Whatever your reason for setting up you will need to consider a number of factors:
- Immigration and visa requirements. You can own a company in America without a business visa and you can be a director. You can manage the company from outside the country, but if you become an officer of the company or go to America to manage the business, you will need to have an appropriate visa. If you do work for the company in America without an appropriate visa you can be deported and the company is likely to face a fine.
- There are a range of investor and temporary worker visas that allow you to work in America. The US Department of State, Bureau of Consular Affairs sets out the terms and procedures for these visas:
EB5 Immigrant Investor Visas – US immigration law makes visas available to immigrant investors seeking to enter to engage in new commercial enterprises that benefit the American economy through job creation and capital investment. Detailed terms and procedures are available on the Immigrant Investor Visas pages on the Department of State site.
To qualify as an immigrant investor for an E5 visa, a foreign national must invest, without borrowing, the following minimum qualifying capital dollar amounts in a qualifying commercial enterprise:
- $1,000,000; or
- $500,000 in a high-unemployment or rural area, considered a targeted employment area.
A qualifying investment must, within two years, create full-time jobs for at least ten American citizens, lawful permanent residents, or other immigrants authorised to work in America, not including the investor and the investor’s spouse, sons, or daughters.
Temporary worker visas – Full details of the categories can be seen on the Department of State site covering temporary worker visas. There are a number of available visas and your circumstances will determine which are the most appropriate.
Other options – Other options such as family visas may apply if you have a spouse, parent, son or daughter or brother or sister who is an American citizen. If you have a spouse or parent who is a lawful permanent resident of the country this may also allow you to apply for a visa.
Although it should be possible to gain an indication of the visa options that may be available to you, professional advice is essential to ensure that you identify the best visa to meet your circumstances and needs and obtain the visa as quickly and efficiently as possible.
- Location. Where is the best place for your business to be based? Is this driven by supply chain, transport infrastructure, available skilled staff, marketing or other required support services? What market are you serving and will the local demographics be a factor? State laws vary and it will be important to understand if they have an impact. There may also be tax incentives in some locations.
It is worth drawing up a checklist of considerations when choosing your location and checking which states and cities best meet your needs. Once this has been narrowed down a visit to talk to other companies, local officials and recruiters can help you to decide the best fit for your business.
- Incorporation. Where is the best place for your business to be incorporated? This could be the state where you have set up your business, but it does not have to be. Doing so is likely to reduce your costs as you will not have to pay fees and taxes in two states, but there can be an advantage in incorporating in other states.
Delaware is a popular state for incorporation as it does not charge corporation tax on corporations that do not do business in Delaware and has one of the most flexible and efficient legal systems in the country, with cases decided by a judge rather than a jury. This can be a good choice if complex litigation is a consideration.
Doing business in a state determines whether you are liable for state taxes, not where you are incorporated.
If you plan to do business in more than one state you will need to be registered to do business in each state where you plan to do business. To avoid separate incorporation you can use the process of ‘foreign qualification’. This refers to doing business in another (‘foreign’) state rather than outside the country. This process allows you to have one corporation with one set of shareholders, directors and by-laws, but does mean that the liabilities in other states will be held by the one entity.
The company name is only protected in the state where the company is incorporated and where it is registered to do business.
- Legal. Do you need to protect any intellectual property or to obtain any special licences?
- Entity. What is the best type of entity to set up? There are two types of business in the US, a corporation or a limited liability company. Non-US residents forming a new company will need to understand the differences between the types of US business entities. Business entities are formed under state law instead of federal law and the rules and requirements are different from state to state, but there are common themes.
You can see the differences between these types of entity on sites of service providers. There are various advantages of each type of entity, which affect the ownership, limitation of your liabilities and ease of transferring ownership.
Corporations should not be used to own real estate.
LLCs should not be used if you are starting up an active trade or business if you are a non-resident entrepreneur as it will cause complexities in international tax.
Formation of a company can be done online, but you should take professional advice to ensure that you use the best structure to facilitate your plans. Once formed and registered, a meeting will be held to appoint directors and officers, issue shares and take other necessary actions. It will then be necessary to obtain the federal Employer Identification Number, which is required in order to open a business bank account.