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View Full Version : Helping a foreign company with credit card processing while I'm on H1B


lok
01-16-2011, 03:04 PM
I have a friend in South Asia who wants to accept credit card payments for his website. There is no way for him to link paypal or any payment gateway to his bank account. I'm in the US with an H1B and I know i'm not allowed to start a business or even have a merchant account since this qualifies as active investing.

Is there anyway I can help him? I'm not interested in making any money off of this.
I know I could open a paypal account and point it to my bank account. That way, as long as the transactions are < $20000/yr , it won't be reported to the IRS and all I have to do is pay tax on the interest from my bank account. What could be potential problems with this approach? If this is illegal, I would refrain from doing it.

Can someone suggest a better way? My friend is willing to pay part of the transaction fees to whatever service he has to use.

ras
01-31-2011, 08:27 PM
I am no expert but based on my understanding on this.

1. Your friend can associate with one of the companies in USA and have an agreement so that the money gets paid to the US Company and then transferred to Indian company/individual. The US company pays tax for the payments received.

2. You can direct the online payments to your bank account via paypal or other methods and then transfer the money to your friend. No need of merchant account. However, you need to report this as an additional income on your W2 or similar and then pay taxes.

3. You can register a small business and then associate with your friend in India. All the payments will be made to your US company and then paid as services / product fee to your friend in India. (Info about starting the Business in USA can be found at Immigration Voice Starting a Business wiki (http://immigrationvoice.org/wiki/index.php/Starting_a_Business))

I am not sure there could be other ways, but these are some of the obvious ones.