Choosing the USA as the location of your startup might be a great option. While it can be more complicated than other places, there are a lot of perks of doing business in the US. With a large talent pool of highly skilled candidates, favorite tax structures, and more, it’s easy to see why so many UK entrepreneurs choose to start their own startup in the USA.
However, you’ll need to be careful about how you start this process. Creating a business in the USA can be worth it, but it is a lengthy process. Follow this guide below to make sure you’re on the right track to success.
Do You Need to Be a Citizen to Start a Business in the USA?
First, let’s answer one of the most confusing questions. A lot of people don’t realize that you don’t have to be a US citizen or a US resident to start an official business in the United States. In fact, you don’t even need a green card. You just need to understand how the business systems work and which one is right for you.
You’ll need a few things in order to get started regardless of your imigration status:
- Registered agent - If you’re not in the U.S. yourself, you’ll need a registered agent. This is a person or third-party company who has a physical address (not a P.O. Box) during normal business hours.
- Business formation - Whether you choose an LLC or an S-Corp, a corporation, you’ll need to formally register your business in the state you choose.
- US Bank Account
- US Mailing address
- Tax Id Number - A tax code for non-US citizens without a SSN
What Business Type Is Best?
Now that you know a bit of what’s required, let’s talk about the best type of business to form. The type of business you choose will influence your daily operations, taxes, and your own personal risk. If you’re not sure the best type to choose, it’s smart to talk to a lawyer who is familiar with US business entities.
The most common choice is to create an LLC or Limited Liability Company. This type of business will protect your personal assets from any business debts and lawsuits. This is usually the cheapest and simplest structure, and it’s easy to get started no matter your experience level. Explore other types of businesses here.
What State to Choose?
Another big decision is which state to choose for your startup. You’ll need to file your LLC (or other business formation) through the state you choose, so do so carefully. It’s best to look for a state that has no state income tax, if possible. Great options include Wyoming and Florida.
Consider the annual fees for reporting your business entity, tax laws, and privacy. Some states require you to be a US citizen or resident, so check these laws before making your decision.
Consider Health Insurance
If you plan to stay in the US during any period of time when running your business, you need to think about health insurance. The US often gets a bad reputation for it’s complicated, expensive healthcare, but there are options for both residents and visitors alike.
As a business owner, you might also want to consider offering health insurance to your employees. In the US, it’s common for employees to get their coverage their employer. Offering health insurance is an effective way to attract top talent.
Get Your Tax Number
Next, you need to get your tax ID number. This is something required of every business in the US, even for non-citizens. It’s called an Employer Identification Number (EIN). You might also hear it called a tax ID number.
This is the number you’ll use to get a U.S. bank account, start your business, apply for licenses, hire employees, and file taxes. If you have a social security number as a citizen, you can apply for this directly on the IRS’s website. However, if you don’t have a social security number, you’ll need an Individual Tax Identification Number (ITIN) to apply for your EIN.
Start Your Business Today
It’s not as hard as you might think to begin your startup journey in the United States. A bit of preparation will go a long way. While it’s true there are some hoops to jump through, it’s all very doable and you can even accomplish everything on your own.
Starting a business in the United States could be a great idea if you have the drive and patience to do it properly. Follow these tips above to get started.