How to Start a Business in USA – Company Registration.
Every business owners, who start the business anywhere in the world, wants to have a footprint in US market. The attraction is such that opening a company in USA is considered as an easy way to get investors attraction, attract new customers and improve the visibility to sell to the rest of the world.
- To Open a bank account and this helps to collect local customer payments and need to worry about additional charges etc.
- Improves the Company brand image and gives confidence to overseas customers to believe and buy your product or services at the reasonable price.
How to Setup a Company in USA.
It is fairly simple and straightforward process. You can open a LLC or some other business formats from Online mode, but to work, you need a valid work visa. Non citizens are allowed to become directors in the US formed companies and there is no problem.
Steps to follow to start a Business in USA
- Decide what type of business is good for your needs? Decide which state you should form your LLC?
- Find a local registered agent, if you are in overseas as this person can help to move the papers and complete the registrations.
- If applicable, register your Limited Liability Company (LLC) or S-Corporation. (C-Corporation is public limited company and need to follow many tax rules)
- Apply for an EIN and get a US mailing address. (Employer Identification Number (EIN) is a nine-digit number assigned by the IRS. EIN is required for opening a US bank account, hiring employees and filing various business tax returns)
- Open a US bank account.
- Open a merchant account so you can accept payments from customers.
- Get a local US phone number for your new business. There are few companies that give you an instant US Number to call the customers etc. Even you can have the same sitting at overseas.
- Research what your tax liability is going to be.
- Please keep all of your expenses and bills properly.
- Make sure you’re in compliance with your city, county, state, and federal requirements. This is one the parameter to decide where to open the LLC.
Which Business type is good for you?
LLC – Limited Liability Company – The Limited Liability Company (LLC) is one of the most popular business structures among smaller organizations and start-ups. This helps owners to remain free from a great amount of government formalities and provides limited liability protection for its business owners. LLCs are also eligible for “pass-through” taxation, which means that the company’s income taxes are only reflected on owner’s personal tax returns, not at the business level. This helps to reduce the paper work and ensure that personal tax takes care of business taxes limit.
C-Corporation – Most large companies are formed under this structure as it offers many tax related benefits to its owners. This helps company to raise capital through the issuance of publicly traded stock and generate money from people.
S-Corporation – The S Corporation is similar to C Corp, with a few notable differences. The most important of these differences is that S-Corporations are eligible for special taxation status with the IRS. This allows S Corporation owners to avoid double taxation on their business income.
Now you know which one to select and choose the formats.
How long it takes to complete all the process?
Processing of the above requirements might take time depending on whether you are local director or a foreign national. Getting an EIN may take around 30 days and you might need to wait to complete the process.
Lets explore some more details or information that could help your decision making process.
From where to begin the business? Which City, County or State?
One of the challenges in US is the tax laws and few exemptions based on the City, County and State. It also depends on what items you want to sell as you should know which state allow what type of items (for example- Cannabis Sales)
- Tax rules
- How you can manage your budget with Office, insurance, Employee salary etc.?
- Demographics and easy access to good resources
- Do you have necessary customer base nearby or what kind of competition you have?
- Is your product distribution depends on Rail or Ship or Road transport?
As we explained with an example, each requirements and conditions are different depending on the type of business you want to start like Software, Consulting, Manufacturing unit etc.
Setting up a Company in USA by Foreigner.
Can Foreigners register a company at USA?
As a foreign national, you might need to check the type of work permit and other conditions necessary details to work at USA. LLC is the most preferred model to start a company in USA.
Yes, you can register and start a company.
Recently few Startup ecosystems help other Founders to start their company at USA. Even though it’s more to attract the new startups, but also it’s a community service to build the ecosystem. This is very attractive and more dependable as the assumption is, they do understand startups founders problem.