How to set up a company in the USA as a foreigner?

1. 1. What to consider when opening a company in the USA

Years of experience have taught us that there are several occurring concerns that international business owners who want to develop their firms in the United States should be aware of:

1.1 Should I apply for a certain sort of visa as a foreigner intending to start a business in the United States?

You may start and own a business in the United States without needing a visa or even visiting the country. Managing an Limited liability company (LLC) from outside the United States is acceptable, but it may not be authorized if you live in the United States without a valid work visa. Being a director and shareholder of a US business is permissible without a visa, however, being an officer and executing your duties within the US is often not permitted.

1.2 What types of business companies may I start as a foreigner?

As mentioned in our previous article Overview of company types in the US, foreign investors can consider the following 3 main types that stand out to open a company in the US:

• C-Corp (also known as Corporation or Regular Corporation)
• S-Corp (Small corporation)
• Limited liability company (LLC)

Keep in mind that each state in the United States may have its own set of rules governing these business formations. State business tax rates may also vary. As a result, if you need to establish a corporation in the United States but are unfamiliar with the procedures and are having problems completing the application, it is important to get expert help from us to prevent wasting time and money.

1.3 In which state should I register my company?

The ideal state to register in is the one where you can gain more consumers and optimize the total revenue for your companies. However, if you operate an online business or conduct business in many states, you may want to explore registering in a state with reduced tax responsibilities. Delaware is one of the ideal low-cost states for this business type.

Delaware is especially attractive because of its corporation law, which gives strong protections to shareholders and directors. Incorporating in Delaware also does not necessitate the use of a physical address or a bank account. In fact, Delaware is so accommodating to international businesses that the state's corporation law website is available in a variety of languages.

2. 2. How to open a company in the USA as a foreigner

The registration process varies by state and is partially dependent on whether you're founding an LLC, C-Corp, or S-Corp. Here are some of the fundamental stages and requirements.

Step 1: Choose a location for your company.

The taxes, zoning restrictions, and regulations that apply to your business are determined by its location. You must make a smart selection regarding the state, location, and neighborhood to establish your firm in. From our years of experience, you should take into account these factors when picking a business location:

• Local and state taxes: Consider the tax landscape for the state, county, and city. Income tax, sales tax, property tax, and corporation taxes can all differ dramatically from one location to the next. In reality, certain states are well-known for designing tax policies that are extremely favorable to specific types of businesses. This is one of the reasons why IT companies, financial institutions, and manufacturers tend to cluster in specific regions of the country.
• Incentives from state and municipal governments: Some state and municipal governments provide small enterprises with particular tax breaks. There may also be state-specific small company loans or other financial incentives available. Incentives and advantages are frequently associated with employment growth, energy efficiency, urban redevelopment, and technology.

Step 2: Select a company structure.

Everything from day-to-day operations to taxes and how much of your personal assets are at stake is influenced by the business structure you pick. You should select a business structure that provides you with the appropriate mix of legal protections and benefits. You can have a detailed review and comparison in our article Overview of company types in the US.

Step 3: Choose a name for your company.

You should select a business name that symbolizes your brand identity and does not conflict with the goods and services you provide. Once you have decided on a name, you must safeguard it. There are four options to register your company name. Each method of registering your name serves a distinct function, and some may be legally needed based on the structure and location of your firm.

• Entity name protects you at a state level
• Trademark protects you at a federal level
• Doing business as (DBA) doesn’t give legal protection, but it might be legally required
• Domain name protects your business website address

Each of these name registrations is legally distinct. Most small firms prefer to use the same name for each kind of registration, however this is not always necessary. In order to save time later, you should provide at least 3 options just in case the first one you want has been taken or is invalid.

Step 4: Register your company.

Register your company to establish it as a separate legal entity. Your business structure and location will determine how and where you must register. You have to ubmit the company registration form with the following information:

• Company name
• Provide the names and addresses of all directors and shareholders of this company.
• Provide a Registered Agent (Global Link Asia Consulting will support at this stage) (this is a mandatory requirement to set up a company in the US)

Step 5: Obtain an EIN

Your state and federal tax ID numbers, also known as an Employer Identification Number (EIN), function similarly to a personal social security number, but for your business. They make it possible for your small business to pay both state and federal taxes. Once the company has been incorporated, businesses must apply for an Employer Identification Number (EIN), which is the US company tax code.

Apart from setting up a company in Singapore, having a US address is optional for a company in the US. However, if the company has regular customers/partners in the US or correspondence from customers/partners or needs to hire personnel or open a bank account in the US, it should consider leasing an office in the US.

Step 6: Open a bank account for the US company

If you plan to do business in the United States, you will need a US business banking account. Although this is increasingly improving, most US customers do not trust firms that need payment from outside the country. By opening a bank account in your company's name that is used solely for business reasons, you ensure that you can neatly and clearly document your financial activities for tax return purposes and defend your firm in the case of a tax audit.

While the restrictions differ per bank, creating a business bank account has become increasingly regulated and complex in recent years. Prepare to offer the following items in person:

• Documentation for incorporating a business
• Tax identification number
• A copy of your passport is required, as is proof of address.

5. 3. Global Link Asia Consulting - your trusted business partner

As an experienced expert in this field, we are here to give advice, information, and assistance, as well as to walk you through the decisions you must make to ensure that your new business has the flexibility and legal protection you seek. Global Link Asia Consulting will:

• Assess your business needs and provide a comprehensive business strategy for you before opening a company
• Advise the best state to incorporate and corporate structure
• Review and prepare all required documents to register a company in the US
• Support to pay all required incorporation fees to the US government
• Provide a registered office address and registered agent service for 01 (one) year
• Provide all corporate documents and a company stamp set
• Assist to open a bank account in Singapore (or an online bank account in the United States). Please note that the application outcome depends on the bank’s assessment.

As a non-citizen, you will have to do more work and encounter greater hurdles. These challenges, however, are far from insurmountable when you seek the assistance of reputable specialists to guide you through the process. I strongly advise you to seek the advice of accountants and attorneys who have experience assisting foreigners in establishing enterprises in the United States. Global Link Asia Consulting’s consultants, who have expertise and experience founding firms in a wide range of sectors, may also give useful assistance as you pursue entrepreneurship in this country of opportunity.