Year after year, millions of foreigners apply for a US visa year after year intending to establish a business in America.
While neither citizenship nor residency is required to set up a business in the United States, there are several legal rules that foreign entrepreneurs must observe when doing business within US jurisdiction. Keep reading to find out how to set up a business in the United States as a foreigner.
How Do You Set Up a Business in the US as a Foreigner? – Step-by-Step
Obtaining a US Visa
In most cases, as long as they properly pay the required US taxes, foreign citizens will not need a green card to set up a business in the United States or to serve as an executive/director of a US company.
Nevertheless, foreign individuals who want to work in a business they have invested in must obtain a US visa that permits them to work legally. Typically, most foreign entrepreneurs apply either for an E2 Treaty Investor Visa (nonimmigrant) or an EB-5 Investor Visa (immigrant).
Determining whether to apply for these or other visa options requires expert guidance. Hence, make sure to consult with an expert business immigration attorney for an individual assessment.
Choosing a Proper Business Structure
When forming a business in the United States, foreign entrepreneurs have some restrictions regarding the choice of a business structure. Typically, most foreigners are allowed to form corporations (c-corps) and limited liability companies (LLCs).
If a foreign entrepreneur has lawful permanent resident status (green card), it is possible to form an S- corporation. In any case, non-US citizens must pay incomes taxes to the Internal Revenue Service (IRS) and the state where the business is established, as well as other taxes at the federal, state, and local levels.
Ultimately, choosing a proper business structure for a company will determine its tax liability.
Structuring the Company
After choosing the type of business entity for the company, a foreign entrepreneur must:
- Appoint a registered agent
- Obtain an EIN
- Set up a business bank account
- Get all required licenses and permits for the company
Both corporations (c-corps) and limited liability companies (LLC) must designate a registered agent in the estate where the company is established. The role of a registered agent is to receive documents on the business’ behalf, such as legal notices, correspondence, tax notices, or any other official notifications.
Then, foreign entrepreneurs must apply for an EIN (Employer Identification Number) with IRS, which requires either an Individual Taxpayer Identification Number (ITIN) or the Social Security Number.
Any business entity based in the United States must set up a proper business bank account subject to US law. Hence, the owner(s) of the company must provide any required official documentation and proof of identification to the chosen banking entity and follow to steps to create a US-based bank account.
Similarly, any US business must apply for the licenses and permits required by their industry, type of business activity, and the jurisdiction where the company operates.
Although one can work his/her way alone through this entire process, it only results in additional work and unnecessary stress. Ideally, the best approach is to work with an expert business immigration attorney.