How to start a business as a foreigner?

Have you ever thought about pursuing a business idea in the United States but wondered if it's possible as a foreigner? The answer is yes, 95% of entrepreneurs and investors who have registered their businesses have done so safely without traveling abroad. 

But what should you consider when opening a business in the United States? In the U.S., you don't need a U.S. visa or a social security number to register a business. In fact, regardless of your immigration status, you can establish a company in the United States. However, here are some key points to keep in mind:

Create a Business Plan

Your business plan will serve as a roadmap defining your business goals, marketing strategies, pricing structure, financial projections, and more. Additionally, a solid business plan can be crucial for attracting quality investors.

Once you have a clear business plan, it's time to address the legal and administrative requirements. The next step is to obtain an Employer Identification Number (EIN) from the IRS and register your company at the state or federal level.

Be mindful of regulations

While you don't need a visa or a social security number to register your business, you must ensure compliance with all applicable local, state, and federal regulations and laws for your type of business. This may include compliance with tax, labor, and commercial regulations.

Choose the State

From the towering skyscrapers of New York to the sunny coasts of Florida, each state offers a unique landscape and different advantages for foreign entrepreneurs.

Every state in the United States has its own laws, regulations, and tax policies that will directly impact your business. It is essential to carefully consider these factors from the outset, as they will determine not only the legal framework but also the tax burden you will face. For example, while California's state tax stands at 9%, Delaware and Florida stand out for their low taxes and flexibility in business creation. With these options in mind, the decision of the state where you establish your company can make a difference.

It's time to create your LLC wisely!

Opening a bank account

Open a commercial bank account in the name of your company at a local financial institution. You may need to provide certain documents, such as the company's registration certificate and your personal identification.

Tax registration

Register your company for tax purposes and obtain a tax identification number or equivalent in the country where you operate. This will allow you to fulfill your tax obligations and file tax returns correctly.

Create your LLC

Before launching a company in the United States, thorough research is crucial. This includes understanding the target market, evaluating competition, and studying local and federal business regulations. Additionally, develop a detailed business plan that defines your goals, market strategies, financial projections, and risk analysis.

Receive a complimentary consultation and $1,340 worth of professional services with a simple click, and start saving on taxes with an LLC today.

Choose the business structure

One of the first steps is to decide on the legal structure of your company. Common options for foreign entrepreneurs include creating an LLC (Limited Liability Company), a C or S corporation, or a partnership.

Each structure has its own advantages and disadvantages in terms of liability, taxes, and operational flexibility, so seeking specialized advice will allow you to secure your assets.

In fact, you can obtain an Employer Identification Number (EIN) from the Social Security Administration for tax and employment purposes, even if you are not a U.S. citizen or permanent resident.

Complete your company registration

Once you have decided on the business structure, you must register your company in the state where you plan to operate. This generally involves completing application forms, paying registration fees, and meeting disclosure requirements, which may vary by state.

Additionally, you may need to obtain an Employer Identification Number (EIN) from the IRS if you plan to hire employees or open a commercial bank account.

What are the tax and accounting compliance obligations?

As a foreign entrepreneur, it is essential to comply with tax and accounting obligations in the United States. This includes filing corporate and personal tax returns, maintaining accurate financial records, and complying with local and federal accounting regulations.

Once your company is established, focus on operational management and continuous growth. Hire and manage employees, and explore expansion opportunities. Prodezk can provide ongoing advice to ensure regulatory compliance and tax efficiency as your company grows.

What documentation is needed to establish a company in the United States as a foreigner?

Owning a company entails responsibilities different from those of an employee, therefore, you will only require a visa if you decide to be involved in the daily operations of your business. Simply select one of our growth plans, and at Prodezk, we will take care of all administrative procedures.

• Document of identification from the country of residence
• A physical address in the incorporating state
• Availability of the company name

An LLC can offer flexibility in benefit distribution and may allow owners to avoid double taxation. LLCs offer flexibility in terms of how business income is taxed. The profits and losses of the business are passed on to the owners, who report them on their personal tax returns. This can result in a lower tax burden compared to other business structures.

With Prodezk by your side, the most influential tax and fiscal firm in Latin America, you have the key to unlock the doors of the American market. We specialize in assisting foreign entrepreneurs in establishing their LLC, connecting them with an unparalleled opportunity: over 340 million potential clients. Furthermore, our approach allows you to save thousands of dollars in taxes as you build your business in the United States.