Once a student with an F1 visa obtains a green card, they are no longer an “alien” and therefore, for taxation purposes, there are no restrictions. This status in the U.S. gives the student a legal right to own a business taxed in any way.

2. Substantial Presence in the U.S.

Establishing a substantial presence in the U.S. can be met by going through the requirements set out by 26 CFR § 301.7701(b)-1. It is stated that an alien individual satisfies the substantial presence test if they have been present in the U.S. for at least 183 days during a three (3) year period that includes the current year. The days are determined as follows: (a) Each day of presence in the current year is counted as a full day; (b) any day of presence in the first preceding year is counted as one-third of a day; and (c) any day of presence in the second preceding year is counted as one-sixth of the day.

This substantial presence needs to be established every year to maintain the benefits of an S-Corp or the international student can become a permanent resident with a green card.

Although there are a few limitations, if you are an international student with a vision or dream to start your own company, there are several ways in which you can achieve your goal.

EPGD Business Law is located in beautiful Coral Gables. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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Eric Gros-Dubois

Founding partner Eric Gros-Dubois established EPGD Business Law in 2013. With over a decade of experience expanding the firm and leading it to its current success, Eric now primarily manages the corporate division of EPGD. Given Eric’s educational background, holding both a JD and MBA, combined with his own unique experience of starting a business from scratch and growing it to a multi-million dollar firm, he brings a specialized and invaluable perspective to those seeking legal assistance for themselves and their businesses. Having now instilled his same values in our team of skilled corporate associates, Eric leads a firm that is always ready, willing, and equipped to handle any and every legal matter that a business owner may have.

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