Business Registration in the USA
Why Register a Company in the USA?
- The USA is consistently ranked in the top 10 in the Ease of Doing Business ranking. It has a regulatory environment particularly conducive to starting and operating a business.
- The USA has more than 60 double taxation avoidance agreements with most of the prominent countries of the world, thus relieving the tax burden on countries dealing abroad.
- The USA abounds in natural resources, including oil and natural gas, and is also the leading electricity producer in the world. A company here can get the best of facilities in terms of industrial power and raw materials.
- The USA is rated high on Human Development Index, with the average person enjoying a decent standard of living with opportunities to grow and progress.
- The financial sector in the USA is highly developed, with the world’s deepest and most liquid capital market.
How to Register a Company in the USA
Depending on the kind of business activity your company would be carrying out and the US state in which you wish to establish your company, the process could vary a bit. However, the general procedure is more or less similar.
1. Choose a Business Structure
Decide upon a business structure for your company, based on the type of activity it would be carrying out. Generally, it is recommended that foreigners go with a limited liability company (LLC) and US residents with an S-Corporation.
2. Choose a State
Choose a state to incorporate your company in. If you know the state you would be operating out of, it is ideal for you to file your company in that state, for simplifying paperwork. If you don’t plan to have a physical presence in America, then you can file your company in any state. Many foreigners prefer to set up their business in Nevada, Delaware or Wyoming, as they are the most business-friendly and have the lowest corporate tax rates.
3. Apply for Business Name Registration
If you are not a sole proprietor running your business in your name, you need to register a trade name for your company with the US Company Register. You need to keep in mind factors pertaining to intellectual property like US trademark infringement clauses, copyright laws, etc. during business name registration for your company.
4. Appoint a Registered Agent
Designate a registered agent in the chosen state, to handle legal paperwork on your behalf. The registered agent is officially recognized by the state where your business resides, and is authorized by your company to accept services of process on your behalf.
5. Register Your Business with the Internal Revenue Service and the State Revenue Office
In the United States, the Internal Revenue Service (IRS) keeps track of a business through its Employer Identification Number (EIN). To obtain an EIN, you need a social security number. If you are a foreign business owner and don’t have a social security number, and are not eligible to get one, you can use an Individual Taxpayer Identification Number (ITIN) for the same. The EIN enables you to open bank accounts, pay taxes and hire employees.
6. Get the Required Licenses and Permits
To operate legally in the US, you’d need certain licenses and permits, depending on the type of your company and the business activity it carries out. For instance, companies in the healthcare, dentistry or architecture sectors require a professional license to operate, and those in BFSI or aviation require special permission.
7. Open a US Corporate Bank Account
Finally, get a corporate bank account opened for your company in a bank of your choice. For this, you would need:
- Company incorporation proof
- Your EIN or ITIN
- Your passport
Documents Required for Company Registration in the US
- Memorandum and Articles of Association (MAA) of the company
- Certificate of Incorporation
- Share certificate
- Bylaws of the company
- Board approval of organizational resolutions
- IRS Form SS-4: Application for EIN