The Ultimate Guide for Foreigners to Start a Business in the US
Starting a business in the USA can be tricky, especially when you are a foreigner. However, the good news is that more and more foreigners are setting up businesses in the USA. As a foreigner looking to set up a business in the US, there are several things that you need to consider.
Below is a step-by-step guide for incorporating your business as a non-citizen in the US
Step 1: Choose the State of Incorporation
Every state in the US has its business regulations and tax schedules. As a foreigner, you want to register your business in the state where you will be operating. However, if you consider registering an LLC for an online business, you may want to consider one with a low tax burden. States like Delaware, Nevada, and Wyoming are the states of choice for online investors since they have no income and sales tax.
Delaware is a state of choice for most foreigners who want to register their LLC. because it has corporate laws protecting business owners. What’s more, you won’t need a bank account or a physical address to incorporate your business in this state.
Besides, the Delaware corporate law website can be accessed in 10 languages, making it highly outsider-friendly. Nevertheless, the right state of organization or incorporation will depend on your unique needs and requirements.
Step 2: Register Your Company
- Choose Your Company Name
Once you pick the type of business entity and the state of incorporation, you now need to choose a unique name for your business. It is required that no two companies with the same name be incorporated in the same state.
Therefore, it is advisable to visit the US Patent and Trademark Office trademark database and ensure that the name you have chosen has not been trademarked. Besides ensuring that the name is available, it should end with LLC, Limited Liability Company, or LLC if you register an LLC
- Register Your Company
Next, you want to register your business with the state where:
- You intend to conduct business activities
- You hold regular meetings with clients
- Where your employees work
- The state where most of your company’s revenues come from
To register your non-resident-owned business as a legal entity, you will need to hire a state-registered agent to file and handle all the legal documents like articles of incorporation. The registered agent of your choice will also be responsible for receiving notices of important legal documents like state and lawsuit notices. The agent can be a trust, an individual, or another company. In some states, a company with a physical address in the state can act as the agent. You can also hire a professional company to act as your registered agent and get the incorporation done.
Step 3: File the Articles of Organization
To officially register your company with the state as a foreigner, you will need to file state documents, and this is where a registered agent comes in handy. A registered agent will help you file state documents like the Articles of Organization, also known as the Certificate of Incorporation.
This document outlines your company’s organizational structure by identifying the corporation name, the registered agent’s name and address, the shareholders or members’ names, and the incorporator’s name and mailing address.
Step 4: Get an Employer Identification Number
To set up a bank account for your non-resident-owned company, you will need an Employer Identification Number. This is the social security or tax file number given by the I.R.S. for business entities. Besides opening a bank account, an E.I.N. is also valuable for paying taxes, hiring workers, and getting a business license.
You can apply for an E.I.N. for free if you have an Individual Tax Identification Number (ITIN) or a US Social Security Number (SSN). However, if you don’t have these numbers, you can also use a virtual fax service to fill the Form SS-4 and get a return fax after about four weeks.
Step 5: Get a Physical Address
Similarly, you will need a physical address to open a bank account and undertake other services. To get a physical address, you will be required to set up an office in the state where you intend to do business. Nevertheless, you can still get a mailing address even if you conduct business online.
Step 6: Open a Bank Account
To open a US bank account for your business, you will need to visit the bank. This complies with the US money-laundering laws that require banks to know their clients. However, some banks like Mercury are nowadays offering digital services that are quick and easy.
With Mercury bank, non-US residents can open a bank account online if they have the proper documents. This bank is also a good option if you accept a lot of credit cash transactions. Do comprehensive research to find a bank that will suit your preferences and budgetary needs.
Do I need a business visa?
Unlike popular belief, you do not need a business visa to start a business or purchase another business in the US as a foreigner. However, you will need a visa if you plan to run your company within the US It is illegal to run a Limited Liability Company or corporation in the United States without a work visa.
There are different types of visas to consider depending on the state where you operate your business. For instance, you will need an E-2 visa if you don’t have an existing business outside the US and want to start one in the US On the other hand, you will need an L-1A visa if you have been running a business for at least one year outside the US You will also need four or more employees to get this visa.
Should a foreigner choose an LLC or a corporation?
There are two corporate entities that foreigners can choose from in the US. They include Limited Liability Companies, C-Corp, S-Corp, Partnerships, and Sole Proprietorships. Generally, LLCs and C-Corps are more attractive to foreigners that want to start a business in the US.
- Limited Liability Company (LLC)
In most cases, foreigners incorporate their businesses in the US as a Limited Liability Company. This is because LLCs protect its members and assets from personal liability in the event of a lawsuit or when the company incurs debt. Also, LLCs have no restriction regarding profit sharing between members.
Foreign business owners also incorporate their business using the C-Corporation structure. It can protect companies from I.R.S. involvement and offers unlimited stock to help with expansion.
Ultimately, setting up a business in the USA as a non-resident is possible if you want to conduct business in the USA. The laws for registering a business in the US may vary with the US state where you plan to set up your company. Nonetheless, the above basic steps and requirements can help you incorporate a non-citizen in the US.
comments powered by Disqus