Incorporation for Non-U.S. Citizens FAQs
What procedure do I follow for incorporating in the United States?
In America, company incorporation takes place at the state level —not the federal level — for both foreign nationals and U.S. citizens. The process will differ from state to state but is generally comprised of two steps: 1.) applying to register in that specific state and 2.) establishing a registered agent with a valid, physical address in the selected state. BizFilings serves as your registered agent authorized to receive legal documents on behalf of your business during standard business hours.
To form a company as an LLC or corporation, formation documents must be filed with the appropriate state agency, which is most often the Secretary of State. You are also required to pay mandatory filing fees. A corporation’s formation document is typically referenced as the Articles of Incorporation or Certificate of Incorporation, depending on the state. The Articles of Organization or Certificate of Organization are standard names for LLC formation documents. Formation paperwork is used to advise the state and the public of specific details relating to the company. Formation documents serve as a formal record of reference to the corporation’s or LLC’s existence.
LLCs and corporations must supply specific details in their formation documents. The mandatory disclosures vary minimally by state.
U.S. residents will likely need a Federal Tax Identification Number (EIN) to start their business. This process requires a Social Security number. For foreign businesses, an Individual Taxpayer Identification Number (ITIN) may be used instead of a Social Security number. The Internal Revenue Service (IRS) issues these tax processing numbers to individuals who are required to pay U.S. taxes but are not eligible for a Social Security number. Residents and non-resident aliens as well as foreign nationals fall into this category.
Back to Top
Which business type should I select?
Comparable in title and operation to businesses in other countries, the primary business formation structures are sole proprietorships, partnerships, corporations and LLCs.
Certain business structures restrict whether non-U.S. citizens can be owners of a business formed as a company or corporation in the United States. With LLCs, there are no limitations on the number of investors who can own interests in the business and no restriction on non-U.S. citizens assuming roles as members (owners). By contrast, if the corporation distributes profits to the shareholders in the form of dividends, shareholders pay income tax on those distributions; thus, C corporations are often criticized for imposing "double taxation."
Learn more about which business structure type might be right for you by using BizFilings’ Incorporation Wizard. You can also view our Business Type Comparison to view business type options side-by-side.
Back to Top
Which state should I choose to incorporate my company?
This answer depends on whether your company has an actual presence in the United States. For example, if your company has an office in Los Angeles, you may wish to incorporate your business in California. If your company does not plan to have a physical presence in the U.S. (translating that it will operate solely from outside U.S. soil), then forming a corporation or LLC in Nevada or Delaware, the two most business-friendly states, may be desirable. If your non-U.S. company operates in more than one U.S. state, you may form your company or corporation in any of these states, but you must also register to do business in the other states through a process called foreign qualification.
In some cases, the laws of your company’s home country may dictate the choice of entity, so it is vital to consult with an attorney familiar with both U.S. and international law to make an informed decision.
Back to Top
How do I determine my resident status?
If you are a non-resident, you are taxed in the United States only on U.S. source income (for example, your share of the LLC’s income). If you are a U.S. resident, you are taxed on your worldwide income.
Resident status is not limited to those having a green card. Resident status also applies to those with a physical presence in the United States. For example, for 2009, a person is treated as a resident if he or she is in the United States for at least 31 days and at least 183 days during 2007, 2008 and 2009 (counting all the days in 2009, but only 1/3 of the days in 2008 and 1/6 of the days in 2007). Even if this residency test is satisfied, you can still be treated as a non-resident in certain situations (for details on determining residency and tax obligations, see IRS Publication 519, U.S. Tax Guide for Aliens. Non-U.S. businesses that do not operate in the United States (for example, do not have any income from U.S. sources), do not owe any federal income taxes; however, there may be annual state charges or fees for maintaining the LLC or corporation.
Non-U.S. companies that do not want to form a business here but merely wish to import their products to the United States should explore import rules by navigating the Commercial Importing Procedures and Requirements.
Back to Top
After I incorporate in the United States, what do I need to do in my home country?
If there are any reporting and/or filing requirements, they are determined by the laws of an individual’s home country. Therefore, it is advisable to consult the laws of your home country to find out what your obligations are resulting from the formation of an LLC or corporation in the United States.
Back to Top
What is an Apostille and why do I need it?
An Apostille is a method of certifying a document for use in another country (pursuant to the 1961 Hague Convention). An apostillized copy of the Articles of Incorporation or Articles of Organization is typically required to open a bank account in another country for a U.S.-incorporated business. The Apostille essentially serves as proof of your U.S. incorporation and is globally accepted and recognized. BizFilings’ incorporation service package for non-U.S. citizens includes an Apostille.
Back to Top
What is registered agent service and how does it help me?
The registered agent is accountable for important tax and legal documents on behalf of incorporated companies. These documents may include:
- Service of Process, which initiates a lawsuit
- State mail, such as annual reports or statements
- Tax documents
The registered agent is also required to keep a physical address (not a post office box) in the state of incorporation or qualification. Additionally, the registered agent is required to be available during normal business hours.
With BizFilings' Registered Agent Service, we consistently monitor corporate registration obligations in all 50 states to help keep you on top of important compliance events even when you are abroad.
Back to Top
What is the cost of Registered Agent Service?
BizFilings includes our Registered Agent Service free for six months in our incorporation packages for non U.S. citizens and residents. You also avoid interruption of this valuable service with our convenient auto-renewal program. At the time of renewal, you can choose to renew your company’s Registered Agent Service yearly for $167, two years for $249 (save $129) or three years for $348 (save $219).
BizFilings' Registered Agent Service goes beyond satisfying the state's legal requirements for registered agent service providers. We partner with our customers to help keep their company's in compliance with ongoing state requirements. Our customers receive the following for free with their Registered Agent Service:
Back to Top
- Access to BizComply. Our online compliance management and calendar tool comes prepopulated with compliance alerts for your company type and state of incorporation.
- Registered Agent Watch. Our monthly email outlines your company's status in your state of incorporation, provides compliance tips and more.
- Electronic delivery of Service of Process. Any Service of Process (the document that initiates a lawsuit) received for your company is delivered to you electronically and also scanned into our Online Status Center, providing you with 24/7 access to these important documents.
- Online access to your account. Access your account online, when it is most convenient for you, to update contact information, pay invoices and more.
Can nonresidents own shares in an S corporation and/or a C corporation based in the United States?
Under U.S. tax law, a non-U.S. citizen may own shares in a C corporation, but may not retain shares in an S corporation. S corporations allow shareholders (owners) to report their portion of business income and expenses on their personal income tax returns and avoid corporate level taxation. The U.S. tax rules dictate that non-U.S. citizens cannot be shareholders of S corporations. For these reasons, many non-U.S. citizens operating businesses in the United States choose to incorporate their business as an LLC. Typically, there are no limitations set on who may own an interest in a U.S. LLC.
Back to Top
What is Mail Forwarding Service?
If you decide to incorporate your business in Delaware or Nevada but don’t maintain a physical address there, you may consider using Mail Forwarding Service. This service is a quick and confidential way to obtain your personal and business mail.
Both the Delaware Mail Forwarding Service and the Nevada Mail Forwarding Service include:
- 12 months of Mail Forwarding Service
- Receipt of a physical street address in Las Vegas, Nevada, or Newark, Delaware
- Postage account that will be debited for each forward
It’s important to note that the Mail Forwarding Service differs from Registered Agent Service in that the Mail Forwarding Service is for receipt and forwarding of business and personal correspondence, such as small packages and letters. Registered Agent Service is used for receipt and forwarding of legal and state correspondence, including Service of Process and state tax documents.
Back to Top