HOW TO SET UP A US COMPANY AS A NON-RESIDENT

Non-residents who want to establish a US business have more steps than US residents. And there are more consequences if they make mistakes. Non-residents can face more tax problems if they want to withdraw their income from the US. Opening a bank account and obtaining a US work visa are other problems. Each one of these subjects is extremely complicated. You need to not only create a viable business model but also make it fit within the US legal, tax and economic environment.

These steps are the most important steps to take before a business can launch.

1. What kind of company is being established
2. S Corporation, C-Corporation Versus LLC tax Comparison. (S) corp status is not available for non-US residents.
3. Which state will the company be incorporated?
4. The US where the company will do business
5. The type of business and the need for permits, registrations and licenses.
6. Staffing requirements influence the physical location and size needs of facilities.

STEP 1: DETERMINATION STAGE

Decide what you want, where you want it to be done, and how much it will cost. Also, consider your budget.

• How to start a US business
• How to incorporate your US business
• Protecting your intellectual property is essential, including trademarks and logos, as well as trade secrets and patents.
• Determine whether you will need any special licenses to operate your product or service. Many businesses require licenses or permits to trade, including professional services such as medicine and architecture. After you have determined which state you intend to operate your business, you can contact the government of that state to determine what permits or licenses may be necessary for your activities.
• You will need to apply for visas and other forms of immigration If your business is to be conducted in the US, you will need to have someone to manage it. Although you can hire Americans to do the job, you will need to keep an eye on it and provide oversight, if necessary, active leadership. You will learn more about visas for business if you plan on spending more time in the US.
• The staffing requirements of the business. This will impact your budget, the need for office space, and your knowledge about US federal, state, and local employment laws.
• Accessing the capital markets in the US is your need: Are you self-funded, looking for loans or grants?
• Marketing, supply chain and support services are what you need.
• What tax incentives are there? How can you reduce your tax burden?

SCORE (Service Center of Retired Executives), offers free business planning templates. You can also use the lean canvas to plan your strategy for a new company. It is free for 30 days and extremely useful. (We are not affiliated with either site in anyway).

STEP 2: PLANNING STAGE

The Company Planning Step will help you to determine practical issues such as:

• Enter the name of your company
• Whether you are a corporation or a limited-liability company
• Where to incorporate and where to register in
• Calculate the capitalization of the company. This is the number of shares at what value and the amount each shareholder will contribute as their capital contribution to the company.
• Designate who will be the officers, directors and shareholders
• Determine the roles and responsibilities for the company's directors and officers

STEP 3: TAKE ACTION

These are the steps you need to take in order to open a new US business.

1. For due diligence, provide required documents
2. You must file the necessary paperwork to form the company with the state filing officer. Follow up with any other requirements. Each state has its own requirements.
3. Register the company in any other state if necessary
4. Hold an organizational meeting to appoint officers and directors, issue shares to shareholders, and take any other necessary actions
5. Get the federal Employer Identification number
6. Prepare and file Be-13 Survey with the US Bureau of Economic Statistics
7. Open your bank account

1. Register a business in the US: Buy, Lease or Rent Office Space, Hire Employees, Market the Products, etc

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STEP 1 - DETERMINATION STAGE

Identify what you are looking for, the location and method you would like to use, the cost, and whether you have the funds. This step is critical:

• How to start a US business

The most important decision you will make is where to locate your business. Once you have made a commitment to the location, it can be difficult to change. Each state has its own tax schedules and business regulations.

You should choose a location that meets your business goals in the most cost-effective way. A company must identify the main drivers of the location selection process from the beginning.

Here are some of the things to keep in mind:

• Demographics of your customers and/or employees
• Your supply chain requirements
• Local competition
• Other overhead costs include
• Labor
• Purchase or rent a property
• Utilities
• Corporate taxes
• Incentive
• Laws, regulations, taxes, and other laws of the state and local governments
• Quality considerations include, but are not limited to:
• Labor skill levels
• Flexibility in labor (union/nonunion, seasonality).
• Connectivity
• Infrastructure
• Risques
• Quality of life

You can break down all of these factors into sub-factors. You can make an informed decision about your future location by assessing your priorities.

FURTHER READING...

Choosing the state of incorporation

3 Methods to find the right place to start your business

• Protecting your intellectual property is essential

• USA Corp can recommend qualified and vetted IP attorneys who are experienced in your area of business, such as trademarks, logos, and other intellectual property.

• What licenses you'll need

• The US has many licensing regulations. Each state's laws will determine the exact requirements.
• There has been an increase in the number of PLLCs, Professional Limited Liability Corporations.
• The most common locations for incorporation are NY and Delaware

• You have a need for visas and other immigration requirements

A visa is not required to start or own a US business. A work visa is required to enter the US to work as an employee in the management of a company.

While you can be both a director and shareholder of a US company, it is not possible to be an officer or perform your duties in the US. It is illegal to work for your LLC or corporation in the US without a valid visa.

• You have to hire staff for your business

• What number of company officers will you be bringing to the US?
• Are you going to hire employees in the US, or will you?
• Do you plan to bring employees from abroad?
• If you have highly-skilled staff that is not easily attainable by US employees, it has been more difficult to bring staff from abroad in the last two US administrations. Your staff could be eligible for an O-Series Visa 1 or 2.
• Your federal tax ID number for your business is doubled as your EIN (Employer Identification Num).
• These are two companies who can provide payroll services for you and file your payroll taxes on behalf of you:

• Access to capital markets in the US is a must

• These services are not offered by USA Corporate Services. However, you should consider financing before bringing your company to the US.
• Which person/entity will own the US business? (i.e. What is your capitalization table? Are you able to keep track of your shareholders?
• It is very difficult to secure a loan.
• Venture capital and equity investment are both difficult, but not impossible.
• Read more in our free eBook: 7 Mistakes That Non-Residents Make While Setting Up A US Company

• Marketing, supply chain, and other support services are what you need.

Take into account your service requirements

• Transport
• Import
• Shipping
• Warehousing
• sales/brokerage
• Travel
• Repackaging
• RFID
• Conformance of product to US regulations

Do tax incentives play a role in your decision-making?
Certain states and cities offer tax incentives to encourage companies to move to their area. Creating 100+ jobs in the local area. If your business is sufficiently large or provides enough job creation potential to give leverage to a locality, tax incentives shouldn't drive your decision-making about where you want to locate.

• Film and manufacturing are good industries to consider tax incentives when making decisions.
• All potential incentives would be discussed at a local level
• Tax incentives are not a factor for small businesses.

STEP 2 - PLANNING STAGE

IN THE COMPANY PLANNING STAGE, YOU WILL DETERMINE PRACTICAL MATTERS LIKE:

NAME OF COMPANY

• Is the company name already registered in the US? A full legal search is required before you incorporate. However, you can get started by searching this government database of registered marks. You will not be permitted to use the same name for the same company in the same service or product sector. Keep in mind, however, that if you copy a well-known company name for your business it will be difficult to rank high in search engines when customers are searching for you.
• If you are able to do so, conduct a trademark search on your name and tagline. Companies have been sued when they use the tagline from another company. A Texas florist used the tagline "This bud's For You", but it was an Anheuser Busch trademark, so the florist was sued.
• Do you want to set up a subsidiary for a parent company? You might want to distinguish these names for clarity. You might change the name of the U.S. subsidiary of a UK company from "Ltd" into "Inc."
• To find URLs that are relevant to your company name, do a search.
• Consider the audience your company's name is intended to reach. Is the name appropriate for the US audience you are trying to reach? Is it associated with the American culture?

It is important to be familiar with the differences in the US business entities for non-residents who are forming new companies. The law that governs business entities is always state-based. Each state has its own laws so the requirements and rules are different. The business entity can do business in the state it was formed in, but they must register in order to do so in other states. Although the definition of "doing company in a state" is not the same for every state, there are some common themes.

Each state maintains its own list of names. The proposed company name is only verified in the state where it was created. A company name is protected only in the state it is created and any other state it is registered to do so.