Select Page

How to Open a Business in the U.S.A.

by | May 16, 2022 | Corporate Structuring

Company formation in the United States for Non-Resident Investors

Setting up a company in the United States is an excellent way of expanding your business in the world’s most powerful country. Starting a new business is an exciting prospect, but it can be a very challenging endeavour as well. The complexity of opening a company in the United States for non-residents should not be as overwhelming and stressful.

While the economic and political climate in the United States is ever-changing, you may be unsure if it’s the right time to proceed investing in the country. However, it is also crucial to note that the United States has been welcoming foreign investors for many decades. This trend is likely to continue for many years to come. 

The Process of Opening a Business in the United States

The process of establishing a business in the United States for non-citizens is a simple and straightforward process. In this guide, we will provide you with everything that you need to know on how to do business in the United States. 

Secure the Required Federal Approvals

By rule, foreign investors need not have a green card to do business in the United States. Additionally, non-US citizens can assume the role of corporate officer or director of a company established in the United States and earn income from it, provided they comply to pay the necessary taxes. 

However, for a non-citizen to be able to work in a company they have invested in, he or she must gain approval from the United States government through an E-2 Treaty Investor or EB-5 Investor Visa. 

E-2 Treaty Investor Visa Classification 

For non-US citizen investors to quality for an E-2 Treaty Investor visa, he or she must meet the following requirements:

  • Be a national of a country with which the United States maintains a treaty of commerce and navigation. 
  • Be actively in the process of investing or have already invested a substantial capital in a certified US-based company. 
  • Be living in or seeking to live in the United States for the purpose of creating and directing an investment enterprise. 

An E-2 visa classification enables non-immigrant investors to be allowed an initial state in the United States for up to two years. Subsequent or extended stays may be granted in two-year increments only. While there are no restrictions to the number of extensions that can be requested by foreign investors, E-2 investors must express an intention to leave the United States once their E-2 visa expires.

E-2 treaty investors may only assume the specific work they were approved to perform under the E-2 status granted. With this in mind, non-immigrant, non-citizen business owners must be cautious about the extent of their involvement in the business. 

For more information about U.S. Citizenship and Immigration Services (UCIS) and about the process of acquiring an E-2 visa classification, you may visit the U.S. Citizenship and Immigration Services. 

E-5 ViSa Classification 

  • Foreign investors that receive EB05 visa classification may be eligible for permanent U.S. residency status and citizenship as a result of their financial investment and commitment to the country. 
  • According to the U.S. Citizenship and Immigration Services, foreign investors may qualify for an EB-5 visa classification by investing in designated EB-5 regional centers. EB-5 regional centers pertain to economic regions, private or public, in the United States that are involved with promoting its long-term economic growth. 
  • Through an EB-5 visa classification, a conditional permanent residence may be awarded to an investor and his or her family members for up to two years. 
  • By rule, within 90 days before the expiration of the two-year period, an EB-5 investor must file an application for conditional permanent residency status to be changed to a legal permanency status.
  • The U.S. Citizenship and Immigration Services (UCIS) provides comprehensive information about the different forms and processes to successfully obtain an EB-5 investor status. 

Selecting the Ideal Business Entity Type

Non-resident investors must understand that there are several restrictions on the type of business structure should they proceed to open a business in the United States. 

For instance, foreign investors cannot form a S-Corporation as shareholders under this structure are required to hold U.S. citizenship or permanent residency status. 

A C-Corporation and Limited Liability Company (LLC) structure are the most common business entity types that foreign investors can choose from. These business structure types offer personal liability protection for business owners and offers greater flexibility when it comes to taxation. 

To establish a C-Corporation or a Limited Liability Company (LLC) in the United States, an investor mist file business registration with the involved authorities and the necessary paperwork in the state where the business will be primarily operating

C-Corporations

  • A C-Corporation is considered a separate legal and tax entity from its business owners or shareholders. 
  • Personal assets of owners are fully protected from legal and financial debts that a company may incur over time. 
  • A C-Corporation company will report its profits and losses on their corporate tax return. 
  • External investors and financial institutions prefer investing in C-Corporations compared to other business entity types. This is primarily due to stringent compliance checks that guarantee operations run smoothly and efficiently. 
  • C-Corporations owned by foreign investors must complete and file paperwork to stay in compliance and benefit from double taxation treaties. 
  • In a C-Corporation structure. some profits may be taxed twice, such as the corporation must pay taxes on its profits, while the individual shareholders pay taxes on dividend income they receive from their business. 

Limited Liability Company (LLC)

  • Regarded separate legal entity from their owners or shareholders, providing full protection from liability in case a company incurs debt in the future. 
  • Members of an LLC may choose if they want their business to be taxed as a C-Corporation or have its profits and losses pass through an owner’s personal tax returns. 
  • A Limited Liability Company is required to meet compliance requirements to continue operating in the United States. 
  • Non-resident LLC owners are required to pay income taxes to the U.S. Internal Revenue Service (IRS) and the state on which they are operating. 
  • Other taxes and fees are assessed at the federal, state, and local levels. 

Appointment of a Registered Agent

  • LLCs and C-Corporations must assign a registered agent in each state where they intent to file company formation documents to receive service of process on behalf of the company. 
  • Service of process pertains to legal notices, correspondence from the Secretary of State, and other official government notifications. 
  • Application requirements for registered agents vary by state. By rule, an agent must be over 18 years of age, have a physical address in the state, and physically available at the address during normal business hours. 
  • Foreign investors may also consider service providers that offer registered agent services to non-residents looking to build a company in the United States.  

Obtaining an Employer Identification Number (EIN)

  • The Internal Revenue Service (IRS) requires all U.S.-incorporated businesses to obtain their taxpayer identification number (TIN). 
  • For C-Corporations and Limited Liability Companies (LLC), they must obtain an employer identification number (EIN) to legally do business in the United States. 
  • As of 2019, the Internal Revenue Service (IRS) has started to allow individuals with a Social Security Number or Individual Taxpayer Identification Number to be considered a responsible party on EIN applications. 
  • Given non-resident investors do not have Social Security Numbers, they can apply for an Individual Taxpayer Identification Number (ITIN) instead. 
  • After successfully receiving Individual Taxpayer Identification Number (ITIN), non-resident investors can then required for an employer identification number (EIN) using Form SS-4. 

Opening a U.S. Bank Account 

To create a corporate bank account in the United States, non-resident investors can follow the following steps:

  • Provide official documentation proof of identification upon application. Requirements may vary across financial institutions. 
  • Official incorporation documents that include an office business address in the United States. 
  • ITIN and EIN 
  • Passport 

Obtain the necessary licenses and permits

Just like any other U.S.-based businesses, non-citizen-owned companies must apply for the necessary licensed and permits that are required in their industry, business operations, and the jurisdiction or state where they plan to operation. 

It is crucial to check with the Secretary of State, county clerk, and local government authorities to identify which licenses and permits are needed for a company to operate legally in the United States. 

Adhere to Ongoing Compliance Checks


Depending on your chosen entity type and where you intend to establish your business, investors must accomplish certain compliance requirements. 

Foreign-owned businesses are mandated to pay taxes on time. Additionally, they must submit an annual reporting to the state, renew the necessary licenses and permits. 

A foreign-owned company must hold a general shareholders’ or members; meetings. 

Inability to adhere to reporting requirements can result in fines, penalties, and loss of an owner’s personal liability protection, suspension, or business dissolution. 

As a non-US citizen, you will face many challenges and additional work when establishing and incorporating a business in the United States. However, these challenges are by no means difficult when you obtain the professional consulting services of Damalion. As an independent consulting firm offering comprehensive company formation, you can rest assured that you have experts to guide you every step of the way. We have an extensive global service network made up of seasoned service providers, including lawyers, accountants, auditors, and business consultants who will help you navigate the company formation process in the United States. Our Damalion experts can help you in various activities, including company formation, management, accounting, bookkeeping, bank account opening, taxation consulting, and more. To learn more on how to succeed doing business in the United States, reach out to a Damalion expert today.

This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.