COMPANY FORMATION IN USA

For foreign entrepreneurs, forming a company in the USA is a straightforward process, typically completed remotely. The two most popular structures are a Limited Liability Company (LLC) and a C-Corporation (C-Corp), both of which allow 100% foreign ownership. Key steps to form a company in the USA Choose a business structure: The right entity depends on your goals for growth, liability, and taxes. LLC: Offers flexibility, simple "pass-through" taxation (profits are taxed once as personal income), and limited personal liability. It is ideal for smaller businesses and solo entrepreneurs. C-Corp: Provides limited liability and is the standard for startups seeking venture capital or external investors. C-Corps are subject to "double taxation," meaning both the company and shareholders (on dividends) are taxed. Select a state for incorporation: While you can incorporate in any state, Delaware and Wyoming are popular choices for non-residents due to their business-friendly laws, low costs, and strong liability protections. Choose and register a business name: The name must be unique and comply with your chosen state's naming rules. You can use your state's business registry or the U.S. Patent and Trademark Office database to check for availability. Appoint a registered agent: A registered agent is a person or service with a physical street address in the state of incorporation authorized to receive official legal and tax documents on your company's behalf. File formation documents: For an LLC: File the Articles of Organization with the state's Secretary of State. For a C-Corp: File the Articles of Incorporation with the state. Obtain an Employer Identification Number (EIN): An EIN is a federal tax ID assigned by the IRS that is required for opening a U.S. business bank account, filing tax returns, and hiring employees. Non-residents without a Social Security Number can apply for an EIN by mail, fax, or phone. Open a U.S. business bank account: This is necessary to separate your business finances from your personal ones. Many fintech companies, like Wise or Mercury, offer convenient online bank account opening for foreign entrepreneurs. Register for licenses and permits: Depending on your business activity and location, you may need additional state or local licenses. The Small Business Administration's permit and license guide can help identify specific requirements. Important considerations for non-residents Visas: Owning a U.S. company does not automatically grant you the right to work or reside in the U.S.. You must obtain the correct visa, such as the E-2 Treaty Investor Visa, to work on-site at your U.S. company. Taxes: Tax obligations vary based on your business structure and whether your income is "effectively connected" to a U.S. trade or business. It is highly recommended to consult a qualified tax professional to ensure compliance. Compliance: Your business must stay in good standing by filing annual reports and paying any required franchise taxes in your state of incorporation. As of 2024, most LLCs must also file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN).