Whether you’re an experienced entrepreneur or a complete newbie, starting a business in a different country is an exciting and daunting prospect.
Opening a business in the US is relatively simple, even for a non-US citizen – although that doesn’t necessarily mean it’ll be easy. You’ll need some inspiration, you’ll have to do a significant amount of homework and planning, and you’ll need to be brave to throw yourself behind your idea.
Sound like an invigorating prospect? Here’s all the essentials about starting your business in the US as a non-citizen.
Do I Need a Visa to Open a Business in the US?
Non-citizens can open a business in the US. However, doing so does not give you the right to live or work stateside. That probably means that you’ll need to get a suitable visa to make your American dream work out.
There are various different visa options, depending on whether you intend to stay permanently in the US, or if you’re making a temporary move. If you’re not planning on permanently immigrating to the US an E-2 class visa may suit you.
This visa type is intended for investors with either a 50% ownership, or substantial control over an enterprise. E-2 visas are normally issued for 2 years, with the option to extend for further 2 year periods. It’s worth noting though that this visa type is meant for people who intend to leave the US eventually – it’s not a way to gain permanent residency down the line.
If you’re moving to the US on a permanent basis and investing USD900,000 or above into your new business, you may be interested in the EB-5 class visa. This visa has fairly strict eligibility criteria, but may be suited to some committed
Types of Businesses Non-US Citizens Can Open
The most common business structures chosen by non-US citizens are:
- Limited Liability Company (LLC)
- Corporation (C-Corp)
In an LLC, owners are known as members. Members can be individuals, other businesses and foreign entities – there’s no upper limit to the number of members, although you can be a single owner with no other members, too.
LLC members have limited liability – meaning that their personal assets are treated as separate to the business. If the company is in financial trouble, or faces legal action, personal assets can not usually be seized. LLCs also have different record keeping and accounting rules compared to other types of business, which can be attractive if you’re just figuring out how running a business in the US may work.
The exact rules around forming an LLC are dictated by state laws, so you’ll want to check out the fine print wherever you intend to settle in the US.
Corporations have a different business structure and are owned by their shareholders. The taxation for C-Corp businesses can be more complex, with profits taxed both at corporate level and when they’re handed to shareholders as a dividend. However, because a corporation can offer further stock to investors – and therefore raise funds and expand – this can still be an attractive option for some entrepreneurs headed to the US.
What is the Process of Registering a Company in the US?
Once you’ve chosen the type of business you’ll set up, you can get registered. There’s lots of helpful advice online from the US Small Business Association which can help guide you through the process in great detail. Here are the key steps you need to know:
Choose your business domain and name
Your business name will be important – not only do you need to choose wisely, you’ll want to make sure your name is protected and can’t be copied. You can protect your name at a state level with entity registration, or trademark it to get federal level protections. You may also need a DBA (Doing Business As) registration, depending on the type of business you have.
In addition to registering your name, don’t forget to get your online presence sorted early and register your business website domain name.
Research the requirements for the state you’ll register your company in
Different locations mean different taxes, business laws, permit requirements, minimum wages, and more. Choosing your location well can make a big difference to the success of your new venture.
Check out the options which may suit you, based on where your target market is, as well as the local laws, costs and requirements. If you already have location ideas in mind then you can narrow your search that way. If not, you may choose to start by looking at local and state taxes, or incentives for new business owners which could make a particular spot stand out.
Gather the necessary documents to register your business
Once you know where your business will be, it’s time to register. Gather all the paperwork in advance so you’re ready to get started. The exact documents you need will vary according to your company structure, but you can expect to need:
- Full business name and location
- Ownership information
- Registered agent detail
- DBA if required in your state
- Share information including the number and value issued – if you’re registering a C-Corp
You’ll also need paperwork including your Articles of Organization and LLC operating Agreement (for LLCs), and Articles of Incorporation, byelaws and resolutions (for C-Corps).
The actual process for registering your business will depend on where you’re based. You may be able to register online, or you may have to mail in paperwork and an application. Check out the information for your state, online.
Open a company bank account
As soon as you need to send or receive payments on behalf of your business, you need a business bank account. Separating your personal and business finances is essential to keep your records straight and make it easier to file taxes later. Check out the different bank accounts which may suit your business, including products from the traditional banks which are near to you, and modern online alternatives.
There are many business bank account products out there, from simple low fee accounts through to more advanced options which may come with higher fees, but also offer more perks.
If you’re founding an international business, you’ll also need a reliable way to pay international supplier invoices, manage overseas payroll, and receive customer payments in foreign currencies. You’ll find you have several alternatives when it comes to sending and receiving international money transfers, and managing money across different currencies. Compare international money transfer providers to make sure you get the best deal for your business needs.
Seek professional advice for accounting, taxes and legal issues as required
Finally, remember you’re not doing this alone. You’ll almost certainly run into issues you don’t know how to tackle when you found your new business. Help is out there, whether that’s an accountant, a lawyer, or a business advisor who understands your local market well.
Choose from free online resources, or employ specialists to cover the specific needs of your business.
Beware the Costs of Starting a Business
Having a solid business plan in place before you open your doors is the best way to ensure your success. However, even with the best laid plans, things can go awry.
It’s especially important to consider the costs of starting your business in detail, and make sure you have the funds available to cover all eventualities. You’ll need to think about everything from your registration fees and website hosting, to equipment, office space, raw materials, payroll, and utility costs. Getting some support from a local business advice service can be a real help here – providing real time examples and ways to manage and cut costs in your specific location and niche. Don’t forget also that you’ll face some variable costs which can go up and down month on month – so you’ll also need a buffer to make sure you can pay your bills even when they’re on the higher side.
Learn more about how to estimate the costs of starting your business before you get started – and give yourself the very best chance of building a flourishing enterprise.
Opening a new company is an exciting idea. Setting up a new business in a new country can be an even bigger adventure. If you’re thinking of starting a business in the US, you’ll want to invest time in research and planning covering everything from what you’ll do, to where you’ll base yourself. You can start with the simple steps outlined here, and make full use of the resources available online and in person, to build out your plan and get started on your new journey. Good luck!