Starting a business in the U.S. as a non-U.S. person involves several legal and logistical steps. Here’s an outline of the key steps you should follow:
1. Choose the Business Structure
Non-U.S. individuals can typically choose from several business structures:
- Limited Liability Company (LLC): The most common structure for non-U.S. entrepreneurs because of its simplicity, flexibility, and tax benefits.
- C Corporation: Suitable for those looking to raise capital through investors or go public in the future.
- Sole Proprietorship: Easier to set up, but it does not offer the liability protection that an LLC or corporation does.
Note:
- Non-U.S. residents cannot form an S Corporation, as this structure requires U.S. citizenship or permanent residency.
- Depending on the state, for certain professions, one may need to set up a Professional Limited Liability Company (PLLC) or Professional Service Corporation (PC) rather than an LLC or Corporation.
2. Select a U.S. State for Registration
Choose a state where you want to register your business. Popular choices for non-U.S. entrepreneurs are:
- Delaware: Known for business-friendly laws and regulations.
- Nevada: Known for its low fees and no state corporate income tax.
- Wyoming: Offers privacy protections for business owners.
However, if you plan to operate in a specific state (e.g., a brick-and-mortar store in California), you may need to register your business in that state.
3. Appoint a Registered Agent
Most U.S. states require a business registered in the state to appoint a registered agent to handle legal correspondence and accept service of process. A registered agent must be a resident or a business entity with a physical address in the state where your business is incorporated. Many non-residents hire registered agent services for this purpose.
4. Register Your Business
File the necessary paperwork to legally register your business with the state. The necessary paperwork and requirements will vary depending on the state and type of entity, however, the process typically requires:
- Providing the name of your business.
- Listing the registered agent.
- Paying a filing fee, which varies by state (ranging from $50 to $500).
5. Obtain an Employer Identification Number (EIN)
An Employer Identification Number (EIN) is like a social security number for your business. It’s issued by the Internal Revenue Service (IRS) and is required for:
- Opening a U.S. bank account.
- Filing taxes.
- Hiring employees.
You can apply for an EIN online via the IRS website. Non-U.S. citizens and residents can apply by mail or fax using Form SS-4.
6. Open a U.S. Bank Account
To operate your business, you’ll need a U.S. bank account to manage finances. Most U.S. banks require the following documents for non-U.S. residents:
- EIN.
- Passport or other government-issued ID.
- Proof of your business formation (e.g., Articles of Organization or Incorporation).
- Sometimes, you may need to visit the U.S. in person to open a business bank account, although certain banks offer international services.
7. Comply with U.S. Tax Requirements
As a non-U.S. business owner, you must comply with federal, state, and local tax obligations, which vary depending on your business structure:
- LLCs are pass-through entities, meaning profits and losses are passed to the owners and taxed on their personal returns.
- C Corporations are subject to corporate tax.
- You may also need to file a Foreign Bank and Financial Accounts (FBAR) if you hold foreign accounts.
You may want to consult a tax advisor to navigate international tax treaties and the U.S. tax system.
8. Obtain Necessary Business Licenses
Depending on your industry and location, you may need specific licenses or permits to operate legally. This could range from general business licenses to specialized permits (e.g., health permits for food businesses).
9. Secure Intellectual Property Protection
Consider registering your business name, logo, or other intellectual property with the U.S. Patent and Trademark Office (USPTO) to protect your brand. This step is crucial for safeguarding your business identity and assets in the U.S. market.
10. Submit a Business Ownership Information Report
In 2021, Congress passed the Corporate Transparency Act, which created a new beneficial ownership information reporting requirement. “Beneficial Ownership Information” (BOI) refers to identifying information about the individuals who directly or indirectly own or control a company. As regards reporting deadlines:
- A reporting company created or registered to do business before January 1, 2024 needs to file its BOI report by January 1, 2025.
- A reporting company created or registered in 2024 will have 90 calendar days to file after receiving actual or public notice that its creation or registration is effective.
A reporting company created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.
Key Considerations:
- Visa Requirements: If you plan to reside in the U.S. and operate the business directly, you may need an entrepreneur visa, such as the E-2 Visa, which allows individuals from treaty countries to invest and run a business in the U.S.
- Legal and Accounting Services: It’s highly recommended to consult with U.S. legal and tax professionals to ensure compliance with local laws and regulations.
By following these steps, non-U.S. persons can establish and run a business in the United States while ensuring they comply with all relevant legal and tax requirements.
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