If you live in the USA and are actually from a different country but want to start a business, read on. As an expat you may already have been resident for a number of years, you may be a homeowner. However, to start a business in the US there are protocols to follow. Here is the expats guide to starting a business in America.
Expat Guide To Starting A Business In America
There are a few hoops you need to jump through when starting a business in America. This is especially true if you’re an expat. In this article we’ll go through the process of starting a business in the USA when you have expat status. Since the US is huge country with different processes for starting up businesses, we offer basic information basic as a guide. The information given should apply to most US states and offers you a starting point.
If you want more specific information, here you can find other resources on how to register a business in the US.
When you’re starting a business in the US, you need to have employment authorization. With this authorization you can create a workplace and possibly hire others. For that, you’ll need to have the correct visa that justifies your presence in the US as a foreign national. This give you the right to work. For expats like you, this will typically be one of three visas:
The E-1 visa is secured by treaties of commerce and navigation with partner countries. It also works with international agreements that connect the US to other countries via trade. Foreign nationals from these qualifying countries can apply for an E-1 visa. Whereas those from other countries can’t. If you’re fortunate enough to be from a treaty co-signer country, you should be able to get one of these. Since America is a world superpower, there is a long list of E-1 treaties with many countries. Make sure you check if your country has one of these agreements online.
For an E-1 treaty to remain active, there needs to be a steady stream of substantial trade. This is where goods, services, and/or technology items are consistently exchanged overseas (or across borders). When applying for an E-1 visa, you need to assure that you’ll contribute to this trade flow. Nationals must engage in substantial trade to secure the visa. This means ensuring that at least 50% of your business will involve trade between your home country and the US.
Because of this, the E-1 visa is most accessible to those with existing businesses who are moving to the US. They can then expand the business operation overseas.
Like the E-1 visas, E-2 visas are secured under another type of agreement between the USA and other nations. E-2 visas allow expats to enter the US to work on business operations that they are investing in. To prove that such investment is taking place, a large amount of capital is required for investment in the business. This proves that you’re the real deal. This is typically 50% of the total valuation of the business.
If you’re an expat looking to start a business in the US, this should be the best visa for you. You don’t need to have your business established already. You can be in the process of starting your business while applying for the E-2 visa, as long as you’ve reached the minimum funding requirements.
If you already own a business but you can’t go for an E-1 visa for whatever reason, an L-1 visa is usually an option. L-1 visas are for intracompany transfers between countries. So if you’re a foreign national who is employed in a business overseas then you may be able to come to the US to expand operations.
To qualify, you’ll need to have appropriate office premises set up and some investments. These will be used to maintain the business once you’re there. You’ll need to be a specialized member of the company too, whether that’s an executive, a high-level manager, or an employee who has received special training regarding operating the company across borders. To that end, the employee needs to have experience running overseas operations for one year, and within three years of application.
Since you’re expanding business operations to the US, you also need to have a branch or a business affiliate established in America, with explicit managerial and financial ties to the foreign business.
To conduct business operations in the US when your business has links to foreign-owned entities, you’ll need to be incorporated.
This matters whatever your business, whether you are buying and selling cryptocurrencies online, or trading products in a retail outlet. If you buy USDT it is just as important to get incorporated as if you were buying and selling farm supplies or luxury goods. Getting incorporated should be the first thing you plan to do. It eliminates so many obstacles to trade and keeps you on the straight and narrow.
This is where you’re registered within the occupied state, for which you’ll need an address within that area. You can’t use PO box numbers; they are prohibited since you need a more substantial business presence in the state to register properly.
You’ll also need to give your name when incorporating your business, which requires the name of you, the expat, if you’re the business owner. It could also be somebody else who is qualified and able to take legal paperwork for the business. Examples of such individuals would be a business attorney.
How To Start
With the expats guide to starting a business in hand, you can get going. You may have a business running already if you have a pre-existing company overseas. However, your business might need to meet additional requirements when getting started in the US. Here’s a complete rundown to help all readers.
Type Of Business
The business type determines which tax brackets you fall into. Remember that you’re going to pay both federal and state taxes. If money is a concern, starting in a state with lower tax requirements may be best for entrepreneurs who need to save cash.
The business types are:
- Proprietorships – Sole proprietorships are where you own an unincorporated business yourself. This obligates you to pay income, self-employment, federal unemployment, excise, and social security or Medicare taxes.
- Partnerships – Partnerships need at least two people leading the business. These businesses don’t have to pay income tax but have to file annual reports on how capital is used. It may be liable for excise and employment taxes, too, and individuals in the business will be obligated to pay self-employment and income taxes.
- LLCs – Limited Liability Companies change depending on the home state, so the tax obligations change with it. There’s added complication with foreign LLCs, so consulting a tax lawyer may be best before committing to an LLC license.
Things You Need
Registering a business is different from maintaining a successful business and keeping it funded. This is a crucial point in our Expats guide to starting a business in America. To conclude, here are four things you’ll need throughout the application, funding, and business operations of your new venture.
- Get A Business Plan – These are the foundations of any well-maintained business and they’ll be required if you want a loan or any other substantial funding. The plan is a roadmap of how your business is going to grow and the goals you can reasonably achieve along the way.
- Do Market Research – Most business plans should have market research factored into them. This gauges how many potential customers you have for your product or service, which is important when you’re an expat who isn’t familiar with US markets.
- Get Funding – This may not be necessary if you have a nest egg built up, but you’ll need to go through the application processes for them if you need a loan. The best loans will take more convincing to secure, such as loans granted by SBA-approved lenders. You’ll probably want a business bank account to keep your finances easily manageable.
- Finalize Paperwork – Once your business is set up, you need to get appropriate federal and state tax IDs by using your EIN (Employee Identification Number). You should also get any licenses or permits that are necessary for conducting business, if necessary.