Learn how to register your US-based business, file for an EIN, and choose the right company structure. Discover the differences between LLCs and C Corps and find the best option for your business as a foreign entrepreneur.
Starting a U.S.-based business as a foreigner can be a long road, but we want to make it easier to register your company and open your business.
Ready to start your U.S.-based business? Let EPIA Inc. help you navigate the process with ease. Learn how to choose the right company structure, file for your EIN, and more. Don't let confusion hold you back - take the first step towards success today.
Learning English is a basic requirement if you plan on doing business with Americans, but other aspects such as filing for your Employer Identification Number (EIN), and choosing which type of company you want to be, can make matters more confusing.
But we prepare the following guide to help you.
Choose your company’s structure
Before even beginning the formation process, you need to evaluate the types of company structures available in America. The two most important corporate structures in the US are limited liability companies (LLC) and C corporations. The type of structure you choose will impact the way you conduct your business and the way you’ll pay taxes in the US. Main differences between LLCs and C Corps
Taxes: LLC members (owners) do not need to pay corporate taxes, but personal income tax only. On the other hand, C Corps have to pay taxes on a corporate level, while shareholders would have to pay on their own as well. This is known as double taxation and is one of the reasons entrepreneurs seek to start an LLC in the US.
Stock market: C Corps can issue stocks, while LLCs can’t. This means that only C Corporations are allowed to trade and participate in the stock market. The only way for LLC members to do something similar is to trade ownership interest on a securities exchange.
Financing: raising capital for a C Corp is easier than for an LLC. C Corps can sell their shares and have unlimited shareholders financing their operations. On the other hand, LLCs are limited to offering debt (liquid money, returns) or equity (ownership). Similarities of C Corps and LLCs
Liabilities: in both structures, companies are treated as separate entities from their owners (members for LLCs and shareholders for C Corporations). This means that your assets cannot be seized in case the company incurs legal liability.
Tax filing: Both LLCs and C Corps have to file their taxes quarterly.
Type of owners: Individuals and corporations, either domestic or from abroad, can be members of an LLC. The same goes for shareholders of a C Corporation. Although LLCs are limited to 100 members while C Corps are unrestricted in this regard.
What’s the best structure for foreign entrepreneurs
Both LLCs and C Corps offer advantages to domestic or international business owners. One key aspect is that of raising capital. C Corps offer much more flexibility and security to external investors, therefore it’s easier to get capital for a new venture. Now, when it comes to taxes, LLCs have the obvious upper hand by avoiding double taxation. This is one of the most appealing aspects of the entire American economic ecosystem, which also ends up attracting more foreigner-owned businesses. In conclusion, if your company is already successful in your local market, and you’re just expanding your horizons.
Now, on the other hand, if you’re looking to open a company in America as a non-citizen for the advantages the country offers to raise capital, then a C Corp could be better for you.
Either option would yield incredible amounts of advantages to your business in the global scenario and would give you access to the best of the American commercial landscape. You’d be able to sell your products and services in the most profitable market in the world and on platforms such as Stripe and Amazon without any problem.
What documentation do you need to open a business in the US?
You don’t need to come to the US to start a business as a non-citizen. You don’t even need to get an American visa. Owning a business is not the same as being employed by it, thereby you’ll only need a US visa the moment you start actually working in your company. So you can do it all in baby steps at first. Company’s address
The first thing you need to do is to get a physical business address, the place where your company’s headquarters are to be located. In case you don’t have access to any place, you have Globalfy’s Virtual Address service, by which you can register our mail room as your business address and get your mail shipped to your country, EIN
Then you’ll need to apply for an EIN, the Employer Identification Number of the IRS. In case you have a social security number or Individual Taxpayer Identification Number you can apply online. In case you don’t have any of these documents, the process will take longer but you can still do it. You’d have to fill in the Form SS-4 and wait for a few weeks for it to be processed. US business bank account
After completing the steps mentioned above, you need to get a US business bank account to manage your money.
Ready to start your U.S.-based business? Let EPIA Inc. help you navigate the process with ease. Learn how to choose the right company structure, file for your EIN, and more. Don't let confusion hold you back - take the first step towards success today.
Source: https://www.score.org/resource/blog-post/steps-starting-business-us-if-youre-not-us-citizen
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EPIA inc. is a private Insurance Agency with no ties with legal entities. The information contained in this article is based on information provided by the Medicare Official Website.