The TN visa limits you be employed in the specific position and to work for the petitioning employer for the time period issued, which is usually one year. If you do anything other than what you entered the U.S. to do, you can be considered to have violated the terms of your TN visa.
The USCIS has broad discretion, but not always all of the information to take action. Although some visa violations may be forgiven in limited situation, others are not. Before you take action and spend money on an action that may prove not in your best interests, you should schedule an appointment with an experienced immigration attorney.
Perhaps, there are facts that were not presented that may result in a more favorable answer. However, attorneys need to know more facts that the complete situation will take time for an experienced attorney to appreciate and understand.
The above is general information not meant to be legal advice.
I can answer the immigration part of your question "I am a Canadian Citizen living in the US on a TN Visa (3yr). Can I start my own business in the US?"
Yes, you can start a business while on your TN if it will be a passive investment.
If you want to actively manage the business, or work through it in the U.S., you will need to get another TN for that work. (Canadians can have more than one TN at a time. You cannot, however, have a TN *and* another permit---such as an L, H or E---at the same time.)
When adding another TN for your own company, a common obstacle is the “self-employment ban”.
The rule is that self-employed people cannot use the TN. Many Canadians see this rule and give up.
Do not give up yet!
The rule does not prohibit self-employment if you will be self-employed while in a contract with another company. You could not be a controlling owner of this other company. The company would then be the “sponsor” and sign your TN company supporting letter. To summarize, you can be self-employed and working for a business you own, if:
-you or your business are performing services for another entity you do not control, and
-that entity is your TN “sponsor”, i.e., provides a company supporting letter and appears on the rear of your form I-94.
A government advisory opinion spells this out, as do the regulations:
“It should be noted that the bar on establishment of a business or practice in which the… citizen will be self-employed is in no way intended to limit a Canadian…citizen who is self-employed abroad from entering this country in, changing status to, or extending nonimmigrant stay in, TN classification pursuant to a prearranged agreement with a third party that is not substantively the same as, or de facto controlled by, the alien. On the other hand, a Canadian… citizen is precluded from entering this country in TN classification for the purpose of rendering pre-arranged services for a U.S. corporation or entity of which he or she is the sole or controlling shareholder or owner.”
For more information, see “Grasmick’s TN Handbook for Canadians: How to Live and Work in the U.S. Under NAFTA,” “The TN is OK for self-employed, if . . .” page 216 ( http://www.grasmick.com/handbook.htm )
Does this answer the immigration part of your question satisfactorily?
JOSEPH C. GRASMICK, Lawyer
U.S. Business Immigration for Canadians
300 International Drive
Williamsville, NY 14221 U.S.A.
Phone: (716) 842-3100
Website: Canada to U.S. Business Immigration
Author of "Grasmick’s TN Handbook for Canadians---How to Work in the U.S. Under NAFTA": http://www.grasmick.com/handbook.htm