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US Corporation for Canadians

Asked by: Elena Borodina - 28 May, 2012
Dear sirs,

We are a Canadian corporation exporting products from USA and other countries to international markets. For the US export regulation it would be beneficial for us to have a USA address and Tax ID. Do we need to register a branch in USA or simply apply for Tax ID?

Most of our business is done outside Canada - purchasing from USA and other countries and selling to export markets.

All transactions are in USD, so it might actually be good to have a US Bank account too for faster processing and lower bank fees.

Our physical presence is Canada. I have to travel to USA and other countries to inspect the product or meet the suppliers.

Our accounting and tax reporting costs are already significant in Canada, and I would like to avoid doubling that expense by having 2 financial reports and 2 tax reports separate for USA and for Canada.

What would you recommend in our situation?

best regards,

Elena Borodina

604-628-9402
Answered by: Robert Kowalski - 29 May, 2012
Dear Elena,

You could obtain an EIN for your Canadian company, and use it to open a bank account in the US. However, you would need to present the bank with your company formation documents, certified in US embassy in Canada, as well as a letter from company CPA or attorney stating that the company does not do business in the state where you plan to open the bank account (as well as a few other documents such as photo ID and proof of address).

Alternatively you could form a US entity and use it as a proxy of your Canadian company for US business.

Either way you would be required to file a tax return with the IRS on your US income (even if its zero).

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