Is It Illegal for an Undocumented Immigrant to Start a U.S. Business?

Legal concerns when illegal immigrants work for themselves rather than for a U.S. employer.


I'm in the U.S. with no immigration papers, and have been helping my aunt in her restaurant. Now I'd like to branch out on my own, with a food truck. How much legal trouble will this get me into?


Welcome to one of the great unresolved questions of immigration law. You're asking the same question as thousands of other undocumented business owners probably did. Many of them went ahead and started businesses anyway; and have, for the most part, encountered few barriers from government regulators, banks and institutional lenders, or even the immigration enforcement authorities.

Here's the deal: U.S. immigration law (which is federal, meaning it's followed throughout the country), does not say anywhere that an undocumented immigrant is barred from owning a business. The law makes being in the U.S. without permission unlawful by itself, of course; this act is punishable by deportation and various bars on return to the U.S. after removal or other departure. But there have been cases where an undocumented person was caught in the U.S. and business ownership was actually viewed as a point in their favor when defending against deportation.

The law also makes it illegal for someone to employ an undocumented worker. This comes from the Immigration Reform and Control Act, or IRCA (found at 8 U.S. Code § 1324a.) Businesses that hire undocumented workers may be sanctioned with fines, asset forfeitures, and in instances of repeated violations, criminal arrest.

Yet U.S. enforcement authorities have apparently not tried to use this section of IRCA to argue that a business owner is employing him- or herself. (Still, it could happen.)

The bottom line is that no lawyer can confidently tell you that it is illegal to start a business if you are an undocumented person in the U.S.; and by the same token, no lawyer can advise you to go ahead and do so. (That shouldn't stop you from consulting a lawyer to find out the latest word on this matter, however, and whether you might have other options to regularize your immigration status.)

Whatever you do, make sure to abide by other U.S. laws governing small businesses, such as those regarding permits, health codes, labor laws, and so forth. See these articles on "Small Business" for more information.

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