How to Open a Company in the USA

Our guide to opening a company in the USA covers the advantages of being an American business owner, as well as the simple list of steps you need to take to get started. We also discuss solutions to the most common challenges that can arise, in order to help make your experience starting a business as easy as possible.

Benefits of Forming a Company in the USA

Did you know that you don’t need to be an American citizen to register a business in the United States? Anybody can do it, and it’s often no harder than it would be for a U.S. citizen. With that in mind, let’s take a look at some of the most common reasons entrepreneurs choose to form or expand their businesses in the U.S.

  • Limited Liability Corporations (LLC): LLCs are one of the most popular business types in America today, and citizenship is not a requirement to start one. The setup process for an LLC is the same for a foreign national as it is for a US citizen, and is quite simple.
  • Pass-Through Taxation: With an LLC, there are no corporate income taxes. This enables business owners to avoid “double taxation” effects caused by paying taxes both as an entity and an individual.
  • Employer Identification Number (EIN): No Social Security Number, no problem! When it comes to EINs — which allow you to file taxes and hire employees — it doesn’t matter if you live in the U.S. or not.
  • Legal and Compliant Revenue Streams: Foreign citizens can’t work in the U.S. unless they have a green card, but they can be a corporate officer or director.
  • Small Business Administration Loans: These federally guaranteed loans, with flexible terms and low interest rates, are available to U.S. and non-U.S. citizens alike.

Primary Steps to Start an LLC in America

Depending on what type of business you open, and in which state, the process could vary a bit. In general though, there is a pretty typical process for starting an LLC in the U.S., and you might be surprised by how simple it can be.

  1. Select a State: If you’re selling physical goods to a specific location, you may want to start your business in that state. If you will mostly be conducting business from your home country, then you might want to open your LLC in a state that has favorable conditions for foreign owners, like Delaware, Wyoming or Nevada.
  2. Designate a Registered Agent: If you won’t be physically present in the U.S. to receive important legal documents, you’ll need registered agent service. A registered agent in your state of formation receives these documents in the mail and forwards them to you in your home country (or elsewhere in the U.S.).
  3. File Your Articles of Organization: Once you prepare and file these documents with your state of formation, your LLC is ready to start doing business!
  4. Acquire an EIN: Whether you’re from the U.S. or not, you’ll probably need an EIN to operate your business, because it allows you to open bank accounts, pay taxes and hire employees. It’s a simple application process that is the same no matter where you’re from.
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Challenges to Overcome

While even these aren’t necessarily major hang-ups, it’s important to note that not every single step of the LLC formation process is a breeze for foreign nationals. Let’s take a look at a couple roadblocks you may run into along the way.

  • Opening a Bank Account in the USA: This is by far the most challenging hurdle, because it usually requires a trip to America to physically apply at a bank branch. If you choose this route, you’ll need to call the bank ahead of time to make sure you’re bringing all of the required documents. Different banks may have different requirements, so contacting them first is a must.
    There are some other options though. If you have ever opened a personal bank account in the U.S., you might be able to open a business account remotely. Additionally, depending on the nature of your business, you may be able to get by with a service like PayPal.
  • Obtaining an American Mailing Address: While you probably don’t need to open a physical office in the U.S., you will most likely need a valid mailing address, preferably in your state of formation. To accomplish this, many internationally located entrepreneurs like to use mail forwarding or virtual office services.

Quick Facts about Expanding your Business to the USA

Do I Need a Green Card or Work Visa to Open a Business in America?

Nope! Just like you don’t need to be a citizen to start a company in the U.S., you also don’t need work permits like a green card or visa.

Can I Work for My Business in the U.S. If I'm Not a Citizen?

Unfortunately, this is a scenario where you would need a green card. Of course, if you don’t have one, you can always work for your company from your home country.

What Business Entity Types Can Foreign Nationals Open in the U.S.?

We’ve already discussed Limited Liability Companies or LLCs, but that’s not the only business entity you can open as a foreign national. You’re also able to form a C-Corporation, which is not eligible for “pass-through” taxation like an LLC, but instead pays tax on profits as an entity while you also pay taxes as an individual for profit received as dividends.

There are benefits to a C-Corporation too though, primarily the varying types of stock interests owners can hold, which can lead to higher dividends if your company makes a profit.

Does the Legal Address of My Company Have to Be Located in the U.S.?

No, in fact it can be located anywhere in the world. Keep in mind though that in addition to your American mailing address, you also need a registered agent in the U.S.

Can My Company’s Name and Address Act as My Registered Agent?

You technically can do this, but it’s not feasible for most international entrepreneurs. For this to work, you need to have someone physically present at your company’s address during all standard business hours to accept and forward important government documents. Otherwise, you should probably just hire a professional registered agent service.

I Already Own a Company in My Home Country. Can I…

A. Name That Company as the Owner of My New American Business?

Absolutely. All you need to do is nominate your existing company to be the managing member of your new LLC.

B. Create an American Branch of My Existing Company?

Yes, but technically speaking it would not be considered a branch location, unless you establish the relationship between the two entities through internal resolutions, or via ownership as previously discussed.