How to Open a Company in USA
The United States is a desirable market for many citizens of foreign countries. People from all over the world want to utilize the numerous business opportunities available but are often not sure of the proper way to proceed. There are several important considerations and tasks to be completed for foreign citizens who want to set up a company in the United States.
Business Structure and Setup
If your business will have a physical presence in the United States, it’s wise to consider setting up a business entity, such as a corporation or limited liability corporation (LLC). Keep in mind that foreigners cannot set up an “S” corporation, because they are not citizens and file individual tax returns, and this is where S corporations would report their business income.
Setting up a business entity usually requires submitting articles of incorporation and registered agent to the state in which you wish to incorporate. In addition, there is usually a fee to process your application. Keep in mind, however, that while the process of incorporation is the same for U.S. citizens and foreigners, the tax consequences are not. Depending on the structure selected, your business will be responsible for certain taxes, and failing to pay these will have dire consequences for your new business. It is prudent to talk to an accountant or business consultant about the options and what will work best for your situation.
A corporation is an independent legal entity that exists separately from the people who own, control, and manage it. Corporations have the ability to enter into contracts, pay taxes, and perform various other transactions in business. In addition, there is a difference between “for profit” and “not for profit” corporations – the first is formed to generate income for shareholders, owners, and employees. The latter is formed usually for the purpose of funding religious, charitable, or educational activities.
When forming either type of corporation, an Articles of Incorporation is required. For-profit corporations must include the name of the corporation, street address, total number of shares that the corporation is authorized to have outstanding at any time, the name and Florida street address of a Registered Agent, who will be responsible for accepting service of process on behalf of the corporation, a signed statement from the Registered Agent, names and addresses of the parties who are forming the corporation, and the signature of at least one incorporator. Nonprofits are required to include all of these items, except information regarding the shares. In addition, nonprofits are required to submit the specific purpose of the organization, the manner in which directors are elected or appointed, and any limitations to the corporate powers. Nonprofits seeking Federal tax exemptions should take particular note of the “specific purpose” clause.
Running a business in a foreign country means you must abide by that country’s legal rules. This requires a business owner to become familiar with the laws of the jurisdiction. Areas of particular legal relevance are data privacy, labor and employment, and intellectual property laws. In addition, you will want to become well versed in securities and any corporate regulations that apply to your specific type of business.
If you are looking to set up a company in the United States and you’re from another country, you may need to be in the U.S. for an extended period of time on business matters. If you have a green card, you are free to start a business in the U.S. Another option is to apply for either an E-2 or EB-5 visa, which usually are referred to as “Investor” visas. The E-2 visa has several requirements, including being a legal citizen of one of the treaty countries, having invested or be currently engaged in the process of investing in the U.S., you must have invested a certain amount, usually at least $100,000, and you must plan to return to your home country once the visa expires. The EB-5 visa has less stringent nationality requirements, but requires a larger monetary investment amount of at least $1,000,000. In addition, the business must create at least ten full-time jobs. There may also be other options being developed specifically for foreign business owners.
Many of these topics can be confusing to someone entering the United States business market for the first time. An accountant or business expert, such as FAS CPA & Consultants, can help you navigate through tax concerns, as well as other business startup matters.
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