You may not see why, but that's you conveying your opinion based on common sense or your own reasoning vs the law.
The law says that your H1B via only covers you to receive income via your W2 employment with the company the visa is attached to.
If you are an H1B holder you can't be employed or contracted to work for another company in your home country/another country outside the USA because you would still be performing the work in the US and you are out of visa. Even if it's your own company.
If you put this income on your tax return you will be disclosing to the government you are working outside your visa. If you don't put this income on you tax return you are filing an incomplete tax return (and still working outside your visa).
The difference here from receiving investment or rental income from abroad (which you still have to include on your US tax return!) is that investment and rental income isn't 'work' covered by an employment visa.
A work visa is a permission to take a job out of the US employment pool, and the flaw in the law is that if you are working on your own company (inc side project) abroad, you are not really taking a job out of the US market because you wouldn't have hired anyone anyway. But it's a corner case and the law isn't built around corner cases.
(IANAL)
> A work visa is a permission to take a job out of the US employment pool, and the flaw in the law is that if you are working on your own company (inc side project) abroad, you are not really taking a job out of the US market because you wouldn't have hired anyone anyway.
Exactly. Hence 'I don't see why'. Not legal advice. An opinion that it's (assuming true) dumb. I don't see what the problem is with expressing that opinion on these 'opinion led forums'.
- Owning companies is totally fine. - Generating income from various sources is totally fine.
What is not allowed is: - You should not work in any capacity where an American citizen could have been gainfully employed. Lot of people mis-represent is that you can not get paid a salary, that is not true. Salary is just an evidence of you worked.
How many people structure this is the following. Partner with an American citizen and start the business. The American partner will hold 51% stake and you will be a passive investor with 49%. If you are married you can apply for H4EAD. You spouse has unconditional EAD and she can run the company.
Important note: This issue is only for people born in India. Everyone else can get their EAD/GC in an year or so.