Business and company owners alike strive to help their investments grow. And whether your existing business is ready for an expansion to the US or you plan to open your first business in America, there are things you should know before you get started with the process.
While it may seem daunting at first, opening a business in the united states as a non-resident is doable and has many benefits. From international tax services consulting to property searching and permit applications, a lot goes into opening a business abroad.
Here at Accountants Without Borders of San Diego, we have plenty of experience offering support to non-residents starting their business here in America. Based on our experience and basic information about the process, here are five things to know before starting a US business from overseas.
Select a company structure
It’s important to select the right company structure for your business. Most international business owners planning to create a US-based company opt for a C corporation. C corporations tax the shareholders or owners separately from the business itself. It also taxes on a personal and corporate level. While this double taxation may seem like a downside, it limits investors’ liability since they can only gain or lose as much as they put into the company. This structure is ideal for abroad companies, especially if you may not always be onsite to monitor how the company is doing. Other preferred structures include an S corporation or a B corporation.
Register your company
Once you have a company structure selected, it’s time to register your company in a US state. While it may be appealing to register your company in a state with low tax rates, it’s best to register it where you plan to do the most business. If you aren’t planning on doing business in one state in particular, you can look for the low-burden states with flexible corporate law, like Delaware.
Name your company and incorporate it
After you’ve registered your company, it’s time to pick a name and incorporate your business. Make sure to pick a name that’s easy to remember, and think ahead for marketing materials and online presence. Keep the name short and sweet to help people remember it and find an appropriate URL for your website. Finally, file to incorporate your business and pay the franchise tax.
Get your Employee Identification Number
It’s important to have an Employee Identification Number (EIN.) You can apply for this free with the IRS. You’ll need an EIN to open a business bank account, pay taxes and even file your taxes. If you need help with international business, we here at Accountants Without Borders are happy to help.
Maintain ongoing records and bookkeeping
Even US residents have a hard time keeping up with their businesses’ bookkeeping. With the many demands that come with running a business, it’s hard to set aside time and crunch the numbers. If possible, set aside time every week to review your income, expenses, anticipated costs and review market trends. These steps will save you a headache in the long run and ensures you’ll be ready come tax time. Filing taxes for a US-based business is a little different for those who live abroad, so it’s best to work with a professional to help you file correctly.
Starting a new business can feel overwhelming at times, so it’s important to get support from those around you. Work with people who are there to help your business thrive, and hire workers that are enthusiastic about your mission.
Accountants Without Borders wants to help people of all walks of life make their dreams a reality, and we’re here to support you as you start your business in the US or overseas. Contact us today to learn more about our services. We can’t wait to work with you!