Starting a business in the U.S.A. is a dream for many. Find out how to do it as a non-citizen.
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If you are looking to form a business in a foreign country, you may be surprised to learn that the USA has been known as one of the most foreign-friendly countries to start a business.
On top of this, the United States of America has a consistently strong economy and is the current leader for global business and investments. This can be promising for your entrepreneurial endeavors.
How can you start a business in the USA as a non-citizen foreigner? Starting a business in the USA has no citizen or living restrictions. You can use a registered agent service to register your business with an address in the state you are filing in. Starting, buying, or owning a business in the USA does not automatically change your citizenship status, but a green card is not required to begin.
While starting or purchasing a business within the USA can be a relatively easy logistical process, it does come with plenty of challenges. There will be nuances as to types of businesses, as well as laws for working and living, that you will have to navigate. Continue reading to learn more about the types of USA-based businesses you can own as a non-citizen foreigner (both residential or living abroad) and the legal guidelines you will have to follow along the way.
ZenBusiness will file your formation paperwork for $0 + state fee. Plus, we offer additional services to help you start a business in America.
Learn more in our guide: How to Start Your Small Business Legally – Important Legal Requirements
Non-US citizens (whether living abroad or those who are non-citizens residing in the USA) can start a business of any kind in the USA; sole proprietorships, partnerships, limited liability companies (LLCs), or C corporations are all popular choices. However, working for the business and gaining wages will require documentation.
Since you will be able to start any kind of business that you want (assuming you meet the business standards to begin), you will likely want to see the profits from your work. To do this, you will need to gain permission to work and reside in the country through a conditional visa or green card.
That said, the legal requirements for working and residing in the United States vary based on your unique situation. You’ll need to research the type of documentation that you’ll be asked to provide based on how long you plan to stay in the country and any plans for residency or citizenship applications.
If you are living abroad but would like to start a business in the United States, this is possible, too. Since there are no citizenship requirements for starting a business in the country, and you will not be attempting to live or work in the country, then you need to verify the legality of the wages that you will be receiving and the taxation requirements in the U.S. as well as your country of residence.
Choosing the right business entity is a crucial step in starting a business in the US as a foreigner. The two most common business entities for foreign business owners are the limited liability company (LLC) and the C corporation. Both entities offer limited liability protection, but they have different tax implications and requirements.
An LLC is a popular choice for foreign entrepreneurs because it offers flexibility and avoids double taxation. This means that the business itself is not taxed; instead, profits and losses are passed through to the owners’ personal tax returns. This structure can be particularly advantageous for foreign business owners looking to minimize their tax burden. Additionally, even foreign-owned LLCs are relatively easy to manage and provide a straightforward way to protect personal assets from business liabilities.
On the other hand, a C corporation offers more flexibility and security to external investors, making it easier to raise venture capital. However, C corporations are subject to double taxation, where the company’s profits are taxed at both the corporate level and again on the shareholders’ personal tax returns when dividends are distributed. Despite this, the well-established nature of C corporations can make them more attractive to investors and partners, which can be a significant advantage for businesses looking to scale quickly.
Ultimately, the choice between an LLC and a C corporation will depend on your specific business goals, the level of investment you seek, and your tax strategy. Consulting with a legal or financial advisor can help you make the best decision for your new business.
Registering a business in the US as a foreigner involves several key steps. First, you need to choose a unique name for your business that has not been previously registered in the United States. This ensures that your business name is distinct and legally protected.
Next, you will need to fill out paperwork, such as the Articles of Incorporation or Articles of Organization, and file it with the state where you plan to conduct business. This step officially registers your business entity and provides it with legal recognition.
It’s also important to consider the state in which you register your business. Some states are known for being particularly business-friendly, offering lower taxes, fewer regulations, or business-friendly court systems. However, it’s essential to consult with a lawyer or accountant to determine the best state for your business based on your specific needs and circumstances.
Obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS) is another crucial step. The EIN is a unique number assigned to your business for tax purposes, similar to a social security number for individuals. You can apply for an EIN online or by mail, and it is required for various business activities, including opening a business bank account and filing taxes.
There are many reasons that you might want to start a business in the USA. Its economy is consistently strong. Its world market integration is vast. It provides an entryway to financial opportunities like investors and venture capital. Plus, you can make a plausible case for residency. But your residential status might cause you to question your business venture.
Technically, there are no requirements for living in the United States to legally register your business entity in the country. However, employment (receiving wages) from your business will require additional legal documentation. You will be required to pay U.S. taxes annually on your U.S.-based business.
The conditions for starting and owning a business in the U.S. vary from person to person and from business to business as specific situations render different documentation needs. It’s highly recommended to work with a U.S.-based attorney to help ensure you’ll taking all the appropriate legal precautions for your business and your personal residency. That way, you’ll be able to fill out all of the correct paperwork and avoid time-consuming missteps.
ZenBusiness will file your formation paperwork for $0 + state fee. Plus, we offer additional services to help anyone start a business in America.
If you are planning to live and work in the US, then you are likely looking at all of the complicated regulations that will make this possible. It can be frustrating and confusing to see all of the paperwork that is required, but you can make this work.
To start a business in the USA requires no legal residency or citizenship. However, if you plan to live and work in the United States (to receive wages from your business while living in the U.S.) you will require a Green Card or visa. The particular visa you need depends on your situation.
The most important factors to consider are whether you (and your family, if applicable) want to reside in the U.S. permanently or temporarily. This decision will greatly affect your visa options.
A popular route that many non-citizens end up taking when starting a business in the U.S. is to apply for an E-2 Visa. The E-2 Visa grants you residency permissions to live and work in the U.S. while your business exists and generates profit. Your spouse and children can also get this visa. Extending an E-2 Visa has no limits; it simply requires reapplication and approval.
One caveat, though: the E-2 Visa is only available to citizens of countries that maintain a qualifying international agreement or commerce and navigation treaty with the U.S. Sometimes legislation will also qualify your country, so be sure to check.
When granted, an E-2 Visa assumes you’ll invest a lot of capital into the business and that you’ll generate enough profit to support yourself and your family from your business alone. That means your residency is dependent on your business’s success; if your business goes under, so does your visa. Understandably, some small business owners aren’t comfortable with that.
The E-2 Visa is just one example that many business owners can and do choose. But it’s not the only option. Applying for a green card or another visa route might be the best option for you.
The L1-A Visa is another option that is particularly beneficial for those who have a pre-existing business and plan to move themself (and their families) or another executive in the business to the United States permanently. This requires previous business experience, so you’ll need to have a record of your current business’s success. You’ll also need to verify the interest in moving someone (on behalf of the business) to the U.S. to begin trading in the country.
In the end, green cards can be hard to come by. The application process can take months or even years. If you go this route, it’s essential to build a strong case for residency. You’ll need to prove that you’re financially invested in the country. You’ll also need to be prepared to stay in the country for a certain period; leaving during the application period could jeopardize your filing status.
There are lots of options to legally make this happen for you, your business, and your family. But it will probably take lots of research and patience to navigate the process and get your business up and running effectively in the U.S.
If you are a non-citizen planning to start a business in the USA while you live and work there but you don’t currently have citizenship status, then there are several legal precautions that you will need to take. While anyone (citizen or not) can start a business in the U.S., working in and living in the U.S. requires additional documentation.
Before you start a business in the USA as a non-citizen residing in the country, be sure to do the following:
While this is not an exhaustive list, this can give you a good place to start. Know that while this can be an extremely intimidating process for those who are unfamiliar with the ins and outs, it can be done successfully. You can reach your goals.
If you are a foreigner (non-resident) planning to start a business in the USA but you don’t plan on residing there, you’ll need to plan for the legal ramifications of that choice. You don’t have to be a citizen or reside in the U.S. to start a business there but you do need to address the legal measures for receiving wages and paying the appropriate taxes and fees abroad.
Before you start a business in the USA as a foreigner (non-resident) who lives abroad, be sure to do the following:
It can be tricky to navigate starting and running a business while living abroad, but with the right guidance and vigilance, you can make it work.
Even after you’ve gotten your business registered and sorted your green card status, there’s still plenty of work to be done. Let’s cover some of the essential tasks you should tackle to get your business running on the right footing.
Setting up a business bank account is an essential step in starting a business in the US as a foreigner. Having a dedicated business bank account is crucial for managing your business finances, separating personal and business expenses, and establishing credibility with customers and suppliers.
To open a business bank account, you’ll probably need to provide several documents, including your official corporation documents, an EIN, and a passport; the exact requirements vary from one bank to another These documents verify your business’s legal status and your identity as the business owner.
You have the option to open a business bank account with a US bank or a global bank that has a presence in the US. Some banks may require you to visit in person to open an account, but this requirement can sometimes be waived if the bank has an office in your country of residence.
Alternatively, you can consider using a virtual bank account service, which allows you to send and receive US business payments like a local. This can be a convenient option if you are unable to visit the US in person or if you prefer to manage your finances online.
As a foreign business owner, complying with US tax laws and regulations is essential. You will need to pay taxes on the income earned in the US, and you may also be required to pay an annual fee to the state where your business is incorporated.
It’s crucial to consult with a lawyer or accountant to determine the best tax strategy for your business. They can help you navigate the complexities of US tax laws and ensure that you are meeting all your tax obligations. You may also need to obtain a Taxpayer Identification Number (TIN) from the IRS, which is required for tax purposes.
Understanding your tax responsibilities and staying compliant with US tax laws will help you avoid penalties and ensure the long-term success of your business.
Whether you’re looking to stay abroad while running your U.S.-based business or you’re looking to relocate, this journey is as exciting as it is challenging. Having people you can count on for advice and encouragement can be a huge asset. Maybe that’s your family, friends, or even another small business owner you meet along the way.
Online business communities and groups can be helpful resources, too. You may find yourself chatting with (and getting advice from hundreds of people who’ve started their own business in the USA successfully before. By learning from other people’s experiences, you’ll know to watch for successes and pitfalls in navigating the legal process, helping your U.S.-based business to succeed long-term.
✔ Check Out These 30 Best Business Ideas for the USA
This isn’t an exhaustive guide to starting a business in the U.S. as a foreigner (non-resident) while not living there, or attempting to live there. But this can give you a place to start. Navigating the legal process in this arena can be difficult and intimidating; it’s no easy feat.
But others have successfully started their own business in the USA, and so can you. There’s no guarantee of success and you will probably face some challenges, but with drive and a well-designed plan, you can make this dream of yours come true, too.
Are you thinking about starting a small business in Canada?
If so, you’re not alone. In fact, according to the Canadian Federation of Independent Business (CFIB), more than half of all Canadians are either currently self-employed or want to be. But before you start your own business, it’s important to know what it takes and how much it costs.
Disclaimer: The content on this page is for information purposes only and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
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