Every year, the United States attracts hundreds of thousands of entrepreneurs from several countries seeking to live the American Dream. Among the most attractive states, Florida stands out for its reduced bureaucracy and pro-business regulations.
In this article, you will have an overview of the opportunities available for foreign entrepreneurs and the basic limits imposed by US legislation on foreign-owned businesses.
Are Foreigners Allowed to Own a Business in USA? – An Introduction
Foreigners born outside the United States, non-US citizens, and non-residents are free to establish a business on American soil. It is possible to open a new company, purchase an existing business, create multiple companies, and do business similarly to US citizens.
Depending on how the company is structured, it can be owned and controlled by a single person as an individual, multiple business partners, or even through another company (e.g., a holding company).
A company established by a foreign citizen or another foreign company in the United States is considered a “foreign-owned” company. This business structure must be registered to do business in at least one US state.
Still, there are certain limitations to the type of companies available for foreigners and other factors.
Which Visas Do Foreigners Seeking to Open a Business Need in USA?
US law requires no foreigner to have a green card or temporary visa to establish, own, or purchase a business in the United States. Please note that opening or owning a business does not automatically give its owner the legal right to work in the company.
There is a gigantic difference between owning a US company while other employees work on the business and directly working for the company.
Hence, no foreign business owner can work directly for the business he or she opened in the United States before obtaining an adequate visa with a work permit.
What Types of Businesses Can Foreigners Own in the United States?
Not all types of business structures are available for foreign entrepreneurs in the United States. These restrictions are applied to foreign citizens who:
- Are not US citizens through naturalization
- Have not passed the US green card test, or
- Have not passed the substantial presence test (as defined by IRS)
Fortunately, there are various types of businesses available for anyone willing to put down the necessary amount of capital and thrive, which is excellent for foreign entrepreneurs.
The most basic types of companies available in the United States are corporations, which can either be C-corporations or S-corporations. Both structures provide limited liability to their owners.
S-corporations are taxed at the individual level, while C-corporations are subject to double taxation. Hence, a C-corp must pay taxes both at the corporate level and at the moment shareholders receive their share of dividends.
Similarly, limited liability companies (LLCs) provide limited liability to their owners (members) but are taxed exclusively at the individual level like S-corps. LLCs are easier to manage and require fewer formalities, which is a huge advantage to foreign entrepreneurs.
Under US Law, the only business structure restricted to foreign ownership is the S-corporation, as foreigners and non-US residents in general cannot fully own or have partial ownership of this type of business.
This fact does not hinder foreign entrepreneurs from owning a thriving US business, as they are still allowed to form limited liability companies (LLCs), C-corps, and partnerships in any US state.
The American Dream is not Over Yet – We Can Help You to Open a Florida Business as a Foreigner
Do not let your entrepreneurial dream in the United States turn into a nightmare. Call Attorney Romy B. Jurado today at (305) 921-0976 or email Romy@juradolawfirm.com to get expert help as soon as possible.