How to Register a US Business for Non-Residents: Steps to Start a Corporation or LLC From Outside the US

What are the different types of entities you can form as a non-resident?

1. Corporation

A corporation formed as a non-resident is a legal entity, separate from its owners and shareholders, and is used to conduct business activities and enter into contracts on behalf of the company. The main advantages of forming a corporation as a non-resident is that it offers protection to its owners and shareholders from personal liability, allows for unlimited stock to attract investors, and can provide tax benefits. However, there is a downside to forming a corporation as a non-resident in the form of double taxation, where the corporation pays taxes on its profits and the individual shareholders pay taxes on the dividend income they receive from the business. Additionally, there are additional paperwork and deadlines required to stay in compliance as a corporation. Non-resident corporations must also file a certificate of incorporation with the Secretary of State in the state of their choice.

2. Limited Liability Company

A Limited Liability Company (LLC) is a formal legal structure that separates personal assets from company debts, providing protection from liability during litigation. This type of entity is favored by small businesses due to this and other advantages, such as not being required to use personal assets to cover company debts. An LLC is composed of at least one member, who is not necessarily a natural person, and is taxed as either a C Corporation or pass-through profits and losses to the owners.

In certain states, a date for the automatic dissolution of the LLC may have to be specified, and LLC members may also have to decide to either dissolve the LLC or vote to continue, should one of their members pass away, declare bankruptcy, or encounter a calamity.

If an LLC possesses more than two of the four characteristics of a corporation – centralized management, limited liability, ownership transfer capacity, and continuity of life – then the LLC becomes a corporation and corporate taxation will apply.

For non-residents, the U.S. offers different ways to structure a company that meet their needs. These include the LLC, Partnership or Limited Liability Partnership (LLP), and the C Corporation. The LLC is the most popular option, due to its protection from liability and relative simplicity. An LLP is a formal legal structure that includes a partnership agreement outlining responsibilities and liabilities and designates a managing partner who is liable for the actions of the partnership. Lastly, C Corporations are used for large businesses that seek to attract venture capital.

3. Partnership

A partnership is a business structure composed of two or more persons who share the responsibility of running a business for profit. These persons share the profits and losses, and have joint and several liability for debts of the partnership. Partnerships are relatively inexpensive to set up, and the three kinds of partnerships are general partnerships, limited partnerships, and joint ventures. Non-residents can also create a limited liability company (LLC) as a business structure, which has features of both a partnership and a corporation. An LLC has at least one member – which may or may not be a natural person – and provides protection from liability during litigation. LLCs can be as complex or simple as the members prefer and tax management and levying is similar to a partnership.

4. Sole Proprietorship

5. Corporation of the United States

A corporation formed under U.S. law as a non-resident is legally considered to be a legal person and is consequently allowed to enter into contracts, bear liabilities, and take legal action, as well as be held liable for any legal proceedings. This entity offers excellent liability protection from any potential bankruptcies or lawsuits as well as the ability to select the best state to form your company’s business entity. Depending on the company’s home country, the laws of that country may determine the choice of legal structure. It’s important to consult with an attorney familiar with both U.S. and international law prior to making any decisions.

6. Subsidiary Company

A subsidiary company is a legal entity established by a foreign company to conduct business in the United States. Non-resident entities are typically structured as either a Limited Liability Company (LLC) or a Corporation (C-Corp). LLCs provide protection from liability during litigation and personal assets from company debts. C-Corporations provide clear definitions of taxation, governance, and compliance rules, and are often attractive to investors. Both LLCs and C-Corporations offer excellent liability protection and the ability to expand the business by offering unlimited stock.

The main characteristics of a non-resident entity include:

1. Limited Liability Company (LLC): Provides protection from liability during litigation and personal assets from company debts.
2. Corporation (C-Corp): Provides clear definitions of taxation, governance, and compliance rules, as well as the ability to expand the business by offering unlimited stock.
3. Partnerships or Limited Liability Partnerships (LLP): Includes a partnership agreement outlining responsibilities and liabilities with a designated managing partner liable for the actions of the partnership.
4. S-Corporations: Exclusive to citizens and permanent residents and offers double taxation protection through careful tax planning.

7. Foreign Corporation

A foreign corporation is a business entity established by a foreign entity or individual outside of their own country. It is similar to a domestic corporation in that it is a separate legal entity from its owners and is subject to taxation, but it differs in that it is governed by the laws of the country in which it is established. Foreign corporations typically offer the same benefits to foreign investors as domestic corporations, such as limited liability protection, ownership flexibility, and access to capital.

The two primary choices of business structure for non-resident entities are the C Corporation and Limited Liability Company (LLC). The C Corporation offers the ability to expand by offering unlimited stock and protection from close IRS involvement, although profits are taxed twice. The LLC offers liability protection from any potential bankruptcies or lawsuits. Both entities are established by selecting a state in which to establish the business and to submit the required formation paperwork usually to an office known as the Secretary of State.

Additional benefits of foreign corporations include the ability to offer stock options to attract investors, the ability to create employee benefit plans, the ability to raise capital by issuing stock and debt, the ability to conduct business operations in multiple countries, and the ability to form strategic partnerships and alliances with other businesses. Additionally, foreign corporations may be able to take advantage of certain tax benefits, such as the Business Tax Credit, which allows corporations to deduct certain expenses associated with operating their business.

What are the steps to starting a business in the US as a non-resident?

Step 1: Decide how to form your LLC

Forming an LLC as a Non-Resident of the United States requires a few extra steps to ensure compliance with state and federal regulations. Here are the necessary steps to form an LLC when you’re a non-resident:

1. Choose a state for your LLC.
2. Select a unique name for your LLC that follows the state’s naming regulations.
3. Hire a registered agent service.
4. File your LLC documents with the state.
5. Create an LLC operating agreement.
6. Obtain an Employer Identification Number (EIN) from the IRS.
7. Get a physical US mailing address.
8. Visit the US and open a US bank account.
9. Prepare and file US tax forms, such as Form 5472.

Following these steps will ensure that your LLC is legally established and ready to conduct business in the US. Keep in mind that forming an LLC does not guarantee any visas to work in the US.

Step 2: Choose the state for formation

Choosing the right state for business formation in the US as a non-resident is a critical step in setting up a business. Here are the steps for making the decision:

1. Determine if you are a non-resident or have a real estate LLC and need an alternative to the “home state rule.”
2. Consider the benefits of choosing a state other than your home state. Delaware offers anonymity, while Wyoming allows the business owner to list a “nominee” as the owner of the LLC other than their own name.
3. Consider all other factors, such as demographics, access to supply chain and markets, competition, state laws and taxes, to determine the most cost-effective location.
4. Connect with a U.S. attorney to help you with the registration process.
5. File your Articles of Organization or Certificate of Formation with the state.
6. Prepare LLC Operating Agreement or Bylaws for Corporation if necessary.
7. Obtain an EIN from the IRS.
8. Get a US address for your company.
9. Open a US business banking account.
10. Apply for an ITIN if necessary.

Step 3: Selecting a business entity type

For non-residents setting up a business in the US, the steps for selecting a business entity type are as follows:

1. Decide on a business structure. The most common forms of business entity are partnerships, limited liability companies or LLCs, and corporations.
2. Choose a unique name for your LLC or C Corporation.
3. Hire a registered agent service.
4. File for incorporation with the state.
5. Get an employer identification number (EIN).
6. Obtain a physical U.S. mailing address.
7. Set up a U.S. bank account.

Step 4: Applying for an EIN (Employer Identification Number)

As a non-resident interested in setting up a business in the US, you’ll need to apply for an EIN (Employer Identification Number). This is an essential step to open a bank account, pay taxes, or get a business license. Fortunately, the application process is straightforward and can be done for free.

First, you must determine whether you have a valid Taxpayer Identification Number (TIN) such as a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). If so, you can apply for an EIN online. Simply visit the IRS website and fill out the online form.

If you don’t have an SSN or ITIN, the process can take longer. You’ll need to fill out the Form SS-4 and submit it to the IRS via fax or mail. It usually takes 20-45 days to get a response from the IRS. If you need the EIN faster, there are services such as Startfleet.io Express EIN that can help you get your number in five to eight business days.

Once you have your EIN, you should compare various banks to find the one that meets your specific needs. Consider factors such as rewards, access to brick-and-mortar and online services, the convenience of making cash deposits, and interest rates on your deposits.

Applying for an EIN is an important step for non-residents looking to do business in the US. Follow these steps to get your EIN quickly and easily.

Step 5: Obtaining a physical business address

If you are a non-resident starting a business in the US, obtaining a physical business address is an important step. Here are the steps you need to take to get a physical business address when starting a business in the US as a non-resident:

1. Establish a physical office in the state where you have registered your LLC. If you don’t plan to rent a physical office space, you can rent virtual mailbox services where they’ll receive and scan mails on your behalf.
2. Make sure that the address is not flagged as a CMRA address. Commercial Mail Receiving Agencies (CMRA) are companies that rent out virtual mailbox addresses that receive mail from the Postal service on behalf of third parties.
3. Sign up for a physical street address. There are a number of services available, such as Traveling Mailbox, VirtualPost Mail, Earth Class Mail and doola, that provide US mailing addresses as part of their package.
4. Use Globalfy’s Virtual Address service if you don’t have access to a physical business address. This will allow you to register their mailroom as your business address and get your mail shipped to your country.

Once you have obtained a physical business address, you can use it to receive mail, such as IRS paperwork or credit cards, and also to open a US bank account, if required.

Step 6: Setting up a business bank account in the US

Setting up a business bank account in the US as a non-resident can be an intimidating process, but with the right guidance, it doesn’t have to be. Here is a step-by-step guide to help you get started:

1. Incorporate your business in the US: You will need to register your business with the IRS and your state.
2. Obtain an Employer Identification Number (EIN): This is a nine-digit number issued by the IRS that identifies your business for tax purposes.
3. Gather your documents: You will need your business’s Articles of Organization, a US address, your EIN, and proof of identification.
4. Find a bank: You will need to research online banking platforms that are available to you as a non-resident. Make sure to review their application requirements and fees before making a decision.
5. Submit your application: Once you have found a bank that meets your needs, you will need to complete the application process.
6. Monitor your account: Once your application has been approved, you will need to monitor your account to ensure that it remains in good standing.

Following these steps can help you open a US business bank account as a non-resident. With the right preparation and guidance, you can open a bank account without any hassle.

Step 7: Getting a virtual or physical US address

Step 8: Obtain required licenses and permits

Starting a business in the US as a non-resident requires a few steps to ensure you are in compliance with the laws in the state where you are setting up your business. Here is a step-by-step guide to get your business up and running:

1. Choose a unique name for your LLC or C Corp. This name should be unique and not already registered in the US. You can check the US Patent and Trademark Office’s trademark database to make sure your name is not taken.
2. Hire a registered agent service. A registered agent is responsible for receiving the company’s legal documents.
3. File for incorporation with the state. This involves filling out a certificate of incorporation, which outlines the company’s name, the address of you or your company’s agent, the value of authorized shares, and the name and legal address of the incorporator. The fee for filing the certificate of incorporation starts at $89 and increases based on the amount of stock issued or raised capital.
4. Get an employer identification number (EIN). This will allow you to hire employees, open a bank account, pay taxes, and obtain whatever licenses you need. You can apply for an EIN online for free with the IRS or by mail or fax if you or the company’s principal officer do not already have a Taxpayer Identification Number.
5. Obtain a physical US mailing address. This will be the official address of your business.
6. Set up a US bank account. You’ll need this to accept payments from customers and pay suppliers and employees.
7. Learn about the licenses and permits required for your business. These may include state licenses related to the industry your business is in, as well as local licenses and permits that may be required by the county or city where your office or business is located.

Finally, make sure to stay in compliance with all reporting rules and pay the required fees. Failure to do so can result in fines, penalties, loss of owners’ personal liability protection, and even suspension or dissolution of the business.

Follow these steps and you’ll be on your way to starting a successful business in the US as a non-resident.

Step 9: Apply for an EIN (Individual Taxpayer Identification Number) as a non-resident

As a non-resident, one of the first steps you need to take to use your US business is to apply for an EIN (Employer Identification Number) from the Internal Revenue Service (IRS).

To apply for an EIN, you will need to complete and submit IRS Form SS-4 Application for Employer Identification Number. You can submit this form either by fax or mail.

Fax: If you would like to file for an EIN yourself, then filling out, signing, and faxing IRS Form SS-4 is the fastest option, typically taking up to one week to receive a reply. Make sure to enter “None – Foreign” or similar wording on line 7b, to designate that you are a non-resident filing for a US EIN. You can find the fax numbers used by the IRS to file Form SS-4 depending on the location of your business’s principal office or agency (or your primary residence) within or outside of the US.

Mail: Filing Form SS-4 by mail is similar to filing by fax, in that you will fill out, sign, and send the completed form to the IRS. This option, however, takes a much longer time, typically up to four to five weeks to receive the EIN. The IRS address and attn designations for your submission will also depend on if your office, agency, or primary residence is based outside of the US.

In addition, you may also need to apply for an Individual Taxpayer Identification Number (ITIN) if you don’t already have one. To do this, you will need to complete IRS Form W-7, with documentation that confirms your identity (such as a driver’s license or birth certificate) and your connection to a foreign country (e.g. passport).

Once you have obtained your EIN, you can then apply for bank accounts, merchant accounts for payment processing, loan applications, or a Shopify or Amazon FBA Seller Central account.

It is important to note that all of these steps must be completed legally, and vendors should not use the SSN of a US resident to act as the Responsible Party of your company, as required by the IRS.

FAQs

What are the steps to register a US business for non-residents?

Step 1: Decide on the Legal Structure and the State for Your Company

The first step to register a company in the US as a non-resident is to decide on the legal structure and the state for your business. You may want to consider registering in Delaware, Nevada or Wyoming where the taxes and/or regulatory compliance is lower than the rest of the states.

Step 2: Name Your Company

Once you have decided on the legal structure and the state for your business, you need to decide on a unique name for your company. Make sure you have a name that is not already taken and meets the requirements of the state you are registering in.

Step 3: Choose a Registered Agent

The next step is to choose a registered agent. Most states require a designated “registered agent” who is a resident of the state. This is a person or entity in charge of receiving official mail and service of process (tax and legal information) on behalf of your company.

Step 4: Submit Certificate of Incorporation or Articles of Organization

Abide by the procedure in the state you are registering your company. The typical basic requirements include the name of the company, shareholders’ or members’ names, and your registered agent’s name and address. Submit the Certificate of Incorporation or the Articles of Organization depending on the legal structure you have chosen.

Step 5: Acquire Necessary Visas

You can start a business in the US even if you are not planning to visit the country or you don’t have a visa. However, if you do not have a valid work visa, the federal government may disallow you from operating an LLC from another country. American laws allow foreigners to be a director and/or shareholder of American corporations. However, a visa is required for someone to be an officer and perform any responsibilities in the US.

What types of businesses can be registered in the US?

Businesses in the U.S. can be registered under various legal structures, each of which offers its own set of distinct benefits. The most popular business entities for non-resident registration in the U.S. are C-Corporations, S-Corporations, Limited Liability Companies (LLCs), Partnerships, and Sole Proprietorships.

C-Corporations are the most common type of corporate entity in the U.S., and are not restricted in terms of foreign ownership. They offer limited liability to the owners, and allow for the possibility of raising capital through stockholder investments.

S-Corporations are similar to C-Corporations, but are taxed differently and allow for the possibility of pass-through taxation. This can be beneficial for foreign companies looking to avoid double taxation on their profits.

Limited Liability Companies (LLCs) are the most popular choice among foreign small business owners wanting to establish their business in the USA. They offer limited liability to the owners and are not restricted in terms of foreign ownership.

Partnerships and Sole Proprietorships are less popular than LLCs or C-Corps, as they do not offer the same level of liability protection for the owners.

If you are seeking venture capital, a C-Corporation formed in Delaware may be the best choice, as it is the most popular among startups looking for investors.

What are the filing requirements for registering a business in the US?

Registering a business in the US requires a few steps to ensure compliance with federal and state guidelines. Here is a step-by-step guide to getting your business up and running in the US:

1. Choose a unique name and search the US Patent and Trademark Office’s trademark database to make sure it hasn’t been registered before.
2. Name or appoint an agent to receive legal documents.
3. Fill out a certificate of incorporation. This document includes information on the company name, address of the agent, value of authorized shares, and name and address of the incorporator. The fee for filing the certificate of incorporation starts at $89.
4. File an incorporation report and pay the franchise tax.
5. Obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). You’ll need the EIN to hire employees, open a bank account, pay taxes, and obtain licenses.
6. File an annual report each year, whether you’ve formed a C Corporation or an LLC. This document keeps the information on file for your business current.
7. Pay all applicable taxes on income earned in the US.
8. Renew licenses and permits, and hold shareholder meetings if required.

By following these steps, you can start and run a business in the US from overseas.

Do non-residents need to obtain any special visas to register a business in the US?

What documents are required to register a business in the US?

What documents are required to register a business in the US? [Step-by-step instructions]

Step 1: Choose a unique business name and obtain a registered agent. Make sure to search the US Patent and Trademark Office’s trademark database to ensure that your chosen name is available.

Step 2: File the appropriate documents with the state. If you are registering a C Corporation, you will need to file a Certificate of Incorporation or Articles of Organization. On the other hand, for an LLC, you will need to file Articles of Organization or Articles of Formation. Additionally, you will need to provide an Operating Agreement and LLC Membership Certificate.

Step 3: Obtain an Employer Identification Number (EIN). You can apply for an EIN online for free with the IRS. However, you or the company’s principal officer must already have obtained a Taxpayer Identification Number. If neither of you have, you will need to apply by mail or fax.

Step 4: Open a business bank account. In order to do so, you will need to provide paperwork such as business formation documents, a legal address, your EIN, and proof of identity.

Step 5: Pay taxes and file tax returns on time. It’s important to do this in order to avoid fines and penalties and also to avoid the dissolution of the business.

Step 6: Perform other regular business maintenance tasks. This may include submitting an annual report, paying fees, renewing licenses and permits, and holding shareholder meetings, depending on the individual requirements of the state where the business was formed.

What is the taxation requirement for registering a business in the US?

The taxation requirement for registering a business in the United States depends on the type of business entity you are forming. Generally, you will need to file an annual report for your business, whether it is a C Corporation or an LLC. You may also be required to pay annual fees to the state where your business is incorporated. Additionally, you will need to obtain an employer identification number (EIN) from the IRS in order to hire employees and open a bank account.

Step-by-step instructions:

1. Choose a unique name that has not been previously registered in the United States and search the US Patent and Trademark Office’s trademark database.
2. Name an agent that will be available to receive the company’s legal documents.
3. Fill out a certificate of incorporation, which will outline the company’s name, the address of the agent, the value of authorized shares, and the name and legal address of the incorporator.
4. File an incorporation report and pay the franchise tax.
5. Obtain an employer identification number (EIN) from the IRS by either applying online for free or by mail or fax if neither you nor the company’s principal officer has a Taxpayer Identification Number.
6. Pay taxes on any income earned in the United States.

What is the process for obtaining a tax ID number for a US business?

Step 1: Complete online form to apply for a Tax ID (EIN).

Step 2: Sign and return the form to obtain an EIN.

Step 3: Obtain an Employer Identification Number (EIN) from the IRS.

Step 4: Fill in the Form SS-4 and wait for the IRS to process it.

Step 5: Apply for an Individual Taxpayer Identification Number (ITIN) with IRS Form W-7.

Step 6: Submit all required documents to the IRS.

Step 7: Get a response from the IRS in 20-45 days.

Step 8: Use Express EIN service to get the number in five to eight business days if you are a Non-US resident.

What is the difference between a C Corporation and an S Corporation?

The main difference between a C Corporation and an S Corporation is the way in which profits and losses are taxed. C Corporations pay taxes on their profits, and then the individual shareholders of the company pay taxes on the dividend income they receive from the business, which is known as “double taxation.” On the other hand, the profits and losses of an S Corporation are passed through to the shareholders, and they pay taxes on the income from their personal tax returns.

Additionally, S Corporations have restrictions on who can be shareholders. All shareholders must be U.S. citizens or permanent resident aliens, while C Corporations can be formed by individuals or corporations both domestic and foreign.

C Corporations may also appeal to outside investors and financial institutions due to the compliance checks that are in place to ensure they’re run properly. LLCs, while they offer personal liability protection, do not have such rigorous compliance checks.

The paperwork and deadlines required to stay in compliance can be an issue with either business structure.

What are the liability protections for registering a US business?

When registering a business in the US, the most popular entities that offer liability protection are corporations and LLCs (Limited Liability Companies). Both entities provide excellent liability protection for any potential bankruptcies or lawsuits. Corporations and LLCs are established by selecting a state and submitting the necessary formation paperwork usually to the Secretary of State’s office.

Other entities that provide liability protection include S-Corps, partnerships, and sole proprietorships. C-Corporations are a popular choice for startups seeking venture capital, as they do not have restrictions on the number of foreign owners. An LLC is the most common choice for foreign small business owners who wish to set up a business in the US as it offers many tax advantages and less paperwork.

When forming a US LLC, compliance with all state and federal regulations is essential in order to legally start and run a business in the US from overseas. This includes choosing the LLC’s state, registering the LLC, getting an Employer Identification Number (EIN), and having a physical US mailing address. It is important to note that forming a US LLC does not grant a visa to work in the US.

How long does it take to complete the business registration paperwork?

If you’re looking to start your own business in the US, you’re probably wondering how long it takes to complete the business registration paperwork. The good news is that the registration process can be relatively quick, depending on the state you’re registering in. Generally, it takes 1-4 weeks for the application to be approved for a Corporation or LLC. It is possible to reduce this time to 1 to 3 business days for an additional fee.

For foreign citizens, getting an Employee Identification Number (EIN) will take at least 30 days. If your owners or directors are not American citizens, you can get a Tax ID by filing with a special IRS division. Again, processing time will depend on the state you are registering and the amount of backlog they have.

There are online services that can help you with the formation of companies in the US for a fee. Generally, if you follow the state’s guidelines, you can be set up and ready to do business in around 5 weeks.

The first step towards getting your business setup is to find a Registered Agent. This company will register your LLC and the process usually takes 72 hours. After that, you’ll need to pay the fees and provide your personal information and details of your business.

Finally, you’ll need to complete the required paperwork. Depending on the state, this process should take between 1 to 4 weeks. Paying an additional fee may reduce this time to 1 to 3 business days. Additionally, if you are a foreign citizen, it will take at least 30 days to get your EIN.

Overall, the business registration process is relatively straightforward and the time frame can be shortened with the right services. With the right preparation, you can get your business up and running in around 5 weeks.