It’s not unusual for non-residents to ask this question, How to start a business in the USA as a foreigner? when they make it to America. It’s imperative to mention that many non-residents are setting up businesses in the United States every day. From major operations to small merchant shops, setting up a company in the USA by a foreigner is not as difficult as some may think.
Owning a U.S. company is the best way to reach this market with your services or products. You will be in a perfect position to take advantage of an ideal market with a low tax rate.
In this article, you will see that starting a business in the USA offers some incentives that you cannot afford to turn down.
Before we go any further, let’s go over several benefits of owning your own company in the United States:
- From the customs and tax perspective, it’s easier to market goods and services in the USA
- You will not have any problems finding public or private investors for your company
- It’s easier to build your brand here in the states
- Contrary to popular belief, it’s easier to get a visa for work in the United States. However, it’s critical to mention that there is no guarantee you will get automatic acceptance
- You have a golden opportunity to cut your taxes on income earned in the U.S.
How to Start a U.S. Business from India
When you read the business periodicals in America, it doesn’t take a rocket scientist to see that some people would like to know how to start a business in the USA as a foreigner.
These six important points must be addressed before you make an earnest effort to get your new business off the ground.
- The type of company you would like to set up
- A C-Corporation versus the LLC tax alternative
- The state in which your company will be incorporated
- The demographic market for your business affairs
- The nature of your business activities
- Applying for permits, registrations, and licenses
How to Start a Business in America for Foreigners
Let’s take a quick look at a checklist that simplifies matters.
- What state to incorporate your new business
- Protecting the following: patents, logos, trade secrets, and trademarks
- Determine if you need to apply for a special license for your products or services
- Requirement for visas
- Hiring a qualified staff
- Funding source
- Marketing and support services
- Tax incentives
- Where to set up your new business venture
Can a noncitizen start a business in the U.S.?
Yes, you can become a successful business owner if you are a noncitizen.
You should go to Score if you need a free business template.
Getting Things off the Ground
Your first step begins with deciding where you would like to set up your new business.
If you’re interested in running an internet business, you should think about registering in a state with a low tax rate.
In this instance, you should consider Delaware or Nevada. Many new business owners prefer Delaware because the shareholders and directors are shielded by corporate law.
Proper Preparation for Your New Company
At this point, you will address the following matters:
- The name of your firm or company
- Selecting a limited liability company or a corporation
- The value of your company’s shares
- Select your shareholders, directors, and officers
- Determine their responsibilities
Taking Business Action
How to start a business in the USA as a foreigner? These steps will help you start your new business in the U.S. as a non-resident.
- Get the proper legal documents
- Fill out the proper incorporation documents with the state’s filing office
- If necessary, register your new company with other states
- Hold a meeting, select your officers, and issue your company’s shares
- Make sure you get your federal employer identification number
- Fill your BE-13 Survey with the United States Bureau of Statistics
- Set up an account at a reputable bank
- Start running your business. This includes the following: getting space for your company, hiring your new staff, and promoting your products or services
Now that we have taken a quick look at how to start a business in the USA as a foreigner, it’s time for us to dive into the details.
You need to read them carefully.
They can help you avoid the obstacles that make it difficult for some non-residents to pursue their dream as a new business owner.
Where Should You Begin?
You should ask yourself the following questions:
- What would you like to do in the United States?
- How would you like to do it?
- How much money do you need to start your business?
Where should you set up your new business?
Choosing a location for your new company is probably the most important decision you will make. Each state in America has its own tax schedules and business regulations.
Please keep in mind that once you choose your business location, it will be expensive to change it. Your company’s location should be ideal for business goals.
Here are some important points to take into consideration:
- The demographics for your employees and customers
- Competition in your market
- Overhead costs
- State’s laws, taxes, and regulations
- Potential Risks
Evaluating your goals and priorities will help you choose the best place for your business.
Safeguarding Your Intellectual Property
You need special legal counsel to help you protect your company’s intellectual property.
Make sure you hire an attorney with years of experience in this field.
Obtaining Special Licenses
Before you worry about how to start a business in the USA as a foreigner, you must get a license for your company.
Licensing regulations vary from state to state.
We’ve seen a rise in the number of non-residents starting Professional Limited Liability Companies. As we stated earlier, Nevada and Delaware offer adequate protection for your company.
Getting a Visa
How to start a business in the USA as a foreigner is one subject that leads some to believe they need a visa.
This may sound strange, but:
You don’t need a visa to start and own your company in the United States.
Running a limited liability company outside the boundaries of America is permitted, but you may need a work visa if you are in the states.
It’s also important to mention that you do not need a work visa if you are planning on being the director and shareholder of a U.S. corporation. However, you cannot be an officer and conduct your business affairs within the United States.
It’s not legal for you to work for your Limited Liability Company or corporation within the United States without a work visa.
Here is a solid source that has more information about business visas: Types of business visas
Staffing Your New Company
As you can see, your citizenship cannot hinder your chances of starting a new business in America, but you must consider the fact that you may need to hire employees for your company.
- Here are several important questions you need to answer:
- Will you hire qualified people in the United States?
- Are you bringing company officers to the United States?
- How many of your company officers will need visas?
- Are your new employees coming from another country?
We must mention that it is becoming more difficult to import staff members from another country. This obstacle is frustrating for many new non-resident business owners.
Fortunately, you can get over this obstacle by proving your employees have special skills.
If you can prove this, your employees would be eligible for a Visa 1, Visa 2, or Visa 3 within the O-Series category.
The federal tax I.D. number issued to your business will serve as your Employer Identification Number.
Getting Funding or Investment Capital for Your Company
How to start a business in the USA as a foreigner? This is an important question, but you will need money for your new business venture.
You don’t have to be a rocket scientist to know that you need funding or investment capital for your new business. You must think about your funding strategy before starting your business in the United States. Taking heed to this simple tip will help you keep things in their proper perspective.
We must be honest with you. Securing capital for your company will be challenging. However, this does not mean that it cannot be done.
Where should you go for funding?
This is an excellent question. There are different funding sources. Let’s take a quick look at them.
Large Commercial Banks
Large commercial banks are typically the first funding source non-residents go to for funding. These banks have plenty of cash, but they are notorious for having strict lending guidelines.
If you don’t meet their lending criteria, they will not hesitate to turn you down. To improve your chances of getting capital from a large commercial bank, you must have a solid business plan. This can help start the dialogue between you and the lending officer.
Please keep in mind that this does not guarantee that you will get approved for the business loan. There are dozens of large commercial banks throughout the United States.
Target those that have a good reputation for working with non-residents.
Small banks are worth taking a look at. They are more flexible with their lending terms.
There’s a strong possibility that you can get your funding from a small bank. You can find reputable small banks in online telephone listings and business directories.
How to open a company in the USA non-resident?
Following the guidelines in this article will help you, but you need investment capital to get things underway. Private lenders have helped thousands of non-residents start their business in the United States. Private lenders are known for having loose lending terms.
However, their interest rates must be taken into consideration.
In many instances, the interest rate for a private loan can range from 10% to 18%.
This is pretty high when you compare these interest rates to the interest rates being offered by large commercial banks and small banks. Private lenders market their services in business publications. Make sure you do your due diligence before doing business with a private lender.
This will help you secure a good deal with a private lender who has your best interest in mind.
These types of lenders will give you capital for your U.S. company, but they want you to give them an equity position at your company. In short, they want a piece of your new operation.
Let’s say you send your proposal or business plan to a venture capitalist. If they are interested, they would like to be a partner. Their equity position at your company can be anywhere from 30% to 50%.
What does this mean?
It means that you will have to share your profits with the venture capitalist. It also means that you may have to consult with them before making major decisions with the company.
This may be a small price for you to pay if you’re serious about getting started with your new venture.
If you decide to go with a corporation, you can sell company shares. This is a reasonable avenue to take if you’re not interested in applying for a loan. To be honest, selling shares is probably the easiest way to raise capital for your business.
Your Company’s Needs
How to start a business in the USA as a foreigner? Following the solid guidance in this article will help you get off to a great start.
As a new business owner, you must make sure your company’s needs are covered. Let’s take a quick glance at them.
- Warehousing your products
- Making sure your products comply with U.S. laws or regulations
Should you take tax incentives into consideration while searching for your company’s location?
Some cities and states will make an effort to convince you to set up your business in their area. They may believe your company can help create new jobs.
You should only entertain this incentive if your company creates at least 100 new jobs for that area. If your company does not create a minimum of 100 jobs, you should focus on a city or state that will be beneficial for your marketing.
The Planning Stage
How to start a business in the USA as a foreigner? It’s not unusual to find this question being asked in many only business forums being visited by non-residents. We are now at the planning stage.
During the planning stage, you must address the following:
- Is your company’s name being used by someone else in the United States? You must conduct your research before incorporating your new business. The United States Database for registered trademarks can help you find out if someone has registered that name. It’s critical to point out that if someone else is using the name you have in mind, you will not legally be able to register that name for your business. Besides, it would be extremely tough for you to rank your company’s website in the search engines if you’re sharing your name with another company.
- Are you interested in creating a subsidiary of a larger parent company? You must make sure that you use different names. This will help you avoid any potential misunderstanding.
- Find out if someone is using your company’s potential website address. If someone has that domain, you must choose another one.
- The name of your company must convey a clear message to your targeted audience. Your company’s name must make sense to people in the United States. If it doesn’t, it will be extremely hard for you to build a customer base.
We are providing you with the details, but you will have a tough time being successful if your prospective customers cannot relate to your company’s name.
Having a company name that connects with U.S. culture is the key to building a good brand in America.
Should You Go with a Limited Liability Company or a Corporation?
We know you would like to know how to start a business in the USA as foreigners.
You must decide if you would like to start a corporation or an LLC. Checking the laws within that state will help you make the right decision. Each state has its own laws.
Let’s say your company is selling goods or services in three different states. Your company must abide by the laws set forth by each state.
To make things simple, you will be dealing with three different sets of laws. We must also point out that your company’s name is only protected in the state that it’s registered in.
Where Should You Incorporate Your Company?
Once you have chosen the desired place for your company, it’s now time for you to select your state of incorporation.
You can save money by incorporating it in the same state as your business.
You are not required to do this, but this move can help you save a significant amount of money.
Calculating the Value of Shares
If you are selling company shares, this is the point where you figure out the value of each share, and the amount you plan on distributing to shareholders.
The Roles of Your Company’s Officers
How to start a business in the USA as a foreigner? As you can see, we are covering the vital points that will help your company get off to a great start.
It’s now time for you to determine the roles of the officers in your company.
The officers will be the secretary, treasurer, and president. Your officers will be able to sign legal documents and make decisions on company affairs. Make sure you choose your officers carefully.
They should be loyal and dependable. If you have a large company, you may want to think about setting up a board of directors.
The board of directors will select the company’s officers and oversee your company’s direction.
Make sure you give them insurance. This will shield them from potential lawsuits filed by the company’s officers.
You’ve laid the groundwork for your company. The hardest part is out-of-the-way. At this point, everything should be smooth sailing.
Complete the Legal Forms
It’s time for you to fill out the forms and pay your legal fees required by the Secretary of the State. If you are doing business in other states, you must register your business in those states.
Get Your Federal Employer Identification Number
You cannot hire employees and open a business account without a Federal employer identification number.
When you file the SS-4 form with the Internal Revenue Service, you will get your tax number.
Complete and fill the BE-13 Survey. You must fill it with the United States Bureau of Economic Statistics.
Opening Your Company’s Business Account
You need a U.S. bank account if you plan on doing business here in the states.
Your customers will trust you, and you will be showing the United States Government that you are a legitimate operation.
Here are the items you need to open your company’s account:
- A copy of your passport
- Proof of your address
- A business incorporation form
- Your tax identification number
Are You Ready to Get Started
How to start a business in the USA as a foreigner? This is a repetitive question, but it must be addressed. Would you like to buy or lease office space? If you want to buy office space, you can work with a commercial broker. They will be more than happy to find space that will be ideal for your company’s marketing scheme and budget. If your company’s funds are tight, you should consider leasing office space.
Some new non-resident business owners take the route of sharing space with other companies.
Choose an option that will be ideal for the company’s finances and daily operation.
Hiring Your New Employees
You can place advertisements in local newspapers, check out local universities or you are bound to find qualified applicants with a two-year associate degree.
Make sure your ads point out that you’re interested in hiring non-specialized labor.
Check the minimum wage labor rate in your state. This will help you avoid legal issues with the authorities.
How to Start a Business in the USA as a Foreigner – Final Word
How can you start a business in the USA as a non-resident?
Following the guidelines listed above will help you set up a company in the United States with ease.
There are so many opportunities in America. Setting up your business properly will set a solid foundation for your new enterprise.
It’s time for you to make your dreams come true. We wish you well!