USA is the land of opportunities when is comes to jobs. But very less people know that its also a land of business startups. Any on from almost all nations can start any business in USA with ease.Here we discuss step by step process how to start business in USA along with technical and process details “How to start business in the USA”
To setup a small business in US, first we need to understand the process and its different levels. Lets first have an overview of the process and then will move on to the detailed procedure. For the legal setup, you need to finalize the company-name and prepare all the required documents. You need to take a virtual address for receiving emails and a bank account. Once you are done with documents, then the process starts with document filing and you will get incorporation certificate once filing is done successfully. Then you need to apply for employer identification number(EIN). Once EIN is received, you are now allowed to open a bank account( opening a bank account, involves different types of methods as discussed below). Bank verifies documents, business model and opens an account for all your business transactions. You can also have US mobile number and can also apply for payment gateway. Then you can start receiving / sending payments from clients and promoters.Lets discuss How to start business in the USA
Now lets see the detailed procedure to setup business in the USA
FIND A REGISTERED AGENT:
Registered agent is an individual or organization who is present in your state of formation of business. He is the legal authority to receive documents of your business and do first level of verification. The registered agent should be in the state where your business is going to be registered along with a physical address.
SETUP OF LLC:
At first you need to decide one of the states in USA to set up your business. In USA there are two types of business streams, 1. limited liable company(LLC) 2. Corporation. The difference between these two is the amount of tax to be paid and the type of employee benefits to be provided. In LLC there is no limit on number of owners of the business and the tax to be paid is shared among the investors and need to be paid only once in a financial year. In C corporation this subjects to double taxation, in S corporation ( is only for US citizens) there is no double taxation. So non residents would prefer LLC to corporation. One more reason to choose LLC is that it provides personal liability protection which means owners or members of LLC personally not responsible for any business debts .
If we think of the state for setting up of business, it is recommended as Delaware. It seems to be best suited for LLC as its called as a business friendly state. This would be a best state because there is no need to have a physical address in Delaware and also no need to have a bank account in Delaware itself. After setting up your business,if you have any issues and go to court to settle those disputes, Delaware’s court is the best as it uses judges who are well-trained experts than other regular juries. Also Delaware dont need officers names to be listed and also the filing fee is cheaper than any other state. If you need to setup your business in more than one state you need to register in other states as a foreign corporation. Incorporation time differs among states and this purely depends on workload on state office. Thus you are now ready to go with LLC and a virtual address in Delaware.
EMPLOYER IDENTIFICATION NUMBER (EIN):
This is also called as tax identification number. It is issued by internal revenue service(IRS) of US. EIN is for legal business activities in US. To get a EIN number consult a business lawyer or a third-party. He will fill your application and will contact IRS. He/she will then receive your EIN number.
USA MAILING ADDRESS:
You need to have a mailing address to receive business emails. For this there are several mail service and forwarding providers like virtual post mail. They would take care of your mails and will send you emails. Before operating your account, you need to submit a notary form #1583 from United States Postal Services to authorize virtual post mails on your behalf.
US BUSINESS BANK ACCOUNT:
This process is the key and bit tedious process and have several routes for different scenarios. The Patriot act made this bit difficult for non residents to open an account.
According to this act,the identity of the person is verified and that person should pass all the anti money laundering and anti terrorist checks. This act also specifies that a person from Iran, Iraq, Pakistan, Afghanistan,North Korea, Sudan, Burma, Liberia, Zimbabwe are not allowed to open an account in US.
For opening an account you need to have the incorporation documents, EIN and two photo identity proofs.
We have four alternative methods to open an US account.The basic method is the first method
The first method is to find an US bank with a location in your country that will allow you to open an account. Open an account in US dollar as money type in your country. Firstly we need to talk to the bank in US, then ask for the local branch if they would work on your behalf or not. If yes then take their contact information and ask the main branch to contact them. Go to local branch and tell them that you are opening a bank account in US , they only need to verify your license and passport. If this fails, go to method 2
In this method book a ticket to US to open a bank account. You don’t necessarily go to the same state where you want to setup your business. You can choose any state in US. All you need is the incorporation certificates, EIN and valid photo id proofs. If you could not go to US to open an account, here is another method for you
In this method you need a company to help you opening an account on your behalf. There are few companies which will help people to open corporate bank accounts in US. For this you need to provide bank specified resolution. These companies have every right to reject you if your company is not real ( generally not rejected as the company would be real for any business). So make sure to provide documents to prove that the company is real.
Silicon Valley Bank
) is the option for foreign entrepreneur to open an account in US. It works with technology companies that are raising venture capital funds. But SVB would not provide banking services to companies which are out of scope of their requirement.So care should be taken that you are not accounted to the fraud. If you want any other method to open an account other than these go for method 4
The last option is to form an US subsidiary which will make opening of account easy. After creating this,take the documents to the bank and now you are ready to open an account in the home country bank. For this certain documents are necessary. They are- proofs of formation of LLC, certificates of authentication which is an agreement between your home country bank and US branch.
PayPal and Authorize .net are popular account providers.You can compare the fee and services and can go to the desired one.They will provide a merchant account, payment gateway, a pcl complaint valut.Then apply for a MasterCard through silicon valley bank. This is secured with money market account.
USA PHONE NUMBER:
The best option for this is to get a google voice number for free and a Skype number .For a Skype number charges may be applicable yearly basis.
PAVEMENT OF TAXES:
You will have a bank account with offices in both US and in your hometown .You will be taxed in US only based on Source income.However if you are a resident of US taxation depends on your worldwide income.As a non-resident US,your LLC
will only be taxed to 30 percentage.This percentage goes to IRS.Taxes are paid on yearly basics and you can file your taxes on form 1049-NR. To check the correct taxation to your LLC ,you need to designate a tax holding agent.He will take care of the amount of tax being paid by LLC to IRS
There are some miscellaneous processes also involved while starting up your own business in USA. There can be an additional training to be completed by the person who is opening a business and some times there can be a multi level of exams needs to be cleared with flying colors for getting a “go ahead” from the government ( don’t worry these exams are easy to crack if you know what your business is). If you are going for a franchisee business then origin company will provide the infrastructure and staff training. The necessary equipment handling training is given by the origin company only in this case you need to acquired a state to handle your business on your self and one exam to prove that you are ok to start now. Now you are good to go and kick-start day one of your business. Government of USA is very friendly and provides support for any smaller issues with your businesses either directly or indirectly.