Thanks to today’s more advanced technologies, starting a corporation in the US has become easier than ever. In fact, there are numerous incorporation services that can help business owners establish their business entities with ease and efficiency.

However, the process tends to be a bit different and sometimes more complicated, for foreigners, especially for those who are unfamiliar with the country’s rules and regulations.

Nevertheless, starting a company in the US can be an excellent step for foreign business owners looking to expand their operations and benefit from the country’s thriving business climate.

With that said, continue reading to learn more about how to start a corporation in the US as a foreign national.

Starting A Corporation In The US: Is It Possible For Foreigners?

Before delving deeper into how you can start one, let’s first discuss if starting a business in the US as a foreign national is even possible. In this case, the answer is yes; it’s entirely possible for foreigners to start their own business in the US.

In fact, numerous well-established brands in the country are foreign-owned, including “classic” American household names like Budweiser, Lucky Strike, and Purina.

While foreign business owners have more hoops to go through than US residents, the process isn’t as arduous as you might think.

Starting A Corporation In The US As A Foreigner: A Step-By-Step Guide

Now that you know that you can start a corporation in the US, even as a foreign national, let’s move on to how you can actually do so. In this case, there are a few steps you need to follow when starting a business in the US.

1. Select your company’s structure.

When it comes to incorporating your business on US soil, you typically have three options to choose from. In this case, you can choose to create an LLC, S-Corporation, or C-Corporation. Most foreign nationals who start a business in the US prefer establishing C-Corporations because these allow them enough room for future expansions.

Moreover, C-Corporations allow them to offer unlimited stocks to shareholders, making them more attractive investment options. However, if you’re a small business owner, going for an LLC is usually more recommended.

Establishing an LLC is generally more manageable, both for locals and foreigners alike, as it offers fewer restrictions in most states. For example, if you want to start an LLC in Texas, you are required to register your foreign LLC with the state of Texas to operate your business in Texas. If you do business without registering, you cannot bring a lawsuit in any of the state's courts. Plus, the LLC will be subject to a civil penalty equal to all the fees and taxes. On the other hand, foreign nationals aren’t allowed to create S-Corporations without having US residents as shareholders.

2. Choose what state you’ll register your company in.

Once you’ve decided what corporate structure your company will have, you’ll then need to select your state of formation. In this case, it will be best if you register in a state where your company can thrive the most.

For example, if you need investors for your company, Delaware is generally the ideal location for your new business. Moreover, aside from having a larger pool of investors, Delaware is also known for having a business-friendly legal climate, mainly due to its more flexible corporate laws.

3. Register your company.

Once you know where to establish your company, you can proceed to register your company in the said state. In most cases, you can avail of incorporation services for quicker and more efficient processing.

Of course, you can also register your company yourself, but the process can be time-consuming and complex. In addition, US states require companies to have a registered agent, so you’ll need to find one for yours as well.

Overall, the process for registering your company in the US tends to be similar to the ones residents undergo.

4. Apply for your business’ EIN.

Once you have registered your company, the next step would be to apply and obtain your company’s EIN or Employer Identification Number. This is a necessity for all businesses, locally or foreign-owned.

An EIN not only allows you to hire employees for your company but it’s also needed if you’re opening a US bank account or applying for business licenses.

Moreover, your EIN is also necessary when paying business taxes. In this case, you can apply for and obtain your EIN with the IRS, which you can do for free.

5. Open a US business bank account.

Once you have your company’s EIN, you can now proceed to open your own US business bank account. Doing so will allow you to make financial transactions for your company more quickly and conveniently.

In fact, having a US-based business bank account means that you no longer have to hop on a plane whenever issues arise.

Benefits Of Starting A Corporation In The US

Although the process can be a bit more complex for foreign nationals, it can still be a good idea to establish your company on American soil. After all, in the US, you can enjoy numerous benefits for your business, including the following:

Low-cost and more straightforward banking transactions
A more established reputation, especially when conducting business on an international level
Easy operations
Convenient establishment
Fast processing
Business-friendly tax environment

Of course, these are just some of the advantages; there are numerous other benefits to starting a company in the US.

Final Thoughts

Overall, the US offers lucrative opportunities for foreign nationals who want to establish their companies in the said country. Not only does doing so add credibility to your business operations, it also enables you to explore more options to increase your company’s growth.

Miscellaneous

Starting A Corporation In The US: A Guide For Foreigners