How a Foreigner Can Start a Business in the USA

Starting a business in the US attracts global interest due to its strong economy and fundraising opportunities. Despite varying rules by state, opening a business in America is relatively fast and straightforward, with online processes.

A great number of people from different countries of the world dream of starting a business company in the USA. This is not surprising at all, as the US economy is the largest economy in the world and what is especially important for many is the possibility to raise funds in America without too much trouble. Some people want to establish a business in the USA with the intention to eventually relocate there for life while others simply want to make some money working in a favorable business environment. Is it possible for a foreign national to start a company in the USA? Ye, it is! Below we will discuss the options that you have if this is what you are thinking about as well as the steps that you will have to take to establish a business in America. We will use the state of California as an example even though you should be aware that the rules and procedures are a bit different in different states of the USA.  

A business in the USA

“How can I open a business in the USA?” This is a highly popular search query indeed. Probably one of the factors that make so many people explore the opportunity of opening a business in America is the ease of the process. Everything can be done fast and without too much bureaucracy. Besides, many issues can be solved online. Both the speed and the cost of company registration can vary from one state to another. The same holds for the taxes that you will have to pay in each state. As far as California is concerned, the taxes are rather high there, we must admit. Then why did we decide to use California as an example? Because the fundraising opportunities are truly superb in the state. It would probably be safe to claim that California is the state where you can find the money for your business project in the fastest way. In addition to the fundraising opportunities, you can find a great number of business incubators in California as well as many other governmental and private agencies that assist entrepreneurs. Now, interacting with the investors and the business incubators is going to be easier for you if your company is located in the same state. This is why we use California as an example.

Open a business in America: available options

There are several ways of establishing a business company in the USA and we are going to discuss only three of them here. We have to note that the first option that we mention is a way of obtaining a working visa to the USA rather than a way of opening a company there.

Option 1. Relocation for business executives

If you have been holding a top position in company management for three years or more, if your company has been functional for one year or more, and if you have subordinates, you can qualify for a non-immigration working visa that is called multinational executive transfer. It is valid for 5 or 7 years and you can use it as a starting point on your way to relocating to the USA. Please note that the American company that you are planning to work for has work in the same business area as your company at home.

Option 2. Invest in the US economy

If you want to buy a company in the USA, you need an investor’s visa (Е-2 or EB-5). This visa is not available to citizens of all countries but only of those that have signed the correspondent agreement with the USA. If your home country doesn’t have such an agreement with the USA, there is a way around the situation. Citizens of Grenada in the Caribbean qualify for investor’s visas to the USA and citizenship of Grenada is for sale. Some food for thought for you. The amount of the required investment is not specified in the US legislation but you have to be prepared to bring at least a few hundred thousand dollars.

Option 3. Open a new business company in the USA

Finally, you can open your own company in the USA. You have to have a social security number to be able to do that. This means that you have to be a legal resident in the country. If you are not, you can enter an agreement with somebody who is. It can be a friend or a hired representative.

How to start you own business in the USA: a step-by-step guide

Step 1: Do your homework

To begin with, choose the form of ownership for your future company – you will have to do some research. Then draw up a business plan, assess the risks, and find investors of partners if necessary.

Step 2: Choose the company name

You will have to ascertain that no company in California operates under the name that you are thinking of. You can do so by logging onto the official website of the Secretary of State.

Step 3: Register the company with the Secretary of State

You can find the company registration form at the website mentioned above. There you will also find some recommendations on completing the form. You’ll have to indicate your address in California and pay between $85 and $115 as the company registration fee. Please note that you may have some additional costs if you act via a US representative. You may also have to rent a PO Box.

Step 4: Register the company with the IRS

A US resident registering a company has to obtain an EIN (employer identification number) and a non-resident has to obtain a TIN (tax identification number). You have to fill out an online application form and send it to the IRS. The service is free of charge. Please note that if you are applying for a TIN, you may want to use some of the Taxpayer Assistance centers that the IRS has.

Step 5: Licenses and permits

Depending on the area of your business, you may need a license or a permit. The information about which one you need is easily available online: simply indicate the area of your business operations.

Step 6: Open a corporate bank account

After you obtain an identification number from the IRS, you can go to the bank and open a corporate account there. Each bank will require its own list of application documents but you have to bring the company registration certificate and supply your EIN (TIN) in all cases.