Home Articles How To Start A Foreign-Owned Business In The US

How To Start A Foreign-Owned Business In The US


Lots of non-resident aliens are convinced that they need to go through numerous trials and tribulations to set up a company in the U.S. Of course, as a foreign national you’ll need to take more steps to realize your business endeavors.

What’s more, the conditions you have to fulfill to start a business are stricter. That being said, registering a company in the United States isn’t as difficult a task as it may seem at first sight. It can be a long road, but if you invest enough time and effort in setting up your entrepreneurial venture, the odds are good you’ll manage to take it off the ground in the shortest possible time.

Decide on the Company Structure

According to business consultants from Creation BC, a company that helps US citizens move US business to Dubai, one of the most responsible steps an entrepreneur should take to start a foreign-owned company is to decide on the entity type of the future business. And the US offers quite a few options for foreign nationals.

Faith Based Events

Those business owners that look to build a startup company relying on venture capital can go with the C corporation structure. Apart from comfortable and transparent funding, this type of entity enables startuppers to separate their personal assets from tax and debt. What’s more, a C-corp provides you with an opportunity to scale your business by offering unlimited stock. This kind of company structure also allows wider ownership of an organization and thus is very attractive to outside investors and shareholders. Nevertheless, there are some downsides to establishing a C corporation.

Not only will you have to pay your corporate income tax, but also fork out dividends for all shareholders. That being said, if you’re planning on creating a large company, a C-corp can be your best bet.

In some cases, non-residents see fit to opt for the limited liability company (LLC) structure. As with the C corporation, this type of entity allows separating your personal assets from business debts. LLCs are much easier to manage and have no limits as to the number of owners (partners.) You can break down your ownership into separate units, each of which can be operated independently of other series.

limited partnership is also worth considering if you’re thinking of forming a small company. In this form of partnership, partners have limited liability, and profits are divided among all members that pay their income tax.

Choose a Business Location

Business registration regulations can vary from state to state. So, you should decide on a business location. Though it may seem like a no-brainer, in reality, you should do extensive homework to choose the right state for your business. Research the market to know your competition, evaluate your supply chain, analyze your demographics, familiarize yourself with business formation laws and regulations of the state you’re interested in, etc.

Get Down to It

Once you decide on your business location, go ahead and register your company. Though rules can be different in different states, the registration procedure usually involves picking a unique company name, getting a hold of a reliable registered agent empowered to obtain legal documents and official notices for your future company, and filling out a certificate of incorporation.

When you’re done setting up your entrepreneurial venture, be ready to pay a franchise tax, which must be filed annually (the sum may also vary by state.)  You can either avail yourself of professional company formation services or gather the required documents and file the paperwork yourself. You may find detailed online guides that will walk you through the entire process and help you with all registration steps.

Get an EIN

Last, but not least, you should obtain your federal employer identification number (EIN). Without this important attribute, you won’t be able to open a bank account, hire employees, pay taxes, or otherwise conduct your business.

To get an EIN make sure to contact your local IRS center and file the SS-4 form. You can put in for an EIN online, but in this case, you may be requested to pay an additional fee.

Once your new company is assigned a federal tax ID number, go ahead and open a business bank account. Take care to choose the financial institution with which you want to open your business account. Some banks offer attractive deals and benefits to businesses. Just make sure to choose the banking provider that can meet your individual business needs and scale with them.

In general, legal requirements for company formation can be more complex for foreign nationals than for permanent US citizens. Nevertheless, setting up a business in the US is no pipe dream. And if you follow all the required steps and adhere to laws, regulations, and guidelines, the odds are good you’ll manage to establish a profitable company in America.