How to Set Up a US Company as a Non-Resident?

As a non-resident, starting a business in the United States can be difficult, but the country makes it simple to register and establish a company. If you want to do business with Americans, you must be able to communicate in English. Read on to know how to set up a company in the US as a non-resident.

Overview:

Every day, foreign nationals establish businesses in the United States, everything from companies to little boutiques. Many businesses throughout the world rely on access to the US market to succeed. The most efficient approach to enter this market is through a US company, which can take advantage of the world’s largest and most integrated national market while paying the lowest tax rate. When you have the assistance of a team with experience in company formation, immigration, import-export, and supply chain, incorporating a company in the United States as a non-resident is simple.

• From a customs and tax perspective, it’s easier to sell in the US market
• Access to venture capital, angel investors, and public markets in the United States
• Improve your company’s reputation, both with US customers and in a number of diverse markets
• It is easier to obtain a work visa in the United States (but acceptance is not assured!)
• You may be able to decrease your tax on income earned in the United States.

Starting a new business or extending an existing one to a new country may be a thrilling yet challenging task. The complexities of establishing a business ideas in a foreign country can be overwhelming, especially given today’s political and economic uncertainties. Non-citizens should take the necessary procedures and use all of the resources available to them in order to succeed in their endeavours.

Types of Business Entities You Can Open in the US 

There are currently two types of business entities that non-residents can form in the US.:

• Limited Liability Company (LLC)

When starting a business in the United States, an LLC, or limited liability company, is likely the finest business structure to use. Members are protected from personal liability for corporate decisions or actions, and their personal assets are safeguarded if the company goes into debt or issues. LLCs are also exempted from the stringent bookkeeping regulations that C and S-corporations are subject to.

• Corporations

A corporation, often known as a C-Corp, provides the best protection against personal liability for its owners; nonetheless, the cost of forming a corporation is higher than that of other business structures. The opportunity to expand by providing unlimited shares is the most massive benefit of forming a corporation; this is frequently very appealing to investors. The disadvantage is that, unlike LLCs, corporations are taxed on their profits and may be required to pay twice in some situations.

What Is the Process for Registering a Company in the US as a Non-Resident?

The private limited company registration process varies slightly from state to state and is mainly depending on whether you’re forming an LLC or a corporation. After you’ve decided on a business structure and a location to start your company, you’ll need to do the following steps:

• Choose a unique name for your LLC or C Corp
• Hire a registered agent service
• File for incorporation with the state
• Get an employer identification number (EIN)
• Obtain a physical U.S. mailing address
• Set up a U.S. bank account.

Where to Set up a USA Business?

Choosing the optimal location for establishing a business in the United States is a critical decision shaped by a multitude of factors, including demographics, supply chain assessments, budget constraints, state laws, and tax considerations. Unlike residents who typically set up businesses in their locality, non-residents entering the US for business enjoy the flexibility of selecting any state for their enterprise. While the US is often seen as a unified entity, recognising that the choice of state significantly influences the company incorporation process is essential.

Comprising 50 states and the District of Columbia, each with distinct size, population, and economic landscapes, the United States presents a diverse array of opportunities. When initiating a business in the US, the state selection process requires a strategic balance between cost and quality considerations. Identifying key drivers in the location choice, such as market access, skilled labour availability, and transport infrastructure, lays the foundation for a comprehensive decision-making process.

For non-resident-owned US companies, several factors contribute to creating a favourable business environment. These factors include convenient access to international flights, a thriving market for expansion, considering population, education levels, access to banking services, and infrastructure. States with high rates of innovation and business birth, coupled with reasonable incorporation fees, rapid setup times, and minimal information requirements, offer distinct advantages.

Conversely, businesses need to navigate challenges that could impede growth, such as inadequate or poorly-maintained infrastructure, a high cost of living, unfavourable environmental conditions, historical baggage, and anti-immigrant prejudices. To facilitate an informed decision, a robust corporate location process involves utilising various data sources, creating a preliminary list of potential states or cities, and systematically analysing and narrowing down choices to 2-3 cities that align with the company’s objectives.

New Company Document Requirements

Aspect	Business Corporation	Limited Liability Company (LLC)
Formation	Certificate of Incorporation or Articles of Incorporation	Articles of Formation or Articles of Organisation
Governance	Organisational Minutes and bylaws (Optional: Shareholder Agreement)	Operating Agreement
Ownership	Issuance of Share Certificate for each shareholder	Issuance of Member Certificate for each Member
Tax	Submission of IRS Form SS4 – Application for Employer Identification Number	Submission of IRS Form SS4 – Application for Employer Identification Number
Due Diligence	Compliance with federal law barring certain nationals (e.g., Iranians, North Koreans, Cubans) from owning US assets, including US companies.	Adherence to federal law restricting certain nationals (e.g., Iranians, North Koreans, Cubans) from owning US assets, including US companies.

Will You Need a Visa to Open a US Business?

You can technically start and own a business in the United States without being a citizen. It is legal to manage an LLC or corporation from outside the United States, but you will not be allowed to enter the country without a valid work visa. Contact the US Embassy in your home country or the US commercial service if you have any queries or need more information about applying for a visa. There are other types of business visas available in the United States, but the E-2 visa is the most popular among entrepreneurs. The following are the three main requirements for obtaining an E-2 visa:

• You must be a citizen of a country with which the United States has signed a Treaty of Friendship, Commerce, or Navigation
• You must have already invested or plan to invest a large amount of money (at least $100,000) in a US firm
• You must be able to demonstrate that you own a controlling interest in your company (50% or more).

An entrepreneur may be qualified for a ‘Green Card through Investment,’ which would allow them to become a permanent resident of the United States. The law, however, only applies to foreign investors who can invest $1 million in a new commercial venture (or a minimum of $500,000 in designated employment regions).

Types of Business Visas in the USA

Visa Type	Description	Duration	Limitations
B1	Short-term business visa allowing stays up to 6 months	Temporary, up to 6 months	Prohibits signing contracts or performing work for hire. Negotiation allowed but contract signing is restricted.
B2	Short-term Tourist visa with a duration of up to 6 months	Temporary, up to 6 months	Allows negotiation but prohibits signing contracts.
E-1	Treaty trader visa for establishing businesses that trade with the visa-holder’s home country, contingent on a treaty with the US	Temporary, renewable until business ceases operation	Valid as long as there is a business. Children under 21 cannot work and lose their status upon turning 21.
E-2	Treaty investor visa for citizens of treaty countries starting a US business	Temporary, renewable until business ceases operation	Valid as long as there is a business. Children under 21 cannot work and lose their status upon turning 21.
EB-5	Investor Green Card program requiring a $500k to $1MM investment, hiring at least 10 US residents within 2 years, and survival for over 5 years	Leads to permanent residence after probation period
L-1	Intercompany transfer visa allowing transfer from foreign to US company with restrictions	One year, extendable up to 3 extensions	Requires the employee to have worked for a foreign, related company for over a year in the last 3 years.
H-1B	Specialised labour visa with a 3-year duration, extendable	Three years, extendable	Annual quota limits the number of available visas. Not applicable for self-employment.
O-1	Extraordinary Ability visa with up to three years, extendable	Up to three years, extendable	Requires documentation of extraordinary ability.
TN	NAFTA temporary work visa with a duration of up to three years	Up to three years, extendable	Inapplicable for self-employment.

How to Set up a USA Company as a Non-Resident?

Setting up a US company as a non-resident involves several key steps. Here’s a checklist to guide you through the process:

1. Define Your Business Structure:

Choose the appropriate legal structure for your business, such as a Limited Liability Company (LLC) or Corporation, based on your goals and needs.

2. Obtain an Individual Taxpayer Identification Number (ITIN):

Apply for an ITIN through the IRS to fulfill your tax obligations as a non-resident.

3. Register with the IRS:

Obtain an Employer Identification Number (EIN) by registering with the IRS, which is essential for tax filing and legal compliance.

4. Research State-Specific Requirements:

Understand and comply with state-specific tax obligations, as each state may have different regulations for businesses.

Register for Taxes 

Setting up a US company as a non-resident involves several crucial steps, and registering for taxes is a fundamental part of the process. Here’s a checklist to guide you:

1. Obtain an Individual Taxpayer Identification Number (ITIN):

As a non-resident, you need an ITIN to fulfill your tax obligations in the US. Apply for an ITIN through the IRS.

2. Choose the Right Business Structure:

Decide on the appropriate legal structure for your business, such as a Limited Liability Company (LLC) or a Corporation, based on your specific needs and goals.

3. Register with the IRS:

Obtain an Employer Identification Number (EIN) by registering with the IRS. This unique number is essential for tax filing and other legal purposes.

4. Understand State Tax Requirements:

Research and comply with state-specific tax obligations. Each state in the US may have different tax regulations for businesses.

5. Comply with Federal Tax Laws:

Familiarize yourself with federal tax laws and ensure compliance. This includes understanding income tax, employment tax, and other federal tax obligations.

6. Determine Sales Tax Obligations:

If your business involves selling goods or services, be aware of sales tax requirements, which vary by state. Register for a sales tax permit if necessary.

7. Keep Detailed Financial Records:

Maintain accurate and organized financial records to facilitate tax reporting and compliance. This includes income statements, expense reports, and receipts.

8. Consider Hiring a Tax Professional:

Given the complexity of US tax laws, consider hiring a tax professional or accountant familiar with international tax matters to ensure accurate compliance.

9. Stay Informed About Tax Deadlines:

Be aware of tax filing deadlines to avoid penalties. Familiarize yourself with the relevant forms and submit them on time.

10. Stay Updated on Tax Law Changes:

Keep abreast of any changes to US tax laws that may impact your business. Regularly check for updates and adjustments to tax regulations.

FAQs

Can non-residents legally establish a company in the United States?

Yes, non-residents can legally establish a company in the United States. However, there are various compliance requirements that non-residents need to fulfil to set up a US-based business.

What are the key steps involved in setting up a US-based business for non-residents?

The key steps involved in setting up a US-based business for non-residents include choosing a business structure, selecting a state for incorporation, obtaining a US address and fulfilling visa and tax requirements.

Are there specific visa requirements for non-residents looking to start a company in the US?

Yes, there are specific visa requirements for non-residents looking to start a company in the US. The most popular visa for entrepreneurs is the E-2 visa, which requires the applicant to be a citizen of a country that has a Treaty of Friendship, Commerce or Navigation with the US.

What legal and tax considerations should non-resident entrepreneurs be aware of when establishing a US company?

Non-resident entrepreneurs should be aware of legal and tax considerations such as business structures, state and federal taxes, and compliance with US laws and regulations before establishing a US company.

Can non-resident business owners open a US bank account for their company, and what documentation is required for this process?

Yes, non-resident business owners can open a US bank account for their company. The documentation required for this process includes the company's formation documents, EIN, and personal identification documents for the account signatories.

Can a non immigrant own a business in the USA?

Launching a business in the USA does not necessitate legal residency or citizenship. However, residing and working in the United States, or receiving wages from your business while living in the U.S., will require a Green Card or visa.

Can I start a company in the US without a visa?

Commencing and owning a US company is possible without a visa, even without physically being present in the US. It is permissible to oversee a business entity, like an LLC or corporation, from outside the US. However, conducting such management within the US may require a valid work visa.

How Can I get a green card if I have a company in the USA?

Securing a green card by initiating a business in the US is achievable through various visa programs. In the EB-5 investment program, the requirement involves investing in a commercial enterprise within the US and generating or maintaining 10 permanent full-time jobs for US workers.

How Can Indians get an EB5 visa?

Certainly, individuals from India are eligible to apply for the EB‑5 Visa. To meet the criteria, Indian investors pursuing EB‑5 should undertake an investment of $800,000 or $1,050,000 in the American economy and generate a minimum of 10 full-time jobs.