Citizens, residents, and non-residents of the state can register a business in the United States. Foreigners do not need a passport or a green card to start a business; a work visa is sufficient for employment in one’s own organization.
The American business model is based on equality, competition, and mutually beneficial cooperation. According to the Doing Business rating, the United States ranks sixth in terms of ease of doing business. All business processes in the US are carried out online and as quickly as possible. iWorld experts also included the United States on the list of the best countries for foreign entrepreneurs.
The United States has the Generalized System of Preferences (GSP), which aims to develop international business relations. Under this program, developing countries gain access to the U.S. market and the right to import products duty-free.
While residency isn’t required to register a business in the U.S., foreign entrepreneurs often encounter limitations when operating a company in the country. One effective way to bypass these barriers is to apply .
Doing business in the USA: regulations for foreigners
Foreign nationals who are legally in the United States have the same rights as Americans when registering a firm. Immigrants can start their own enterprise or buy and sell businesses. Non-residents also have the right to operate an organization in the U.S. from abroad through an officially registered agent and to purchase stock or serve as a remote director of a firm without an entry permit. However, in order to operate a business in the United States, a foreign national must obtain a business visa. This document grants the right to official employment within their own organization.
All entrepreneurs planning to open a business in the United States must meet certain eligibility criteria. There are internal requirements concerning the conduct of business within the institution, as well as external factors affecting taxation and communication with government agencies. The specifics of paying fees and reporting are regulated by a state’s legislation. All entrepreneurs in the United States must obtain a license and health insurance for their employees. Each activity requires a corresponding authorization. For example, restaurateurs need a health and safety certificate, and alcohol producers/manufacturers need a license to sell alcohol.
Buying a ready-made business or starting a company
Foreigners can start their own businesses or purchase existing ones in the United States. For novice managers, purchasing an existing organization is the best option. Purchasing a company in the US may be less costly than starting from scratch. The advantages of a ready-made business include the opportunity to immediately generate income without the need to hire staff, set up the premises or office, enter the market, develop external relations, or search for clients.
Disadvantages include problems with the incompetence of specialists and staff turnover associated with a change in management. Insufficient knowledge of the field can lead to reputational and financial losses. Additionally, when buying a company, it is necessary to consider the cost of a lawyer’s and an auditor’s services to check the business’s legal status and tax debt.
The advantages of registering a new company in the USA include the opportunity to choose a management model, develop a business plan, hire a team of like-minded individuals, select premises and equipment, and develop a successful business. Disadvantages include profit prospects in the long term, building a reputation from scratch, finding a client base, and developing strategies.
If you have considered buying an existing business or starting a company in the United States, but want the flexibility to move and optimize your taxes, it may be worth considering an alternative: starting your own business in the UAE. For example, Dubai has no restrictions on foreign ownership or management of a business — anyone can open a business and obtain a residence permit, regardless of citizenship, unlike the E-2 business visa in the US. This is ideal for those who want to work internationally while remaining tax residents of another country.
How to open a company in the USA: step-by-step guide
- Define the business environment. Each state has its own laws, taxes, and business regulations. The choice of location depends on the business’s area of operation, target market, and local laws. For instance, if an entrepreneur intends to work in the chemical industry, he or she must determine whether the U.S. Department of Health and Human Services permits this type of activity in the region.
- Choose the business’s legal and organizational structure. Depending on the field of activity and the future organization’s scale, the entrepreneur chooses the business model. Entrepreneurship in the USA can be pursued alone or in partnership with others. Opening independent public corporations and nonprofit charitable companies may also be an option. The business structure determines the specifics of taxation.
- Create a trademark and company name. An original name distinguishes a brand from competitors and is a tool for promoting it in the market. Business owners in America should create a unique trademark and register it with the U.S. Patent and Trademark Office. When developing a website, a unique domain name should also be chosen and approved.
- Business registration. Opening or relocating a business or establishing a branch office of a company in the USA takes place at the local administrative level of a certain state. Applications can be submitted online or in person at the relevant state office. Entrepreneurs must submit a dossier containing the institution’s registration data and documents related to its field of activity to the relevant authorities. The applicant must fill out a special form and pay a USD 300 state fee. The result is the receipt of a certificate registering the organization.
- Obtain an EIN. An Employer Identification Number (EIN) is a federal tax identification number for employers, and it must be obtained immediately after registering the business. This document is required for paying taxes, paying salaries to employees, opening a bank account, and other financial transactions. U.S. citizens can obtain the code using the IRS online support tool. Foreigners must send a request by email or visit the fiscal service in person.
- Apply for a license. Entrepreneurs should obtain a special business license from the authorized territorial government agency. For example, the U.S. Department of Transportation protects the activities of carriers, the Alcohol and Tobacco Tax and Trade Bureau issues licenses for alcohol and tobacco products, and the Federal Communications Commission issues licenses for businesses in radio and television broadcasting.
- Open a bank account. Using the EIN, the entrepreneur can open a corporate account at a local bank. You can apply at any U.S. financial institution by providing an EIN, incorporation documents, and a business license. The bank may also require additional documents from the applicant.
- A policy is a mandatory document for business owners in the United States. Depending on the type of business, insurance may cover product quality, real estate, general liability, or the business owner.
All stages of starting a business in the USA are mandatory for entering the market and conducting business operations. Support from international law specialists can help you avoid common mistakes and complete business immigration in the shortest possible time.
When choosing a state and business model, consider not only local legislation but also international tax implications. Registering as a resident in Spain or the UAE will optimize taxes and simplify company management. This is especially important for those who plan to work remotely with American partners. .
Different aspects of company registration in America
The specifics of starting a business in the USA depend largely on the industry, management style, and chosen state. Each administrative unit establishes its own legislative conditions. All business owners must comply with the law and fulfill their tax obligations in a timely manner.
Legal forms of business activities
The first step in setting up a company in the United States is choosing a business structure. Foreigners can open the following types of businesses in the United States:
- Sole Proprietorship. This type of business is ideal for master cosmetologists, legal consultants, and tutors. A sole proprietorship is not a separate business entity; it is solely owned by an individual, who is fully liable for obligations. A SP cannot sell shares in the firm or take out a bank loan. Nevertheless, this type of business is a good option for exploring business ideas before establishing a larger organization.
- Partnership. A company is incorporated when more than one entity is involved. In the U.S., it is possible to form limited partnerships (LP) and limited liability companies (LLC). In the former, all business project participants bear full financial responsibility for the assets; in the latter, everyone risks only personal investments. A partnership is a good choice for activities that require teamwork, such as IT institutions, staffing agencies, and real estate agencies. It is a convenient form of management for medium and small businesses.
- Corporation. It is the most common and reliable way to do business in America. Because corporations function separately from their shareholders, co-owners are not personally liable for obligations. However, unlike sole proprietorships and LLCs, corporations are subject to double taxation, whereby deductions are made for the organization’s profits and each shareholder’s dividends separately. Shares of corporations can be traded freely on the stock exchange. This type of company is ideal for large businesses with a large number of employees.
- Closed Joint Stock Company. A closed joint-stock company is similar to a corporation, except its shares are prohibited from public trading. A small group of co-founders can manage closed-type organizations without a board of directors. This structure is well-suited to large companies created as part of a family business.
Required documents
The documents required to register a business in the United States depend on the firm’s structure. The basic documents needed are:
- A copy of the founder’s ID;
- Proof of the business’s address;
- Articles of Incorporation;
- Data on co-owners of the organization;
- Taxpayer identification number;
- A bank account certificate.
Depending on the type of business, the applicant may be asked to provide a business plan, information on financing the company’s authorized capital, licenses, and other documents.
Costs and processing times of opening a company
The duration of the company registration process in the United States depends on the company’s activities, structure, and location. Starting your own business can take anywhere from a few days to six months. Registration fees are regulated at the state level; average values are shown in the table below:
| Registration procedure | Costs, $ |
|---|---|
| Enterprise | From 100 |
| Trademark | 250 |
| Licenses | From 50 |
Business taxation in the USA
The first step to paying taxes in the USA is logging on to the US Department of the Treasury website. The payer logs in and submits a declaration for the reporting period. Tax rates are determined at the state legislative level.
| Tax | Rates as of 2023, % |
|---|---|
| Corporate | 21 |
| Dividends | 15 |
| Royalties | 10 |
| Self-employment | 15,3 |
| Social contributions | 12,4 — for social securityи 2,9 — for health insurance |
Tax incentives for U.S. companies
The U.S. government offers tax incentives and credits to support businesses. Each state develops programs that both start-ups and long-standing firms can use. For instance, New York State offers tax preferences to employers who hire people with disabilities. Wisconsin offers financial incentives for livestock businesses.
Separate tax incentive programs support entrepreneurs who create new jobs, develop energy-efficient technologies, and promote urban redevelopment. The federal government gives preferences to small businesses that contract with the government and are based in sparsely populated areas.
Business support in the U.S. varies by state and area of operation. In contrast, Europe’s approach is slightly different; there are more unified programs at the national or European Union level.
Another way to avoid difficulties with American taxation is to obtain a residence permit in a country with favorable tax conditions. For instance, a residence permit in the UAE or Spain enables you to manage your U.S. company remotely using favorable tax regimes. .
Which business to open in the United States of America: an overview of ideas
In order to start a business in America, you need experience, start-up capital, and a suitable niche. Immigrants can find opportunities in various fields, the most popular of which are:
- To start a cleaning company, you only need to rent a small space and hire a few employees. The most appropriate business structure for this industry is sole proprietorship. The main costs associated with setting up a business are advertising and purchasing cleaning supplies and equipment. A professional license is not required for this type of commercial activity. On average, opening a company will cost around USD 1,000.
- Cosmetic industry. A beauty salon can be opened as a sole proprietorship or a partnership. Entrepreneurs have the right to work in their own organization, provide services to clients independently, or rent premises and hire appropriate staff. In order to perform cosmetology, medical, and recreational procedures, a medical license is required. The minimum start-up investment for this business is USD 5,000. The main expenses are related to rent, equipment and supplies, as well as marketing.
- Food service industry. Opening a café, restaurant, or snack bar is one of the most popular businesses in America because many residents are accustomed to eating out. Initially, the costs will be about USD 30,000. The company founder needs to rent premises, equip the kitchen and dining area, hire staff, and conclude contracts with product suppliers. A unique menu will help the business stand out from competitors and increase profitability. To start this type of business, you can register a partnership or a closed or open joint-stock company. If you want to sell alcohol at your cafe, you will need to obtain the appropriate license.
- Transportation service. Depending on the size of the business, an entrepreneur can register as a sole proprietorship or a limited liability company (LLC). Main expenses include the purchase of cars, rent for premises, and organization of car servicing and washing. Starting capital can be as low as USD 50,000.
- Furniture production. A businessman can purchase a company and work there as a manager, or start his own business from scratch. In the case of large production volumes, it would be best to register the organization as a sole proprietorship or corporation. To implement a business project, the owner may need complex, certified equipment, machinery, and chemical materials. The minimum starting capital for opening a small furniture workshop is USD 10,000.
Business immigration: how to obtain a green card through company registration
Foreign nationals who invest more than USD 800,000 in a targeted employment or infrastructure project, or finance a new business venture of at least USD 1,050,000, can obtain a green card through the EB-5 Investor Immigrant visa program. The business must benefit the U.S. economy and provide a minimum of 10 jobs for qualified employees.
To obtain the visa, the applicant must file an I-526 petition with U.S. Citizenship and Immigration Services (USCIS). Processing the petition takes about two years. The filing fee is USD 1,140. A green card allows a foreigner to reside in the United States and, after five years, to apply for citizenship.
If you want to start a business in the U.S. but are unsure about registration forms, taxes, or visa statuses, consider alternative legalization options. For example, UAE resident status allows you to manage your business in the US remotely. During , our experts will help you choose the best option depending on your goals and needs.
Assistance with becoming legal residents of the U.S.
The U.S. government supports entrepreneurs by introducing programs that help developing businesses. However, strict legal requirements for entrepreneurs and their business activities complicate the process of immigrating to the United States for business purposes. Therefore, immigrants often find it easier to first become legal residents and then open a business.
Business immigration to the United States is associated with many legislative details, some of which prevent citizens of certain countries from participating in certain programs. It is often more profitable to first become a legal resident of another country and then conduct business in America remotely. For instance, a residence permit in Spain enables you to optimize your taxes when working with American clients. We will find the most convenient immigration option for you, based on your goals.
Setting up a business abroad:
- Selecting the most favorable jurisdiction;
- Opportunity to open a company remotely;
- 24/7 support according to the contract;
- Residence permits and citizenship for you and your relatives.
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