This article meticulously describes everything you need to do while Company Incorporation in the USA as a foreigner in 2021.
Are you an Indian looking to set up a US company? You will indeed have to pass many more hurdles than a US resident and leave less room for blunders. But there is no need to worry as we can make it a simple and easy process with the right guidance.
The United States of America is truly a haven for blooming businesses because of its tremendous trove of enhanced capital investment opportunities, stable financial transactions, and accelerated growth capabilities. By incorporating your business in the US, you can finally level the playing ground and reach higher profitability levels. The company incorporation in the USA is quite similar to how you would incorporate a company in India.
This article meticulously describes everything you need to do while incorporating a private limited company in the USA as a foreigner.
Decide Which Kind of Business Entity You Want To Incorporate In The USA:
A Corporation or A LLC?
When the owners of the intended company are not US Citizens, they have the choice of either creating a Corporation (also known as “C-Corporation” or “Regular Corporation”) or an LLC. The C-Corporation is the most popular type of entity preferred by foreigners as they are more attractive to investors and can expand by offering unlimited stock. An “S-Corporation” requires all part-owners to be US Citizens; hence a foreigner cannot opt for such a company structure.
Choose The State In Which You Want To Register Your Company In
You can do company registration online in any of the 50 States or Washington DC in the USA. Which state you choose must be based on your company’s business objectives. States like Delaware, Nevada, and Wyoming are more “business-friendly” and “foreigner-friendly.”
For Instance, Wyoming has a meager annual state fee (about $50). Moreover, the Delaware, Nevada, and Wyoming banking system is extremely friendly to international clients without a local office or physical presence in the USA.
If the business you wish to conduct is not specific to any particular state, we recommend incorporation in Delaware, followed by Nevada. This is because Delaware has a very flexible corporate law regime that protects shareholders and directors. Delaware’s state is extremely international-friendly; they have even made their corporate law website available in 10 different languages.
Register Once You Fulfil All The Requirements Needed To Incorporate A Corporation or LLC
After you decide what type of company you want to form and state you want to register the company, a few essential requirements need to be fulfilled.
- Choose a Unique Company Name.
- Select a Registered Agent who has a physical presence in the state where you wish to register your company and will be available to readily receive and sign legal documents on behalf of the company.
- Fill up a certificate of incorporation that makes known the name of the corporation, the name and address of its registered agent, the total authorized share capital as well as its par value, and lastly, the name and mailing address of the incorporator. Charges for this begins at $89 and go upwards depending on the magnitude of the capital raised.
Once the business is finally incorporated, a report must be filed, which will cost you around $50, and you must pay franchise tax (from $175) annually.
Procure An Employer Identification Number
The Employer Identification Number is vital to hire workers and pay taxes, get a business license, and open a bank account. You can apply for the Employer Identification Number with the IRS yourself, or you may also engage online services that cater to the task. If the intended U.S. company’s chief officer (also known as the “responsible party”) has not obtained a Taxpayer Identification Number from the IRS, the company cannot apply for the Employer Identification Number online. In such a situation, the company will be required to apply for it by mail or FAX and fill in “foreign/none.” in the Taxpayer Identification Number column.
These are the few easy steps that will broadly aid you in forming a company in the USA. Keep in mind that there are different procedures and prerequisites laid down in different states. Make sure to look up the guidelines specific to the state you wish to register a company before you start the process.
The road sure is long, but it doesn’t necessarily have to be a difficult one. In our opinion, it is best to solicit assistance from professionals in the field to make the process hassle-free. Vakilsearch is home to a plethora of Company Incorporation experts. Get in touch with them for more information!
Read more: private limited company registration.
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