Starting a business in the country is fairly easy, even if you do not have a visa and aren’t planning to visit. You can manage an LLC from another country, but it may not be allowed in the United States without a valid work visa. Non-citizens are allowed to be a shareholder and/or director of a company within the US but to be an officer and perform any duties in the country, you would generally need a visa. If you plan to open a small business in the United States, you do not need citizenship or residency in order to open it either.
Having a company registered in the USA allows you to do a number of things including:
- Open a United States bank account so you can sell to domestic clients.
- Gain access to a new market that can enhance the reputation of your business, both in your home country and in the US.
- Open online accounts with businesses like Amazon FA.
How to Register a Company in USA?
- Decide what type of business organization is right for you.
- Decide where you should form your LLC (Limited Liability Company).
- Find a local registered agent.
- If applicable, register your LLC or S-corporation.
- Apply for an EIN (Employer Identification Number).
- If necessary, get a US mailing address.
- Open a bank account in the US.
- Open a merchant account so you can accept payments from customers.
- Purchase business insurance.
- Get a local US phone number for your new business.
- Research what your tax liability is going to be.
- Be sure you are keeping your business and personal accounts separate.
- Pay annual fees and any other required fees.
- Make sure you’re in compliance with any city, county, state, and federal requirements.
- Consult a US business lawyer licensed to practice in the state where your business is located in the US.
LLC vs. S-Corp: An Overview
Limited liability company, often referred to as LLC, is a business entity ideal for business owners who are looking for more protection from personal liability. LLC is the least complicated and restrictive type of business structure to establish and operate as you can act as your own registered agent to complete the operating agreement. This particular business structure also guarantees no double taxation.
An S Corporation is a tax classification, which lets the International Revenue Service know that your business will use a partnership taxation. It is important to note that launching a corporation is more complicated than LLC as you will need to register as a C-corp first before adhering to more specific guidelines in order to be eligible to change to an S-corporation. This particular business structure provides limited liability protection but allows any corporation with 100 shareholders or less to be taxed as a partnership.
How to apply for an EIN?
Employer Identification Number (EIN) is a 9 digit sequence that helps identify your business for tax purposes. An EIN is required before starting the company registration process as an LLC or corporation. The IRS provides a free registration service for all applicants and can be completed online.
Should I Open a Separate Business Bank Account?
It is always highly recommended to have separate bank accounts for personal use and your business, it can sometimes be required by the state. In the USA, a business bank account is needed for the company formation most of the time, depending on what type of company you are.
As a business owner, having separate bank accounts to track financial transactions is one of the most essential parts of building a sustainable business, especially for small businesses. This information helps document the financial health of your company and aid in future business decisions in the best interest of your company. Having separate bank accounts also allows you to decrease the amount of income tax you would have to pay.
How long does it take to register a company in the USA?
Companies in the USA need to register to the Secretary of State office of the business location. After submitting your registration requirements, the government will process the document and review all the information before approving. This process may vary in time, depending on the state.
In most states in the USA, it can take between 4 to 6 weeks for the Secretary of State to approve an application for an LLC or S-corporation, sometimes longer. Rush processing is available in certain states, such as New York. If your business plan depends heavily on timing, it is advisable to pay the extra fee (vary between states) as this service cuts the processing time to 2 – 3 business days.
Where to Base Your Business in the USA?
Choosing your company’s location is one of the most important decisions you will make. It can involve looking at a variety of things to decide what is best for you:
- Demographics
- Understanding your local competition
- Finding your supply chain
- Comparing state laws and tax regulations
- Ensuring you stay on budget
The decision you make should be one that will meet all the business objectives for your company in the most cost-effective manner without sacrificing quality. Big cities in the USA can bring more business to your company but there is more competition. Each business is different, so you will need to decide what factors are the most important for your business. Is it the location? Transportation? Accessibility to skilled labor?
Can Non Residents own an LLC in the USA?
The simple answer is yes. You do not have to be a US resident in order to own an LLC within the United States. The business structure of an LLC allows anyone to apply regardless of their citizenship status. However, it’s a more tedious process than if you were a resident. Other business structures, such as an S corporation, do not allow non-residents to own a company within the USA.
Can the Foreign Business Own the US Company?
If you opt to set up an LLC, then yes, your foreign business can own the US company. This is done by appointing your own foreign company as the managing member instead of an individual person. If you decide on a corporation, you must name a director, which must be an individual, at the time of registration. Directors are not necessarily company owners either. Shareholders own corporations, and in that regard, your foreign business can be the 100 percent owner of a corporation in the US.
If you are interested in the tax benefits, like pass-through profit distributions, a foreign citizen should consider an LLC. With a regular C corporation, the business is subject to double taxation. And, S corporations are off limits for non-citizens as they are not allowed to own any shares. This is why many foreign businesses opt to set up as an LLC.
Can a Foreign Resident Work in the US If They Own an LLC or Corporation?
Foreign citizens cannot receive a salary or compensation for services provided in the United States, unless he or she obtains a work permit issued in the country. There are some work permits that will allow a foreign citizen to work for a sponsoring employer only. These will not allow you to work for a different and new company that was formed by a foreign citizen. That would require a separate permit.
How Long Does Incorporation Take?
Processing times will vary between states based on the backlog of work they have. Foreign citizens will have to wait for at least 30 days to obtain an EIN in most cases. When you need to obtain a Tax ID and the directors or owners are non-citizens, it must be filed with a special IRS unit.
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