CAN FOREIGNERS OPEN A BUSINESS IN THE U.S.?
by Contributor
(Sep. 15, 2020) — The U.S. might be going through its share of political and civil unrest, but it remains a viable option for foreign investors. Here’s what to know.
Despite the controversies the U.S. is currently facing, many business owners from abroad still find the American market an attractive one. The good news is that the U.S. market is just as open to foreign investors as other countries are. The bad news is that they’re stricter when it comes to their rules and regulations about foreigners starting a business in the U.S.
Here we address some of the most common questions you might have about setting up shop in the U.S. if you’re a non-resident.
Should I hire a lawyer?
Yes, you might want to employ the services of two lawyers. A business lawyer would be able to help you navigate the ins and outs of registering your business on U.S. soil. Meanwhile, an immigration lawyer can give you legal advice about residency, local and foreign employment, and work visas. Some lawyers combine these two expertise in one firm to make it easier for business owners such as yourself.
Do I need to incorporate?
You would most likely need to, but that would also depend on which state you plan to operate your business from and what kind of business entity you’d be opening. Some companies are considered “sensitive” by the U.S. federal government; thus, foreign ownership of these types is restricted. Some examples include broadcast corporations, airlines and shipping companies, and banking and insurance.
Foreign business owners commonly start “C Corporations” or Limited Liability Companies (LLC). These two are highly attractive structures for foreigners because of the ease of taxation.
Where should I register or incorporate my business?
In general, you need to register or incorporate your business in the state where you plan to conduct your business. That is so because each of the 50 states has its laws regarding incorporations. It is also possible for a company to have its primary office in one state while incorporating it in another. Talk to your lawyers about your options. You might also want to consider the following when you consult with them:
- Which states are more foreign-investor friendly?
- Which states are more tax- or business-costs friendly?
Some states are also more e-commerce friendly than others if your business is mostly conducted online.
What type of visa do I need to operate my business in the U.S.?
The good news is that you don’t need one to open up a business. You can set it all up while you’re in another country! However, you won’t be able to work in your own company if you don’t have a work visa. Ask your immigration lawyer about the L-1 intra-company transferee visa and see if you are qualified for it.
Currently, U.S. immigration laws state that a person is eligible for this type of visa if they fit the following criteria:
- The U.S. company you are establishing is a parent company, a subsidiary, or an affiliate of the foreign company.
- The L-1 visa applicant should have been employed with the company for at least one year in a managerial or executive position in the last three years.
- The applicant should be arriving in the U.S. in the same capacity or as someone with specialized knowledge.
- You must have a physical office for your U.S. company.
- You must have sufficient funds as capital for your U.S. company.
Being granted the L-1 visa would also mean that you could potentially get a Green Card in as little as two years under the EB-1 category.
The U.S. remains a viable option for most foreign business owners. It will not only help you gain better revenue, but it would also boost your credibility as an entrepreneur if you could start a successful venture in America, despite being a foreign national.