Frequently Asked Questions of Non U.S. Residents Wanting to Incorporate Their Business in the U.S.A.
Non U.S. Citizens wanting to incorporate their business or setup a branch in our country face different chalenges than local entrepreneurs. The following is a compilation of the most frequently asked question about starting and running a company in the United States of America.
- Can I own / participate in the ownership of a corporation if I am not a US citizen?
- Which is the most convenient entity type for a foreign person?
- Can I work in the US if I own a Corporation or LLC?
- How long is the incorporation process?
- Can Active Filings help me open a checking account?
- Can I use the Registered Agent address as my company address?
- Do I need an US address to incorporate a business in the US?
- Can my foreign company be the owner of our US LLC or Corporation?
- We want to create a branch of our company. Is that possible?
- What documents do I need to submit to incorporate my business in the US?
- What do I have to do on an Annual basis?
- Can you take care of the publication of the notice about the company registration when required?
- Will you provide a copy of the registration documents prior to file them?
- How do I get the company Tax ID (EIN)?
- Do you file Initial Reports where required?
- Will I receive “originals” of my documents?
- Can you prepare annual reports, tax returns and hand over all official procedures with IRS and the authorities of the state as my official agents?
- If we don’t have a physical office in the USA, do we need a business license?
- What is a Certificate of Incumbency?
Generally, there are no restrictions on foreign ownership of a company formed in the United States. The procedure for a foreign citizen to form a company in the United States is the same as for a US resident. It is not necessary to be a US citizen or to have a green card to own a corporation or limited liability company formed in the United States.
To receive pass-through profit distributions, a foreign citizen may form a limited liability company. In contrast, all profit distributions (called dividends) made by a C corporation are subject to double taxation. (Under US tax law, a nonresident alien may own shares in a C corporation, but may not own any shares in an S corporation.) For this reason, many foreign citizens form a limited liability company (LLC) instead of a C corporation.
A foreign citizen may be a corporate officer and/or director, but may not work in the United States or receive a salary or compensation for services provided in the United States unless the foreign citizen has a work permit (either a green card or a special visa) issued by the United States. Some work permits allow a foreign citizen to work only for a sponsoring employer. Such work permits generally do not enable a foreign citizen to also work for a new, unrelated company formed by the foreign citizen. The foreign citizen would need to obtain a separate work permit to work for the new company. You can own a business but unless you have a work visa, you are not allowed to work for your company in the US (You can work for your company in your country).
Processing times for incorporating a company vary amongst the different states and change constantly depending on the workload at the state office. Please ask one of our representatives for our most current approximation of the processing time for Articles of Incorporation within your state of incorporation. Foreign persons will have to wait between 10 and 20 days in order for us to obtain their EIN. The procedure to obtain a Tax ID, when directors or owners are not US Citizens (non Social Security Number or ITIN applicants) has to be filed with an special IRS unit and that’s the reason of the extra delay. This process has to be started once the documents has been approved by the state.
No, Active Filings cannot assist you with the opening of a checking accounts or other banking related issues. In order to open a checking account you will be required to walk in to the bank of your choice and provide proof of ID (your drivers license or passport), a copy of your articles of incorporation or organization and the company’s tax ID (EIN).
If you don’t live in the US, but you want to start a business here, you will have to plan a trip after we have incorporated your business and obtained the EIN. Be careful: nobody can do this for you and if you find a company offering this service, be aware that you could be victim of fraud.
No, you cannot use the RA address as your legal address or even as the mailing address of the company. The RA address (and service) is just to receive official documents, generally related to taxes and law suits. The legal address of your company has to be the real one (i.e. your home or office in your country).
No you don’t. We provide Registered Agent services that is the only state requirement related to physical address. Our Registered Agents service allow you to incorporate or form a LLC in the US. However, in order to open a bank account, your bank may ask you at least, a mailing address here (not necessarily in the state of formation). In this case we recommend you to look for a “mail forwarding” service provider. Active Filings does not provide this service.
If you form a LLC, yes. Instead of appointing an individual as “managing member” you can appoint your own foreign company. If you chose to form a Corporation, at the time of registration we only appoint “Directors” and they have to be individuals. Please note that Directors does not own a corporation. A corporation is owned by its shareholders, and from this point of view, your foreign company can own 100% of any US corporation.
We don’t have an entity type called “Branch”. In order to do so, you need to incorporate a business here (or form a LLC) and then establish the relationship through internal resolutions and ownership. No filing is involved with this action.
None. You just need to complete our online form. We will take care of the rest. You will have to sign and return a form that will allow us to obtain a Tax ID for your US business. In this case, we will prepare and provide you the form and returning instructions (mail, pdf or fax).
Your corporation will have to file an annual tax return (IRS Form 1120 or 1120S). Your State of Incorporation will also probably request that you renew your incorporation via a form which updates the address of the corporation, its officers and directors, and its registered agent for service of process.
Annual tax returns are also filed by sole proprietorships (Schedule C to IRS Form 1040), limited liability companies (IRS Form 1065) and general partnerships (IRS Form 1065).
Finally, Active Filings suggests that you consult your accountant for any additional information required for filling out corporate tax returns, quarterly tax payments, employment payroll records, etc.
Active Filings supports publishing services in Georgia, Arizona, Nebraska and Pennsylvania. We do not provide publishing services in New York but we can recommend an Advertising Agency with experience in this particular state. Prices vary state by state and they can range from $ 100.00 to $500.00. The above mentioned states are the only jurisdictions that impose publishing requirements to new companies.
No, we do not provide this service. Our filing fulfil the minimum state requirements (with exception of nonprofit corporations where we prepare articles in compliance with the 501(c)(3) regulation).
Once we submit the SS4 (EIN application form) to the IRS, they may fax the EIN to us or may not. They are not required to send us this information and regretfully, it relies on the IRS employee that has processed the application. Anyway, the IRS will always send a letter directly to the customers at the address stated at the SS4 form.
Some states will require that you file an initial report (Statement of Information in California or Initial List of Officers in Nevada), but this service is not part of the incorporation services we provide. Initial and annual reports are company’s duties. If the state includes the initial report as part of the documents returned to us, we will do the same.
Each state has its own way to return proof of filing. Some states will return the information by fax, others by email and some of them by mail. Documents returned as proof of filing can include a nice certificate or just an electronic stamp with the company number and filing date. They can return an stamped copy of the original (they always keep the original) and payment receipt. Our International Plan includes a certified copy of the articles of incorporation. Apostille certification of this certified copy is also available as an optional service to our International Plan.
Can you prepare annual reports, tax returns and hand over all official procedures with IRS and the authorities of the state as my official agents?
No, as Registered Agents of your company our service consists in providing our name and physical address to receive service of process and other important official documents on behalf of your company and forward them immediatelly to your corporate address. We do not prepare annual reports, tax returns. However, annual reports are easy to file and in many cases, they can be filed online at the Secretary of State of your state. We can help you with certificates of status, apostille certification, articles of amendments, reinstatements and dissolutions.
For tax issues, we recommend you to contact a CPA (accountant).
Some business licenses are related to the county and city where your office is located. In this case, since you will not have a local (US) office, you may not be required to hold a license. However, there are other kind of licenses, called specific licenses, that are related to the activity that you perform. These kind of permits are very difficult to obtain and may impose requirements hard to reach when you are not a permanent resident of the USA.
A Certificate of Incumbency is a corporate document confirming the authorities of the officers, directors or members (in case of an LLC) . A Certificate of Incumbency is also known as “Incumbency Certificate”, “Certificate of Officers”, “Officer Certificate”, or “Register of Directors”. This document is usually required by receiving organizations in foreign countries to make sure that the person who signed the documents on behalf of the company is actually authorized to do so.