The USA is a country built on ambitious immigrants who started businesses to sustain themselves and create a new life. In other words, it’s the foundation of the American dream.
However, there are a few nuances to starting a business in the U.S. as a foreigner. Here are some of the key considerations and steps to take to start your enterprise.
Can Foreign Nationals Start a Business in the U.S.?
Many people ask whether a foreign national can even start a business in the U.S. before they’re a permanent resident. The answer is yes! In fact, you don’t even have to live in America to start a business there.
Whether your goal is to set up a small store or a large enterprise, the process for foreign nationals is mostly the same as it is for anyone else. You’ll need to choose a location, register a business, and ensure you have the right documentation to work.
Choosing Where to Register
Different states have different requirements for registering a business and numerous pros and cons of operating in that location. If you live in the U.S. and plan on starting a business, you’ll likely start it in the state you call home. However, if you’re starting a business from outside of America and choosing a headquarters, it’s worth considering the nuances of the different states.
Some states will be more affordable than others or have a higher demand for the product or service you’re offering. Tax regulations also vary from state to state and should be an important consideration when choosing where to register.
Choosing Your Business Structure
Another integral consideration is the type of business structure you choose for your operation. Some of the most common structures include:
- Limited Liability Corporation (LLC)
- C Corporation (C-Corp)
- S Corporation (S-Corp)
An LLC is ideal for freelancers and small business owners who don’t plan to expand to other states and bring on a huge team of employees. C-corps are better for business owners who plan on expanding, offering stocks, and creating a big business over time.
S-corps are similar to C-corps with more involvement. However, this business structure is restricted to permanent residents and full citizens.
Registering Your Business
Once you’ve outlined the basics, it’s time to register your business. The process and paperwork vary depending on the type of business structure you select and the state from which you operate. Generally speaking, you’ll have to choose a name, a registered agent to process your paperwork, and pay various fees. You will also need an employer identification number (EIN) to hire employees, pay your taxes, etc.
There are many resources available to help dig into this process. The US Small Business Administration is a fantastic resource for all aspiring business owners. Additionally, there are other programs to support minority entrepreneurs. For example, a Latino small business owner can seek assistance from the National Hispanic Business Group (NHBG) or the Latina Entrepreneur Academy (LEA).
Take some time to search the resources available when navigating this process.
While you don’t require a visa to start a business in the U.S., you do need one to work there. The type of visa you select depends on various factors, including if your family will also be working with you, if you plan on becoming a full citizen, etc.
You can compare visa options at the U.S. Citizen and Immigration Service’s Entrepreneur Visa Guide.
As mentioned before, you’ll need an EIN to pay taxes to the IRS. Each state will have different requirements for filing taxes for your business. Take the time to understand these unique requirements using the resources listed above.
While there are some issues to work around as a foreigner, you can start a successful business in the U.S. Take your time to research and understand what’s required before getting started.