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How to Make it in America: How Foreign Entrepreneurs Can Start a Business

Published on Jul 2, 2013


Starting a company in the U.S., as an immigrant, is not impossible - you just need to know the ins and outs of foreign entrepreneurship.
How Foreign Entrepreneurs Can Make it in America The United States of America has long been a destination for immigrants, where foreign entrepreneurs can achieve the American Dream by starting their own company and reaping the benefits of their hard work and success. In the great melting pot that is our country, there are no U.S. or state laws barring non-U.S. residents from forming a business – the American marketplace is open to everyone. As an entrepreneur, incorporating a company is a difficult, stressful process to begin with, however – imagine adding the stress of being a foreign entrepreneur on top of that. As a foreigner, what are some ‘must dos’ you must remember when first forming a corporation?
The Ins and Outs of Foreign Entrepreneurship Starting a company in the U.S., as an immigrant, is more complicated than doing so if you are originally from the U.S. But it’s not impossible – you just need to know a few of the ins and outs of foreign entrepreneurship.
  • You’re from a treaty country: If you’ve immigrated to the U.S. from a treaty country, you’re eligible for the E2 – the closest thing to a startup visa. What does this entail? You must invest your own money in the company. Just how much money will depend on the type of corporation you wish to start.
  • You’re not from a treaty country: You’ll have to use the or O1 or H1B if you don’t originate from a treaty country.
    • The O1 is for ‘aliens of extraordinary abilities’ – needless to say, it’s difficult to qualify for this visa. It may also be more expensive, as you’ll need a lawyer and recommendations from ‘experts’ in your field (investors, entrepreneurs) to prove your worthiness of this visa.
    • The H1B is likely your ideal option. Known as the ‘work visa,’ it’s the common solution for most foreign entrepreneurs. Important to note: The H1B requires you to have a board that employs you.

What type of business? Once you’re in the United States, have come up with a business idea and have obtained a visa, it’s crucial to incorporate your business. Why? By incorporating your company, you can rest assured your personal assets are protected from risks such as losing your house or savings. When determining which legal structure is right for you, consider the following options frequently chosen by non-U.S. companies operating within the United States. Of note: S corporations, which are corporations that have elected a special tax status with the IRS, are not allowed to have a non-U.S. citizen as owner.
  • Limited Liability Company (LLC): An LLC incorporation is appealing because it has no limit on the number of business owners, or who can be the owner of the business. LLCs allow for pass-through taxation, where no tax is paid on business profits at the entity level. Profits and losses are instead reported on the owners’ individual tax returns, and any tax due is paid at the individual level.
  • C Corporation: Like LLCs, the standard or C corporation doesn’t have a limit on the number of owners (shareholders) or restrictions on who can be owner. Unlike an LLC, however, the profits of a C corporation are taxed at the entity level. What does this mean? If the corporation’s profits are distributed to shareholders as dividends, the shareholders must pay income tax on those dividends, which is a double taxation of the corporation’s profits.
  • Nonprofit Corporation: If you’re looking to form a charity or organization for the public good, consider paying it forward by forming a not for profit organization.
Regardless of the entity you choose for your startup, consult with an attorney to ensure you’re making an educated decision regarding which type best fits your business goals! Although starting a business in the United States as a foreign entrepreneur has its challenges, you’re likely passionate about an idea and determined to see it through. It takes strength and courage to leave your place of birth and start fresh in a different country. Just remember to apply that same strength and courage when incorporating your business and you’ll prove to have what it takes to make it in the Land of Opportunity!