cultural differences

Starting a Business in the USA: A Guide for Expats

The U.S. is a fantastic place to start a business. A country that is well known for its entrepreneurial spirit, the United States can represent a really rewarding market. Better still, U.S. citizenship is not a prerequisite of starting a business so expats can give it a go without experiencing too much bureaucracy.

Here’s our basic guide to starting a business in the United States.

Visa / Employment Authorization Documentation

In order to start your own business in the USA, you will need some type of employment authorization visa. Foreign nationals who are considering setting up a business in the United States need to decide on the type of visa under which they will enter the US and run their business. There are generally three visas, which of those is the most suitable for you will depend upon your personal situation and the nature of the business you intend operating.

E-1 Visa:

The E-1 treaty trader visa allows nationals of any E-1 treaty nation to enter the U.S. and carry out substantial trade (exchange of goods, services and technology) between the U.S. and an overseas country. The item of trade, and title of that item, must pass from one party to the other in exchange for consideration. Individuals will only be granted access to the E-1 visa if they can demonstrate that there will be “substantial” levels of trade and that more than 50% of the trade involved will be between the U.S. and the applicant’s home country.

Further information and a list of E-1 treaty nations can be found on the Travel.State.Gov website.

E-2 Visa:

The E-2 visa allows expat entrepreneurs from any E-2 treat nation to enter the United States in order to work on a business entity that they have invested in, or are in the process of investing, a large amount of capital. The investment made needs to represent a high proportion of the total value of the business, normally a minimum of 50%.

Further information and a list of E-2 treaty nations can be found on the Travel.State.Gov website.

L-1 Visa:

The L-1 visa, is an intracompany transfer visa that allows foreign nationals to enter the United States in order to open a new office in the U.S. of an existing corporation. The L-1 visa is subject to appropriate premises for the office being secured and the investment of the amount of money that will be needed to operate a business. To qualify for an L-1 visa, the applicant must be an executive, a manager or an employee with specialized knowledge of the company’s business and its products and services, and the employee must have worked for the company overseas for at least one year within the three years immediate to the application. In addition to this, a qualifying relationship (such as parent-subsidiary, branch or affiliate) must exist between the foreign entity and that that will be established in the U.S..

Incorporation

Foreign-owned business entities need to be incorporated at a state level in the United States. To register, the business must have a valid address that is located within the state; no PO Box numbers are permitted. The registered agent that is named on the incorporation can either be the expat business owner themselves, or another person who is permitted to receive legal papers on behalf of the business, e.g. a business secretary or attorney.

The remaining steps are exactly the same for an expat as they would be for a local citizen who wanted to start their own business. A great guide to starting a business in the U.S. can be found on the government-run SBA website: 10 Steps to Starting a Business, which includes information on naming your business, requirement licenses and permits, and tax matters.

Starting an online business

Due to the vast area of the Unites States, online businesses are now extremely popular in the country and many expats opt to start their own businesses in this area. However, it is important that any expats who want to start an online business in the U.S. understand the requirements governing online businesses and are fully aware of the rules and regulations that they must adhere to. If you are considering starting an online business in America, check out the following: 

Importing Goods

Again there are a number of rules and regulations that expats need to be aware of if they are considering importing goods into the United States. The Department of Commerce’s Trade Information Center provides comprehensive information and access to useful resources that can help you to understand the importation procedures and laws. Many expats find that working with a licensed customs broker is extremely useful as they can help you to ensure that you operate within the realms of the law and have the permits that you need.

U.S. Tax information for Expat Businesses in the United States

The U.S. tax code is very complicated and any violation of the rules and regulations is treated extremely seriously. The type of tax you will need to pay will depend upon the state in which your business is based, the nature of the business you conduct and the people you employ. The IRS offers a guide that is specifically aimed at helping International Business owners, but it is always advisable that you consult a registered tax professional. The IRS offers a tax treaty overview and resources here.

For further information about starting a business in the United States, please see the U.S. Small Business Administration Website: www.SBA.gov

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