As a non US resident residing outside of the US you face some difficulties when setting up your US entity. You have no social security, you have no US address, you are physically out of the country and you probably have little understanding and experience of the United States legal and tax system.
So, unlike a US resident or citizen, your incorporation process is more complex and you must make sure you consider all the different services you will require if you want to do it right Ki Residences.
This is really the basic. Here you will retain a firm to prepare and file on your behalf the various US business formation documents with the Delaware Secretary of State. It is important to choose an experienced firm that will help you to draft the documents in a way that not only complies with all state requirements but also supports your future US operation (and hopefully growth). You also need to verify that the incorporation company you go with offers you the option of filing the incorporation documents using the state Expedite service which allows for a 24 hours turnaround time. Cost for this service ranges from $300 to $500.
Employer ID Number
Once your Delaware Company has been formed, it must obtain Employer ID number from the Internal Revenue Service (the IRS). This number is also known as the Company’s tax ID number. Normally this should only be a technical procedure, filling out forms and approving the application by the IRS EIN department. However, one of the requirements set up by the IRS for the EIN is to list on the application the Company Officer’s US Social Security Number. This is where the process gets complicated, because you as a non US resident do not possess such a number. Only a knowledge and experienced firm will be able to overcome that issue (lawfully of course) and obtain the Employer ID number for your US Company even when the officer does not have a US Social Security number. Cost for this service ranges from $100 to $200.
Resident agent, US Address and Mail Forwarding
The next service to consider is your US address for various purposes. First there is the resident agent. This service is mandatory as Delaware Secretary of State demand from each Delaware Company to have a local person (could be a Delaware Resident or a Delaware Business) act as the Delaware Company agent for accepting process of service. This person must be approved by the State to provide that service. You must make sure, that your US incorporation firm offers you that feature; otherwise you will not be able to complete your Delaware company formation. In addition to the resident agent, you also need to consider having a commercial address, one that you will use with customers, vendors, banks and other parties. This will be the Company US address and it should be an address that offers easy access and the ability to accept mail and packages on a regular basis. You also need to verify that with your US address, comes another feature, Mail Forwarding. This service allows you to receive an email each time a piece of mail came for your company and for that mail to be shipped to your foreign address upon your request. Cost for this service ranges from $300 to $500.
Bank Account and Merchant Account
Most non US residents choose not only to set up a US company but also use it to actually do business with US customers. Often they want to open a business bank account and Merchant account (this account allows the company to accept customer credit cards as payment) for their US Company instead of banking through their foreign business account. The fact that as a non US resident you are staying out of the US really makes things difficult when it comes to opening bank and merchant account. There are thousands of US Banks with various policies and procedures. Some allow for remote account opening and some mandate that the account will be open in person at the bank, some require various proofs of your residency and nationality and some require bank reference letter and other documents evidencing business history. It is very important that your US incorporation firm understand your unique situation and has the ability to introduce you to banks that match your requirements and to work with you until you get approved by a US bank and Merchant Account Provider. Cost for this service ranges from $400 to $900.
Although setting up a Delaware Company for a non US resident is not an easy task, it is certainly doable with the right incorporation firm. Choose your US business formation firm wisely based on all the topics addressed in this article to assure you start your US business journey in the right way.
About Arik Rozen, CPA
Mr. Rozen is a certified Public Accountant; holds a BA in accounting and M.B.A. (majored in Finance). Mr. Rozen has 20 years of experience in tax, public accounting and financial management, many of them specializing in US taxation and incorporation for non Resident. In the past few years Mr. Rozen has assisted hundreds of clients to file incorporate in the US and file their U.S. tax returns.
About Tax Usa, Inc.
Tax Usa Inc’s services are specially designed for non-US Residents. Our expertise, years of experience in the U.S. incorporation market and knowledge of the U.S. tax code allows us to better understand the needs of foreign business owners to expand their operation into the United States. We serve as one-stop-shop incorporation and taxation firm and offer wide range of services starting with Business incorporation for non-U.S.-resident in all 50 U.S. states and ending with introducing our clients to a network of bank contacts specializing in banking for foreign person operating a U.S. business.