A Quick Overview
Non-residents can legally own and operate a business in the United States. In fact, there are no US laws that restrict foreigners from forming and owning a company, whether it’s a corporation (C-Corp) or a non-resident LLC.
This is why many international founders choose the US as a hub for scaling their business, accessing investors, or simply building credibility in a competitive market.
Here are a few things to keep in mind:
- You don’t need to be a US citizen or a green card holder. You can live anywhere in the world and still own 100% of your US company.
- You can form either an LLC or a C-Corp. Both structures are open to foreign founders, though C-Corps are often preferred by startups seeking funding.
- You don’t need a Social Security Number (SSN). Instead, you’ll apply for an Employer Identification Number (EIN) from the IRS to handle taxes.
While ownership is allowed, operating your business, especially when it comes to opening bank accounts in the US, handling taxes, and hiring staff, may involve extra steps.
Choosing Between an LLC and a Corporation
When you’re starting a business in the US as a foreigner, one of the first decisions you’ll make is choosing the right business structure. Most non-residents choose between forming a Limited Liability Company (LLC) or a C Corporation (C-Corp).
If you’re forming a US LLC for foreigners, it’s essential to understand how it compares to a corporation so you can choose the one that best suits your goals.
LLC (Limited Liability Company)
An LLC is simple, flexible, and great for small businesses.
Pros:
- Fewer reporting and compliance requirements
- Profits pass through to members and are taxed once
- No need to issue stock or have a board of directors
Cons:
- Might not be ideal for raising venture capital
- Subject to self-employment tax in some cases
C Corporation
A C-Corp is often preferred by startups and businesses that want to scale fast or raise funding.
Pros:
- Easier to attract investors and issue shares
- Clear separation between the owner and the company
- Lower corporate tax rate on retained earnings
Cons:
- Double taxation (corporation pays tax, then shareholders pay tax on dividends)
- More complex paperwork and stricter rules
Still unsure? If you plan to run a lean operation without investors, an LLC may be all you need to get started. However, if you’re thinking big, such as raising capital or entering the US market at scale, a C-Corp is likely the better choice.
How to Register a US Business as a Non-Resident
Before you dive into launching your US business, it’s good to think about where to set it up. While you can register in any state, some are more business-friendly than others. Many founders ask about the best state to form an LLC for non-residents; popular choices include Delaware, Wyoming, and Florida due to their simple regulations and low fees.
Here are the overall steps:
Choose Your Business Structure
Most non-residents go with an LLC or C-Corp. Choose based on your goals, how you want to be taxed, and your long-term plans.
Pick a State
Select a state that suits your business needs. For example, Delaware is popular for tech startups, while Wyoming is known for privacy and low costs.
Hire a Registered Agent
You’ll need a registered agent with a physical address in the state where you’re forming your company. They handle legal mail on your behalf.
File Formation Documents
Submit the required paperwork to the state (usually called Articles of Organization for LLCs or Articles of Incorporation for C-Corps). Pay the formation fee.
Get an EIN from the IRS
Apply for an Employer Identification Number (EIN). This is like a Social Security Number for your business, essential for taxes and opening a bank account.
Set Up a US Business Bank Account
Once your company is registered and you have an EIN, you can open a business bank account. Many non-residents go with fintech platforms like Mercury or Wise.
Stay Compliant
Remember to stay on top of annual reports, renewals, and any state-specific requirements.
It might sound like a lot, but with the right guidance (and tools like EINwaittime.com), the whole process becomes much more manageable.
Tax and Compliance Considerations
Setting up your US company is just the beginning. To keep your business running smoothly and legally, you need to understand your tax and compliance obligations. As a non-resident, this part may seem tricky, but it’s manageable if you stay organized.
Here are key things to keep in mind:
Federal Taxes
All US businesses must file federal tax returns.
- LLCs are usually “pass-through” entities, meaning the profits pass to the owner and are reported on their tax return.
- C-Corps file separate tax returns and pay corporate income tax.
If you don’t live in the US, you may not owe personal income tax, but your US business might still owe taxes to the IRS. So, just to be safe, it would be best to consult an accountant who specializes in cross-border taxes to get clarity on your specific situation.
State Taxes
Your tax obligations depend on where your company is registered. Some states, like Wyoming and Texas, don’t have income tax, while others (like California) do. Always check with the state’s tax office to know what applies to your business.
Annual Reports and Fees
Most states require you to file an annual report and pay a fee to keep your business active. Failing to do this can result in penalties or the dissolution of your company.
IRS Forms for Foreign Owners
Non-resident owners of US LLCs or corporations may need to file special forms, like:
- Form 5472 (for foreign-owned single-member LLCs)
- Form W-8BEN or W-8BEN-E (to declare tax treaty benefits)
- Form 1040-NR (if you’re personally involved in US business activities)
Get a US Tax Professional
Since US tax laws can be complex for non-residents, it’s smart to hire a CPA or tax advisor who works with international clients. They can help you avoid expensive mistakes and file everything correctly.
Maintain Proper Records
Keep all your invoices, receipts, and financial records organized. You’ll need them for taxes and in case of an audit.
Final Thoughts
So, to answer the question, can a non-resident own a US company? Absolutely. Expanding your business to the US is always an exciting prospect. With the right structure, a clear understanding of the process, and attention to legal and tax requirements, you can confidently launch your US venture from abroad.
If you’re ready to move forward but unsure where to start, EINwaittime.com can help you get your EIN fast, guide you through the business formation steps, and simplify the paperwork all in one place. Start your US business journey with the right tools and support.