Ok Customer (name blocked for privacy),

Let me deal with the treaty trader/investor (E Visa) later.

Lets deal with your business activities in the UK.

1. Your business in the UK is to act as an intermediary or business broker for Eastern European Companies and U.S. Companies. You are providing the liaison and gateway to business. This is a legitimate business activity. You do not have to have board meetings as long as you are organized as a business to operate in the UK. Like GlobespanVirata, all you need is an address, and phone number, and to incorporate as an Ltd or other entity.

2. Of course, no company can exist without at least one employee, either you or you and one other person. My recommendation is to hire one person to by your VP of international business operations and company Operations Officer. You would be the President and Founder. If your corporation is not a publicly held entity, it does not require a board of directors. Hence no board meetings would be required. However, like in the U.S., you may need a corporate agent. In any regard, the accountant was being very subjective that in order to show you had a legitimate business in the UK, business activities and board meetings, etc had to be going on. Brokering business relationships and providing gateway services are legitimate business activities.

By incorporating and establishing a business address with bank accounts, you are conducting legitimate business activities, according to the description of the services you provide.

2. Your business appears to be operating out of the UK. Technically, if you are the only person in the company, you are operating out of the U.S. You are lucky in that you are employed by the U.S. company who is sponsoring you on a H-1B visa.

As we go through this, I see a red flag: Because you are the only employee. When you clarified that you were sending money from the U.S. to the UK Business Bank Account, it dawned on me what the accountant might have been focusing on. You are the only employee of your company. By brokering business in the united states, and sending it to the UK bank account, you could be considered to be working for the UK company. However, this is only a red flag. Since you are here on an H-1B visa, you are brokering for your employer to choose the best course of action for your employer, which happens to be your own UK company. I would like to see you diffuse this in the following way:

1. Hire a UK employee, as the VP of your International Operations.
2. When ever a service is done for you present company, have the UK Company VP bill the U.S. Company directly. You should not handle the money or the billing.
3. Let the US Company ACCOUNTS PAYABLE department to arrange for payment by what ever means they can: Bank Draft, Money Transfer, etc to the UK Company.
4. If contracts are to be signed, you can sign them, but sign them from your position title and function with the U.S. Company and have the UK Company VP sign as the UK Company representative.
5. When you put the VP in place, make sure you write a memo to him, putting him in charge of your total operations during your absence as an employee of XYZ company in the United States.

What you are doing is divorcing yourself from official duties of your UK Company, so that you can be free to legitimately act as an employee of the U.S. Company, and not be in jeopardy of your H-1B Visa.

I like the idea of the shareholders who are corporate partners or employees in Europe/UK

3. If you have a UK company, you need to operate it under the requirements of the UK. I am not worried about the IRS, except to the extent that your business activities in the U.S. will be taxed as a foreign entity. As long as you have a company that is legally formed and recognized in your home country, then the IRS will recognize it. If the UK does not require 4 meetings from a board of directors, then the IRS accepts that on its surface.

4. The IRS will tax your personal income from your U.S. employer as regular income,most likely as a non-resident or resident alien. If you are conducting business activities on the side, you would be taxed as a foreign government doing business in the U.S. This is why I made the recommendations I did with the bold italics above. The deal is, to have your immigration status match your tax status. While the IRS will n ot get involved with this, you are not allowed to be self employed on an H-1B visa, by the strictest definition of the law. Many people do moon light however, despite the law. As a consultant, I cannot advice you to violate not only the letter of the law, but the spirit and intent as well.

CAUTION: where ever your president or VP is operating from for the UK company, all business activity needs to be happening from the UK headquarters. There has to be an address, bank account, and some one operating out of that office. That address and phone number needs to be on the letter head and be the originating place for contracts, agreements, receipts, and the destination of all payments. (the phones can be set to ring through to anywhere in the world).

Summary:

1. You need to organize your business in the UK so that it is a legitimate legal entity operating out of the UK.

2. As long as your business is legally established and recognized in the UK, then the IRS will have no issue with regard to the business.

3. While on an H-1B visa, and employed by the U.S. Company who is also a client of your UK company, you need to take yourself out of the approval, billing, and payment cycle. In addition from the tax perspective, you need to avoid handling or doing business activities for the UK company. However, you can continue to broker deals representing your employer, even with your UK company.

4. You need to appoint some directors and VP's of international operations, business operation, etc. It really only takes a couple of people.

TREATY INVESTOR OR E-VISA:

You do not have to already own a company. That you do is a good thing. You do have to agree to start a company and conduct business in the United States. Said business needs to be legitimate and you have to have a reasonable expectation of being successful. While there is no specific monetary guide, the most successful E-Visas are those that invest between 250,000 and 500,000 into the business venture. However, some people with as little as 25,000 have started legitimate businesses as E-Visa holders and succeeded. The language in the regulations is merely states, that sufficient resources must be on hand to guarantee a reasonable expectation of success and profit. The amount will vary depending on your business plan. (You have to have a business plan).

You can read more about the treaty visa at:

http://www.mnllp.com/engEvisaEvisadetails.html