If you are looking to expand your existing business or start a new business in the largest market in the world, the United States, then you have come to the right place.
You need to know that you do not have to be a US citizen or a resident to form a company in the US. However, there is a laid down process to set up a company in the US and unless you’re an incorporation expert, you may get confused and make very costly mistakes.
To help you avoid these pitfalls, we have broken down the steps you need to follow to incorporate your company in the US in this piece.
Choose a suitable, valid business name for your company
First, before you incorporate your US company, you must first research the proposed name of the business to be sure the business name has not already been used by someone else and is available to you. There are a few guidelines to help you select the best name for your company. For example, it is important that you follow the naming guidelines of the state in which you wish to register your company.
Learn more about how to name your US company here.
Decide what type of company you want to incorporate
In addition, you need to decide what type of company you want to form or incorporate. In the US, the main entity types are LLC, C Corp, and an S Corp. However, non-residents are not allowed to form an S Corp.
So you can select between an LLC or a C Corp. Having clear objectives can help with your decision-making.
A C Corp is a company structure in which the owners and/or shareholders are taxed separately from the C Corp itself. They are subject, however to corporate income taxation. Taxing of profits can occur both at the corporate level as well as personal level. This creates a double taxation scenario.
On the other hand, a Limited Liability Company (LLC) is a simpler company structure. The owners of said company are called members and are not liable or held responsible for the company’s debts or liabilities. This entity type adopts pass-through taxation wherein the tax due is passed on the income tax of the founder of the company.
Choose a state to incorporate in
The next major decision you have to make is where to incorporate your business. At Kwanza, we recommend either Delaware or Wyoming because they provide the best and most business-friendly laws.
Investors prefer these states as they provide an investor-friendly environment e.g the court of chancery which hears business matters only, resolves disputes quickly, and guarantees both founder and investor protection.
A lot of companies have found success incorporating in Delaware and Wyoming due to their business-friendly and flexible state tax laws which are far better than most other states in the US. Wyoming for example does not have an individual income tax. Wyoming also does not have a corporate income tax.
Complete an application on Kwanza
Now you can go ahead and complete your application on Kwanza. Simply provide all the required information about your company and founder(s) in the form and we’ll take it up from there. Your company should be registered 24 – 72 hours after.
As part of our company formation service, we will provide you with:
- LLC or C Corp formation in Wyoming or Delaware
- A registered agent in the state you incorporate in
- An employer identification number (EIN) which is your company’s tax ID
- A US bank account for your business
- A US address
- Free 1:1 calls with tax, legal, and US immigration experts
- Startup perks worth over $50,000
- Lifetime support
- Access to exclusive business resources, events, and webinars to help you
Obtain your company EIN i.e tax identification number
In the US you are required to have an Employer Identification Number to conduct business. You also need it to open a business account for your company, pay taxes, employ talent, register on payment platforms like Stripe to start collecting payments from customers, and eCommerce platforms like Amazon and eBay among others.
You can obtain this number by filing an SS-4 or Employer Identification Number Application with the IRS (Internal Revenue Service). Kwanza will help you with this process so you don’t have to bother. With a one-time payment of $499, we’ll manage your entire company formation in the US as stated above.
Open a bank account
What’s a business without a means to accept payment from customers and retain its revenue? A US bank account is very important for your US company. This account is yours and operates like any other US-based business account so you do not have to worry about being unduly monitored or regulated.
The only other document you’ll need to set up a bank account is your government-issued ID preferably your international passport. Others like your EIN, Your company formation documents will be provided by Kwanza if you incorporate your company with us.
Final words
Once you complete the process highlighted above, then you are all set to launch your foreign-owned US business from your couch anywhere in the world. The entire process should take a maximum of 60 business days but can be much shorter with Kwanza.
