A guide to starting a business in America as a non-resident

If you're considering starting a new business in the US, then you'll have plenty of questions on how to get started.

The good news is that there are clear options set up for starting a business in USA as a foreigner, and there are resources available to help you along the way. This guide will help break down the complexities of starting your US business.

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What kinds of corporate entities can I open in the US as a non-resident?

At the moment, there are two types of corporate entities non-citizens or non-residents can open in the US:

• Limited Liability Company (LLC)
• Corporation (C-Corp)

S-Corporations are often recommended to foreigners. Though quite attractive, it’s important to note that they are exclusive to citizens and permanent residents.

There can be some distinct advantages to incorporating as an LLC. The most obvious of these is limited liability. This means members are protected from personal liability for business decisions or actions, and personal assets are safe if the company incurs debt or is sued.

That being said, many new businesses choose the C-Corp business structure. The advantages of forming as such include the ability to expand by offering unlimited stock. This feature is often attractive to investors.

Will I need a visa to open a US business?

Managing an LLC from outside the US is allowed, but may be not be permitted within the US without a valid work visa.

You don’t need a visa to open and manage an LLC from outside the US. If you plan to manage the LLC from within the US, however, you may need a valid work visa.¹

You will generally need a work visa to be an officer and perform your duties within the US. Working for your corporation or LLC within the US without a valid work visa is not allowed.

Having a US business also doesn’t give you the right to live inside of the US, so many prefer to get one.

The good news is that there are a few visa options to choose from.

Visa options for opening a company in the US for non-residents

The most popular one for entrepreneurs (and the closest thing the US offers to a “start-up visa”) is the E-2 visa. There are three main qualifications for obtaining one:

1. You must be a citizen of a country that is part of a Treaty of Friendship, Commerce, or Navigation with the US You can find a full list of eligible treaty countries at the Department Of State’s Treaty Countries website.

2. You must have already invested or be planning to invest a significant amount of capital in a US business. At the moment, there is no set amount of money you’re required to invest, but it should be enough to buy or establish a new enterprise, and to operate and develop it. The capital must be subject to partial or total loss if the investment fails. You must also show that the funds have not been obtained, directly or indirectly, from criminal activity.

3. You must be able to prove that you have a controlling share (50% or more) of your business.

4. You must be seeking to enter the United States solely to develop and direct the investment enterprise.

The E-2 doesn’t create a clear path to obtaining your Green Card. Qualified treaty investors and employees will be allowed a maximum initial stay of two years. You may request for extension of stay in increments of up to two years. There is no limit to the number of extensions an E-2 nonimmigrant may be granted. However, you must maintain an intention to depart the United States when the status expires or is terminated.

E-2 Visa alternatives

If the E-2 doesn’t sound right for you, there are plenty of other visas to explore. You can find a full list of them on the US Citizen and Immigration Service’s Entrepreneur Visa Guide, but some of the most common include:

• The F-1 OPT (Optional Practical Training) Visa, which applies to students in the US with an active F-1 Visa who are opening a business that is directly associated with their university major.
• The H-1B Specialty Occupation Visa, which requires you to work for in a position that typically requires a related bachelor’s or more advanced degree in a specialized field.
• The O-1A Extraordinary Ability and Achievement Visa, which is granted to individuals who can prove that they have “extraordinary ability” in the sciences, arts, education, business, or athletics. This can often mean you would have need to have sustained national or international recognition in your field.

If you’re able to invest $1,050,000 (or $800,000 in a targeted employment area or infrastructure project) in a new commercial enterprise that will benefit the U.S. economy and create at least 10 full-time positions for qualifying employees, you may also be eligible for a Green Card by Investment, which would make you a permanent resident of the United States.

What state should I register my business in?

The best state to register in is the one in which you will be conducting business. However, if you’re an online company or do business across a range of regions, you may want to consider registering in a state with lower tax burdens.

Two states that are notoriously inexpensive for entrepreneurs are Nevada and Delaware. Delaware is particularly popular, thanks to corporate law that provides significant protections to shareholders and directors.

Incorporating in Delaware also doesn’t require a physical address or bank account. In fact, the state is so welcoming to foreign entrepreneurs that Delaware’s corporate law website is available in quite a few different languages.

What is the process for registering my company as a foreigner?

The process for company registration in US for foreign businesses varies slightly from state to state, and is somewhat dependent on whether you’re forming an LLC or a C-Corp. However, Delaware’s process is a good model for the basic steps and requirements:

1. You will need to choose a unique name that has not been previously registered in the United States. The US Patent and Trademark Office has a trademark database you can search.

2. You or a named company agent must be available to receive the company’s legal documents.

3. Once your name and agent are established, you will fill out a certificate of incorporation. This document outlines the company’s name, the address of you or your company’s agent, the value of authorized shares, and the name and legal address of the incorporator. The fee for filing the certificate of incorporation starts at $89 and increases based on the amount of stock issued or raised capital.

4. Next, you’ll file an incorporation report and pay your franchise tax.

5. Finally, you must obtain an employer identification number, or EIN. The EIN will allow you to hire employees, open a bank account, pay taxes, and obtain whatever licenses you need. You can apply for an EIN online for free with the IRS. However, you or the company’s principal officer must have already obtained a Taxpayer Identification Number. If neither of you have, you can still get an EIN- but you’ll need to apply by mail or fax.

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If you’re starting a business in the USA as a foreigner, you can save time an money with Wise Business.

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. The Wise Business account is designed with international business in mind, and makes it easy to send, hold, and manage business funds in 40+ currencies. You can also get major currency account details for a one-off fee to receive overseas payments like a local.

Open a Wise Business account today

Non-US citizens can open a US Wise Business account with a registered US business and US operating address. Alternatively, in countries where Wise Business is available, you can open an account and get US account details to receive payments like a local.

You can open a Wise Business account online, without having to wait in line or book appointments.

Not only does Wise use the mid-market rates when exchanging currencies, but you gain access to local account details. This means that you can send and receive payments like a local business - even as a non US resident.

Read the guide on how to open a Wise Business account

Where else can I find help on how to start a business in USA for foreigners?

The US Small Business Administration is a great resource for more comprehensive information about how to start a business in the US for non-citizens and non-residents.

You’ll also want to give yourself a crash course on corporate law in the state in which you plan to register. While you may have to find these individually, Cornell University has a table of various state laws regarding corporations.

If you’re still looking for a deeper dive, check out the United State Government’s Business USA; it’s a central, governmental platform for businesses to access information and services designed to help them get started and grow.

The Wise Blog also covers a wide range of topics on doing business internationally, that you may find useful.

Read more:
Can a foreigner open a bank account in the US? LLC for non-US residents: How to guide Can a Non US Citizen Own a C Corporation?

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Sources:

1. LLC visa requirements

Sources checked September 2023.