How to Start a Business in the US in 6 Steps

Contributed article in our business series. Enjoy! – Kimberly

Incorporating in the United States can increase the credibility of your business on the international front, and it is invaluable if you’re selling to Americans. It is even possible to open a business in the United States if you aren’t an American citizen, and you may not even need to be a legal resident. This allows people from around the world to take advantage of business structures like the limited liability corporation. Let’s discuss how to start a business in the US in 6 steps.

Choose the Type of Business You Want to Form

There are two main types of business structures open to those who are not U.S. citizens or long-term residents: the LLC and the corporation. An LLC is a limited liability corporation. It limits your liability in case of a lawsuit. The main benefit of an LLC is that it doesn’t pay corporate income taxes; you only have to pay personal income taxes on your share of the revenue from the business.

A corporation limits your liability as well, but forming one comes with additional paperwork. The S-corporation requires all shareholders to be American citizens, but the C-corporation or regular corporation can have shareholders who are not U.S. citizens. Interestingly, a foreigner who can’t legally work in the United States can be a director or corporate officer. You could own a business even when you’re not allowed to be an employee of it. This means you can start a business in the USA and run it regardless of where you live. To learn the first steps of how to start a company in the USA visit

Choose the State Where You’ll Form the New Business

The LLC and corporation are business structures recognized by the federal government. You have your choice as to which state in the U.S. you can form the company in. Some states are more business friendly than others. Delaware, Nevada and Wyoming are notable for being international-friendly. States vary significantly in tax rates they’d apply. So, you might want to look at corporate taxes in different states to see where would be more favorable. However, if you are going to open a physical office, you probably want to form the company in the same state. You can open up a business in a different state, though additional registration steps may be necessary, so you should be aware of this as well.

Sketch Out the Details

Before you can form a business, you need to make a number of decisions. For example, the company must have a name. Furthermore, it needs to be a name that is not taken by an existing business in the state. So, it is very important that you do your research and have multiple names in mind in case yours is already copyrighted.

An employer identification number, or EIN, is not necessary but is advisable, since it simplifies filing taxes with the Internal Revenue Service. You will need to provide the names and addresses of people involved in the company such as directors, officers and board members.

You’ll need to choose a registered agent as well if you want to be able to form a business lawfully in the United States. The registered agent can be a person or another company. They must have a legal address in the state where you’re forming the business. In addition, they also must be available during business hours to handle questions and deal with concerns.

The registered agent must be able to accept and sign legal and state documents on behalf of your company. Agents may act as intermediaries, collecting and sending documents to you to review. However, they are far more than a mail forwarding service. For example, they must be able to accept legal documents such as a notice that you are being sued. So, they should be your representatives on the ground if any issues come up and should have some significant decision power.

File the Paperwork

The business doesn’t exist until you’ve filed the necessary paperwork and it has been accepted. It is at this point you can begin searching for a bank and opening up a business bank account. Know that you may need to secure a Certificate of Authentication or Apostille in your home country to open a bank account to be used by your business. This may be necessary even with banks that have offices in both the U.S. and your home country.

Open Your Office

Your business should arrange for a virtual or physical business address of some sort. If you want to receive business mail and client mail, you’ll need to have a physical address in the U.S. other than your registered office. You can also set up a “virtual” office with a virtual office service. These are most common in the state of Wyoming, Nevada and Delaware. They may provide you with a U.S. phone number or mail forwarding. This gives you a U.S. address to report to banks but it comes at a lower cost than renting commercial space.

Also, almost every business needs a website. This provides credibility. It is often required to request a merchant account so you can process American customers’ credit cards.

Maintain Your Business

Setting up the business is only the first step – you must also maintain it. An LLC or corporation must file an annual report. This can often be done online. Your registered agent should receive the notice that it is due and forward it to you. If you have a registered agent, you’ll need to pay their fees for their services. You are obligated to file paperwork or pay taxes due in your own country, and you’ll have to pay U.S. taxes if they are due.

The United States is often considered a land of opportunity. It is incredibly business-friendly, and it is possible to open a business there, though you may not ever set foot in it. However, make sure that you know your obligations, and know what to expect when doing business in the United States.

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