Setting up a Foreign Business in the United States

Depending on your business goals, you may choose to form your company in the United States. For example, while your company may be incorporated in your home country, you will want to form in the U.S. as well to attract American investors. One of the first decisions an attorney can help you make is what form to choose. Most foreign businesses choose to form as LLCs or incorporate as C-Corps. Non-U.S. citizens may not purchase shares in S-Corps as their business income is reported on personal U.S. income tax returns, making other forms preferable for foreign founders.

You will also need to choose in what state you would like to form your company. Formation takes place at the state level and legal requirements vary across states. You will furthermore need to register your business in each state in which you operate through a process called foreign qualification. However, if you do not have a physical presence in the U.S., you may simply choose to form in Delaware. An attorney can guide you in selecting the best state and form for your business, as well as help you structure your U.S. operations to be the parent company of an overseas entity if desired.

You will also want to ensure that your intellectual property is protected in the U.S. While your intellectual property may already have formal protection in your home country, you will still need to register it in the U.S. An attorney can help you identify what intellectual property can be protected and how best to do so. Working with an attorney to apply for a trademark, copyright or patent as well as establish trade secret protections will give your company a strong strategic advantage and help you capitalize on your brand recognition in the U.S.

Your company will likely need to adapt the contracts and agreements you previously used for every aspect of your business to the U.S. legal framework. Strong contracts that are clearly understood by both parties can help you avoid costly litigation and will support your company’s successful expansion into the U.S.

If you are planning on working in the U.S. for your company as a foreigner, you will need to ensure that you have applied for the appropriate visas. As a foreign founder in particular, the visas best-suited to your needs may be the E1 Treaty Trader Visa and the E2 Treaty Investor Visa. An immigration attorney can help you decide which visa is most appropriate for your situation, and assist you throughout the application process.

The U.S. Internal Revenue Service (IRS) will tax you on any income sourced in the U.S. If your business has incorporated in the United States, you will be required to pay an annual fee to the state in which you are formed. You will furthermore need an Individual Taxpayer Identification Number (ITIN). This is a processing number for individuals who are required to pay American taxes but are not eligible for a U.S. Social Security Number (SSN). An American tax attorney can help you navigate all the complicated legal paperwork to ensure you do not make any costly errors.