Many foreign entrepreneurs dream about starting a business in the United States because of its strong economy and market demand. I know you are wondering how can I open a business in the U.S. if I don’t have a visa to visit the country. But don’t worry; visiting the U.S. to see the business opportunities is ideal, but you do not need to be present in the country to do business here. You need to learn about these opportunities and how U.S. rules will affect you. We are sharing some information so you can start planning your business in the U.S.:
1. Choose Your Business Structure
As a non-resident, you have two main options: a C Corporation and a Limited Liability Company (LLC).
C Corporations
A C Corporation is a separate legal entity from the shareholders, which means that your assets are protected from the actions and debts of the company. Likewise, profits and losses are only attributable to the corporation.
Investors prefer the C Corporation business structure, which is good to know if you think you may plan to expand and need an injection of outside money.
Limited Liability Companies (LLCs)
LLCs are similar to the C Corporation in terms of liability protection but less strict regarding compliance requirements. As a member of an LLC, you can choose whether you want it to be taxed as a C Corporation or pass-through profits and losses to you as an owner.
2. Choose the State for Formation
Since you are a non-resident, you can file your business entity anywhere in the United States. For instance, Florida is a good option because it has no personal income tax, a 5.5 percent corporate tax rate, and no payroll taxes. That can be a game changer if you are starting up your or an established business looking to leave a high-tax state.
3. Find a Registered Agent
A registered agent is a person or company officially recognized by the state in which you incorporate to accept service of process on behalf of the company.
Because you do not reside in the United States, having representation stateside to deal with legal paperwork such as service of process notices, correspondence from the Secretary of State, and other official government notifications can be beneficial. Your registered agent can also ensure you obtain and renew business licenses and stay on top of compliance deadlines.
4. Apply for a Tax Identification Number
All businesses in the U.S. are required to have a Taxpayer Identification Number called Employer Identification Number (EIN). You will probably need to get an Individual Taxpayer Identification Number (ITIN) if you are required to file tax returns in the U.S.
An EIN is obtained online by mailing or faxing a form SS4 (Application for Employer Identification Number (EIN) to the IRS. Also, An ITIN is a tax processing number only available for a certain non-resident who cannot get a Social Security Number (SSN). To obtain an ITIN, you must complete IRS Form W-7, the Internal Revenue Service (IRS) application for Individual Taxpayer Identification Number. The Form W-7 requires documentation substantiating each individual’s foreign/alien status and true identity.
5. Open a Business Bank Account
A bank account based in the U.S. is needed to complete the process of starting your own business.
The easier way to open a bank account is in person, but some branches of the same bank allow you to do it online from anywhere. Usually, the documents that they require are: your official corporation documents, a U.S. address, an EIN (Employer Identification Number), and a passport.
6. Maintain Business Compliance
In the United States, you must file an annual report yearly, whether you have a C Corporation or an LLC. The annual report keeps the information about your company updated and needs to be presented to the owners with a description of any operations and financial conditions.
Even as a non-resident business owner, you will be required by the IRS to pay taxes on the income earned in the U.S. You may also be required to pay an annual fee to the state where your business is incorporated.
If you already have your business in Florida, remember that the Annual Report must be filed by May 1, 2023.
We are here to help
Starting a business in another country can seem like a complicated task, and as a non-resident, you will face some additional obstacles, but it’s possible. At Legacy Counsel, we have qualified professionals that will help guide you through the process and serve as your Register Agent. If you want to know more about this, schedule a 15-minute free call and resolve all your doubts.
