Doing business in any country is not an easy thing. You will face many challenges, which will require you to work harder to achieve the business goals. When starting a business, you will want it easy to operate, easy to manage, profitable, and without much friction. With harsh economic times globally, most entrepreneurs are looking for suitable places to start businesses. One of the cool places to start a venture is in the United States. Can a foreigner start a business in the US? This article will highlight everything you should know concerning starting a business in the US. Let’s dive straight in.
Can a foreign citizen establish a business in the US?
A foreigner can start a venture in the United States of America. There are many small businesses and multinationals in the US belonging to foreign citizens. However, the process is not that straightforward. You only need to follow a proper procedure and have your business running. As stated at Foreign USA, you have to get actionable advice to register and carry on your startup in this developing country. You have to know about the application cost, the minimum wage to your employers, registration process, among other details. One exception you need to understand is that you cannot form entities such as S-Corp without having a US resident shareholder.
Why do foreigners need to start a business in the US?
You might be wondering what will make a foreigner think of starting a business in the US and not their native country. There are many reasons, some related to cost, making individuals want to run their businesses in the US. Some of these reasons include.
- Fees
If you live in places that charge fewer fees to run a business, this might not be your reason. However, many countries charge high fees to run a business, making the whole process expensive. You have to pay government fees, notary fees, legal fees, annual renewal fees, and other costs, making you earn less or zero profits from your business. The US has affordable rates when it comes to the registration and running of a company.
- Banking
While the US is not that perfect, more banks offer friendly services to business people. They have low-cost accounts backed by a stable currency. Also, there are more digital banking products, which will enable your business to run smoothly and efficiently.
- Taxes
Taxes are the cause of headaches for many individuals who want to run a business. Many developing countries charge exorbitant taxes to business people, making their businesses not realize profits. Even though the US has taxes, it offers deductions and other tax benefits, making it easy for a business to thrive. However, before starting a business, it is essential to go through the tax guide to understand what you are signing for.
- Ease of operating
In some countries, starting a business will take a lot of time, cost, and paperwork. Also, most paperwork might be in a foreign language, which might not be easy to interpret. In the US, the whole application is straightforward and fast. You will take less time registering your business.
- Payment Processing
The US is a developed country. Building a product and developing it is not that complicated. Here, you will find cheaper and efficient payment processing methods which will make your business run efficiently.
- Reputation
Your business will be reputable if it operates from the United States than any other country. You will enjoy more services and more accreditation, which will make your business easily known worldwide.
LLC Vs. Corporation: Which business is best for a foreigner?
There are different ways you can register your business in the US. Some of these ways include the C-Corp, S-Corp, Limited Liability Companies, Partnerships, and Sole Proprietorship. Most businesses run by foreigners are the LLC and the C-Corp. Why these businesses? It’s because they have fewer restrictions on the number of foreigners to run the business. Sole proprietorships and partnerships aren’t that common because they have some restrictions on foreigners.
If you are a small business person, you can pick the LLC. It is the perfect choice for any entrepreneur who wants to establish their business in the United States. However, you can choose other options depending on the business you want to run.
Which state is the best to register an online business?
While you can run your online business from any state in the US, there are those states which offer more benefits to online businesses. Some of these states include Wyoming and Delaware states. Why these states? It’s because they are cheap to operate a business, and they have no income or sales tax to online businesses. A state like Wyoming offers less paperwork with greater privacy.
Process of starting a business in the US as a foreigner
The whole process of starting a business in the United States can seem overwhelming, but it isn’t. The entire process can take approximately a month. You only need to follow the right processes, and you will have your business running. Which are these processes? Check on the steps below.
- Step 1: Register your LLC. You need to work with a registered agent to complete the process fast.
- Step 2: Get a physical Business Address for your business
- Step 3: Apply for an EIN (Employer Identification Number). You need to do this at the Internal Revenue Service (IRS) and help you file the Social Security or tax file number for your business.
- Step 4: Get a Bank account for your business.
- Step 5: Get a payment processor.
- Step 6: Have a bookkeeping system.
- Step 7: Run your business.
When you follow the above advice and steps promptly, you will start and run your business efficiently in the US. You only need to study the rules and get advice on running your business as a foreigner. It will be best to contact experts or individuals who already have established businesses for more information. Also, you have to consider getting the right products to earn you considerable profits.