How to Start a Business in the US as a Foreigner

Start Doing business in the US can be a long road for a foreigner, but the country makes it easy to register your company and open your business. Learning English is a basic requirement if you plan to do business with Americans, but other aspects, such as applying for an Employer Identification Number (EIN) and choosing the type of company you want to be in, can make things more complicated.

Choose your company structure
Most foreigners prefer to form a C corporation, which can expand by offering an unlimited number of shares and is usually more attractive to foreign investors, although its profits are taxed twice, first at the corporate level and then as dividends to shareholders.

For corporate shareholders, the benefits are usually straightforward. corporate shareholders are usually entitled to a lower dividend rate. And unless the U.S. company is primarily a real estate owner, the parent company will not pay capital gains on the sale of the U.S. subsidiary. Even foreign sole proprietors may be better off with a C corporation because the structure will shield them from direct IRS scrutiny, Hartnig said. "Foreigners are very, very reluctant to put their names on US tax rolls," he says.

Of course, C corporation owners pay more for this shield because of double taxation. But in many cases, tax planners can use payroll, pension and other expenses to reduce corporate income and eliminate double taxation.

However, in some cases, usually depending on the specifics of local tax laws, a limited partnership may be a better business structure. In a limited partnership, non-controlling partners have limited liability and profits are passed on to the partners, who pay income tax on their individual tax returns.

Select the state to register your company

register
Forms and other requirements for forming a legal entity vary somewhat by state. Here's how incorporation works in Delaware, which serves as a simplified model for many states:

• Company leaders choose a unique name.

• They select a registered agent who can obtain legal documents for the company.

A corporation files a one-page certificate of incorporation that states the name of the corporation, the name and address of its registered agent, the total amount and par value of shares the corporation is authorized to issue, and the corporation's name and mailing address. company founder. Fees start at $89 and increase based primarily on shares issued or capital raised.