It’s no secret that to be come an LLC or corporation based in the United States, your business needs to meet a number of strict guidelines. However, these guidelines are very different for US residents than they are for non US residents. Here’s part one of our FAQ surrounding the details of incorporating a business in the US as a non-resident.
What is the most convenient business entity for non-residents?
Experts typically say that the most effective way to incorporate a business into the US is by forming an LLC. On the other hand, S corporations have one level of taxation, and all dividends a C corporation makes are subjected to double-taxation. That’s why most foreign citizens start an LLC as opposed to a corporation.
How long is the process of incorporating a business into the US?
There isn’t a set amount of time that’s expected for your business to become an LLC-based one. This is because each state has different rules and procedures that change often. Fortunately, you can check your state’s expected processing time to give you an idea of how long the process will take. Keep in mind, also, that a special IRS unit is in charge of processing tax ID registrations when business owners are non-residents, so the process may take longer than usual.
Are non-residents legally allowed to use the address of their Registered Agent as the company address?
No — unfortunately, non-residents cannot use the Registered Agent address as their company address. This is because the Registered Agent’s address is used to send and receive official documents that are generally related to taxes and lawsuits. Your company address needs to be, by law, the address where your company officially operates at, i.e., the home or office in your country where your business operates. There’s also the option of coordinating a mail forwarding service that authorizes you to use their address as that of your company’s.
Ultimately, being aware of these common questions can help you make the most informed decisions for your business’ needs. Keep an eye out for the next post, where we’ll answer even more frequently asked questions regarding the process of how to become an LLC and incorporate your business into the US as a non-resident, and for more information about how to form a corporation, contact MyUSACorporation.
In the last post, we answered some of the most common questions about the process of incorporating your business in the US as a non-resident. However, the process is very complex, and having a well-rounded understanding is crucial to maximize efficiency and success. Here are some more answers to common questions about incorporating a US business as a non-resident.
Can a foreign company become an LLC or corporation in the US’ owner?
If you choose to form an LLC, then yes. LLC ownership can be expressed in two ways: by percentage or membership units, which are similar to shares of stock in a corporation. And one of the many LLC advantages is that you can appoint your own company as an owner. If you’re wondering how to form a corporation, however, keep in mind that you’ll have to appoint a ‘director’ — an individual, not a business — to run your corporation. When it comes down to it, S corporations can have no more than 100 share holders, and each one must be a resident of the United States.
What annual documents do business owners need to file?
There isn’t a ton of paperwork involved with setting up LLCs and corporations in the US as a non-resident, but it does take some preparation. You’ll have to file an annual tax return, and if you’re forming a corporation, you may need to renew your State of Incorporation status using a form that updates the company’s address, officers, and Registered Agent. Experts recommend consulting with an accountant to look over the specific details of your LLC or corporation’s legal and financial documentation.
If a business doesn’t have a physical office space in the US, do they still need a business license?
This is highly dependent on the type of business you run. Some licenses relate to the county and city of the office, while others are more specialized and may not require a license at all. Talk to a professional for the specifics of your business licensing needs.
Ultimately, knowing the answers to these common questions is the best way to make the most informed decisions about your business’ needs. For more information about corporation and LLC advantages, contact MyUSACorporation.
When it comes to forming an LLC or corporation, understanding the steps of registering your business is a critical component of the overall process. However, there are many misconceptions people believe when registering their businesses that cause them to make mistakes and hurt their business. Here are just a few of the most common myths about registering your business to help you navigate through the process as efficiently as possible.
Once your business is registered, nobody else can use your business name.
Many people seem to take this myth as fact, and even though it may seem logical, it’s not quite that simple in reality. The truth is that even though one of the benefits of an LLC includes the right to claim your business name, it only applies to businesses that are registered in the same state. It doesn’t protect the same name from being used nationwide — you’d have to form your LLC in all 50 states to achieve that kind of individuality.
It’s always wiser financially to start your LLC in a state without income tax.
Of course, nobody enjoys paying taxes, but the fact is, this isn’t always a better decision. States like Wyoming, Texas, South Dakota, and Nevada don’t have income taxes, but again, it’s not as simple as it sounds. The tax laws of your business come from the state that it’s actually operated in.
“If you live in California, run your business from California, and make money in California, you most likely will be subject to paying California state taxes – even if you registered the business in Nevada,” explains SecretEntourage.
Keep in mind that when considering an LLC vs corporation, this rule still applies.
Once you’ve completed the process of registering your business, you’re done.
In 2010, there were 27.9 million small businesses in the United States, and many of them would probably like to believe this is true. However, in addition to registering your business, there are further compliance requirements that must be met. These typically include filing an annual report and paying a small annual fee. There are different compliance requirements depending on whether you’re forming an LLC vs corporation, so make sure you’re aware and can keep up with the demands.
Ultimately, knowing the truth behind these myths can help you navigate through the business registration process as efficiently as possible. Don’t let misconceptions get the best of your next venture.