If you’re planning to set up a business in the United States, we’ve explained few crucial points to pave your way with ease. Setting up a business in the United States of America does not require for you to be a US resident, non-residents can as easily set up business as the residents. There are few things that you should consider before setting up business; we have explained them below for your convenience.
Selecting Business Structure:
The first thing to do is selecting the right type of business structure that suits best for your business interests and needs. A business structure influences your taxes, liabilities of assets, day-to-day operations and everything in between. The most common business type in the US is LLC or Limited Liability Company. You can learn more about forming an LLC in this article. To put it simply, an LLC is a simpler business structure for taxation and management purposes. It also protects your personal assets from business debts and lawsuits. If you’re planning to have multiple investors and shareholders in your business then the recommended type is the C Corporate structure. If you’re a US resident you should definitely select S Corporation because it avoids the double taxation that the C Corporation faces.
Deciding location of your business:
You should decide beforehand in which State you’re planning to settle your business. The best and also the recommended location is your home state where you are physically located. But if you’re a non-US resident then you should consider Wyoming. It is the most business-friendly state for non-US residents with perks like cheaper taxes, foreigner-friendly laws and more privacy to your business.
Get an Agent:
It is beneficial for your business to have a Registered Agent with a physical address (note that P.O box is not acceptable as a Registered Agent’s address) during business hours to receive important documents on behalf of your business. A Registered Agent is a good service that ensures that you don’t miss any important documents like state tax renewal notices and lawsuits.
Apply for EIN/ITIN:
All businesses in the USA need an Employer Identification Number (EIN) also known as Tax ID Number. Now you must be wondering how to get a Tax ID number, right? You can apply for your EIN on IRS’s Website if you’re a US citizen and have a Social Security Number. If you’re a non-US resident then you’ll need to apply for an Individual Taxpayer Identity Number (ITIN) and you can learn more about it on IRS’s webpage. An EIN is required for you to open a business bank account in the US.
Open a US business bank account:
After receiving your Employer Identification Number you’ll be able to open a business bank account. It is highly in recommendation that you keep separate business and personal bank accounts for various reasons. A business account offers professionalism, protection (in form of limited personal liability) and purchasing power (with credit card accounts) with many other perks. You should also open a merchant account to accept various forms of payments that this modern era offers; such as Credit cards, Debit Cards, Gift and Loyalty Cards, etc.
It is always recommended to take precautionary measures and get business insurance. Business insurance protects you from unforeseen costs of running a business, accidents, natural disasters, and lawsuits. These problems, if not faced with proper preventative measures and solemnity can run you out of business. The federal government requires every business with employees to have workers’ compensation, unemployment, and disability insurance. While additional laws required vary from state to state.