Starting any business, big or small, equals loads of papers, regulations, business risk, and the readiness for certain market fluctuations. Luckily, this endeavor in recent years looks a little bit different than it was in the last decades – thanks to the almighty internet. It managed to simplify the process, reduce the risk with innovative technology barriers, not to mention making it possible to virtually open and operate any kind of business being physically away.
But still, starting a business requires thorough research and preparation, let alone for a market such as the one in the US – vivid, ferocious, and turbulent.
It would be easier if there would‘ve been some guides to follow, and luckily for you again, here they come.
Like everywhere, any business owner looking to operate in the US must comply with the regulations before receiving a business license. These regulations vary from state to state and this is the first step of your US entrepreneurship – choosing in which state you’re going to operate.
Even as a foreigner, it depends if you’re going to be a resident of a certain state, are you interested in opening a physical branch, or if you’re going to be present in the country at all?
Have in mind that some states are more familiar and accustomed to doing business with international owners without local or physical offices, for example. Some of them have lower filing fees and business-friendly laws and some require only a US bank account.
What is Your Business Type?
Either way, in the US, two business “models” are federally recognized – an LLC and a C-Corporation.
A Limited Liability Company is a type to go with if you’re going to invest, in the real estate market, for example. This model allows its members full protection in case of most unfortunate harmful events like bankruptcy and lawsuits, while personal belongings and bank accounts information are kept safe and out of reach. The members can also share profit however they please, and it doesn’t come as a surprise that this is the most comprehensive and widespread type of business in the US.
However, to form and open an LLC, especially if you’re doing it virtually, without a local office, you must choose among several online legal service firms that specialize in LLC formation. Through reviewing IncFile, one can see the benefits of opening an LLC company online. It shows the perfect simplicity of following required steps and choosing which features will benefit your company the most – by choosing special entry-level packages. Some of them don’t even require a service fee.
This type of formation is for businesses including investors or members who own a certain “part” of the company. The only drawback is the “double taxation” system as each of those owners is taxed separately, just as business income is too.
Perhaps not as relevant to you as a non-US citizen. This formation type is only for residents and its main benefit, apart from the previous type, is eluding the “double taxation”.
Process Of Registration
After you have chosen your preferred business type, the state to conduct business in, and the name of your company – you can begin the registration process. Whether if you’re having a legal representative or you’re doing everything on your own, with or without a physical office, online or personally, it is only needed four days to finish the next steps:
- Get access to EIN (Employer Identification Number) – this identification number issued by the IRS allows you to operate your business legally, to open a bank account, hire employees, pay taxes…
- Opening a bank account – if you’re a resident, no problem. But as a foreigner, you can either open a bank account by showing EIN and go through necessary anti-laundry and anti-terrorism checks if you have a local office, or find any US bank in your country that will help you to open the account. In this case, your bank and the US bank need to have an agreement to accept the documents of each other.
- Obtain a US mailing address – If you have a local, physical business address, you can use that one, if not, you can rent one through several companies that provide US mail addresses.
- Get a merchant account – this allows you to receive and accept the payments, mainly via credit cards.
- Have a US phone number – and don’t restrain yourself because there are so many options – toll-free number, Skype number, or Google voice.
And there you are, with a little help from legal agents and their pieces of advice, you can quickly open your business in the US. The only thing left is to maintain it, but hopefully, you have a good idea to break through this saturated, demanding market, full of possibilities.