Starting a Company in the USA as a Non-Citizen: Everything

The United States has long been regarded as one of the most attractive destinations in the world for entrepreneurs and investors. With its large consumer market, strong legal protections, advanced infrastructure, and business-friendly policies, the USA offers enormous opportunities for foreign nationals who want to start or expand a business. The good news is that you do not need to be a US citizen or permanent resident to set up a company in the United States.

This comprehensive guide explains how foreign business owners, citizens, or nationals of other countries can legally establish a company in the USA, the requirements involved, available business structures, taxation basics, visa considerations, and common mistakes to avoid.

Can Foreigners Start a Business in the USA?

Yes. Foreign nationals can legally own and operate a US company. There is no requirement that the owner must be a US citizen or green card holder. In fact, thousands of US companies are fully owned by non-US residents.

However, while ownership is allowed, working physically in the US may require an appropriate visa. Business formation and immigration are two separate legal matters.

Why Start a Company in the USA?

Foreign entrepreneurs choose the USA for many reasons, including:

Access to one of the largest consumer markets in the world
Strong protection of intellectual property
A transparent and stable legal system
Easier access to international investors and banks
Global credibility and trust for US-registered companies
Flexible business structures with limited liability

For online businesses, SaaS companies, e-commerce brands, consultants, and global service providers, a US company can significantly improve credibility and scalability.

Choosing the Right Business Structure

Selecting the correct legal structure is one of the most important decisions when forming a company in the USA.

1. Limited Liability Company (LLC)

The LLC is the most popular choice for foreign entrepreneurs.

Advantages:

Limited personal liability
Simple management structure
Flexible taxation options
No requirement for US residency
Fewer compliance formalities

Best for:
Small to medium businesses, freelancers, consultants, online businesses, and startups.

2. C Corporation (C-Corp)

A C Corporation is a separate legal entity and is commonly used by large companies and startups seeking venture capital.

Advantages:

Preferred by investors
Easy to issue shares
Unlimited growth potential

Disadvantages:

Subject to double taxation (corporate tax + dividends)
More paperwork and compliance requirements

Best for:
Tech startups, companies planning to raise funds, and businesses seeking US investors.

3. S Corporation (S-Corp)

S Corporations are not generally available to foreign owners. Non-US citizens and non-resident aliens cannot be shareholders in an S-Corp.

Choosing the Best State for Company Formation

Foreign entrepreneurs can register their company in any US state, regardless of where they live.

Popular States for Foreign Owners

Delaware

Business-friendly laws
Strong legal system
Preferred by investors
Ideal for corporations and startups

Wyoming

No state income tax
Low filing fees
Strong privacy protections
Popular for LLCs

Florida

No state income tax
Large international business community
Good for physical and service-based businesses

The best state depends on your business model, tax goals, and long-term plans.

Step-by-Step Process to Set Up a Company in the USA

Step 1: Choose a Company Name

Your business name must be:

Unique in the state of registration
Compliant with state naming rules
Not infringing on trademarks

A name search is conducted through the Secretary of State website of your chosen state.

Step 2: Appoint a Registered Agent

Every US company must have a registered agent with a physical address in the state of formation.

Role of a registered agent:

Receives legal notices
Handles official government correspondence
Ensures compliance deadlines are met

Foreign owners usually hire a professional registered agent service.

Step 3: File Formation Documents

LLC: Articles of Organization
Corporation: Articles of Incorporation

These documents are filed with the state authority and include:

Company name
Registered agent details
Business purpose
Management structure

Once approved, your company legally exists.

Step 4: Obtain an EIN (Employer Identification Number)

An EIN is issued by the IRS and is required to:

Open a US bank account
File taxes
Hire employees

Foreign owners can obtain an EIN without a Social Security Number (SSN) by submitting IRS Form SS-4.

Step 5: Open a US Business Bank Account

Opening a US bank account is essential for:

Accepting payments
Paying expenses
Building financial credibility

Some banks require physical presence, while others allow remote account opening with proper documentation.

Typical requirements:

Company formation documents
EIN letter
Passport
Proof of address

Step 6: Obtain Business Licenses and Permits

Depending on your business type and location, you may need:

Federal licenses (for regulated industries)
State licenses
Local permits

Online and service-based businesses usually have minimal licensing requirements.

Taxation for Foreign-Owned US Companies

Understanding US tax obligations is crucial.

Federal Taxes

LLCs: Taxed as pass-through entities by default
C Corporations: Pay corporate income tax

Foreign owners may also be subject to withholding taxes depending on income type.

State Taxes

State taxes vary based on:

State of incorporation
Business activities
Physical presence (nexus)

Some states have no income tax but still require annual fees.

Sales Tax

If your business sells physical products or taxable services, you may need to:

Register for sales tax
Collect tax from customers
File sales tax returns

Tax Treaties

The US has tax treaties with many countries to avoid double taxation. These treaties can reduce withholding taxes and provide tax benefits to foreign owners.

Visa and Immigration Considerations

Forming a company does not automatically grant the right to live or work in the USA.

Common visa options include:

E-2 Investor Visa (for treaty countries)
L-1 Visa (for existing foreign companies expanding to the US)
B-1 Business Visa (limited business activities only)

Immigration laws are complex, so professional legal advice is strongly recommended.

Compliance and Ongoing Requirements

Once your company is formed, you must maintain compliance.

Annual Requirements Include:

Annual state filings
Franchise tax or annual fees
Registered agent renewal
Federal tax returns
BOI (Beneficial Ownership Information) reporting

Failure to comply can result in penalties or dissolution.

Common Mistakes Foreign Entrepreneurs Should Avoid

Choosing the wrong business structure
Ignoring US tax obligations
Not maintaining proper records
Mixing personal and business finances
Assuming company formation equals work authorization
Failing to file annual reports on time

Avoiding these mistakes saves money and legal trouble.

Costs of Setting Up a Company in the USA

Typical costs include:

State filing fees
Registered agent fees
EIN application (usually free)
Bank account setup
Accounting and legal services

Costs vary by state and business type but are generally affordable compared to many other countries.

Benefits of Professional Assistance

Many foreign business owners choose to work with:

Company formation services
Tax advisors
Business attorneys

Professional support ensures:

Legal compliance
Correct tax structure
Time savings
Peace of mind

Final Thoughts

Setting up a company in the USA as a foreign business owner or non-US citizen is completely legal, achievable, and often highly beneficial. With the right structure, proper compliance, and clear understanding of tax and visa rules, foreign entrepreneurs can successfully operate and grow businesses in the world’s largest economy.

Whether you are launching a startup, expanding an existing business, or building an online brand, the United States offers a powerful platform for global success.

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