Incorporation for Non-US Residents - Part 5 of 5 of Incorporating Your Business in the USA

In this 5th and final installment on incorporating your business in the USA, we will look at the specific issues related to incorporation in the US for non-US residents.

The general approach to incorporation is the same for US and non-US residents. However, there are a few issues that you should be aware of so that you can make the best decisions for the purposes of managing your tax situation, moving through the incorporation process smoothly and operating internationally.

Apostille

An apostille is a seal that verifies the authenticity of a document by the issuing authority. Although not required in the US, many countries require that official documents created in another country bear an apostille as evidence of authenticity. You may need to request that your incorporation papers contain the state's apostille. There is often an additional charge for this service.

Selection of Corporate Form

In general, there are no citizenship or residency requirements for forming a company in the US. However, non-US residents are not permitted to establish a Subchapter S corporation; one of the requirements of becoming an S Corporation is that all shareholders must be US residents.

If your company is incorporated in the United States as a C corporation, you must file a US tax return regardless of whether there is US income. On the other hand, if your company is incorporated in the United States as a limited liability company, your LLC is taxed as a partnership and the principals file and pay individual US taxes only if they operate a trade or business in the US or if they have US-source income.

If you anticipate that your company will have a mix of US-generated and outside-US income, it may be preferable to incorporate as an LLC. Mixed income within a C corporation will be taxed in total; mixed income in an LLC will be taxed only on the US income.

In general, non-US residents should select the limited liability form of corporate structure.

Obtaining an EIN Number

To obtain an EIN number you must supply the name, social security number or ITIN (individual taxpayer identification number) and signature of a principal officer. If your corporation has a principal officer who is a U.S. citizen or resident, that officer can use his or her name, social security number and signature to complete the EIN application. If the principal officer does not have a social security number and is not eligible to obtain one, he or she should obtain an ITIN that can be submitted with the EIN request.

Your non-US resident incorporation should proceed smoothly if you pay attention to these few special circumstances.

This is the end of our five part series on incorporating your business in the United States. You should now be able to choose the best corporate structure for your needs, understand the steps involved in incorporation, be able to select the right assistance in executing the incorporation and anticipate the special issues involved in non-US resident incorporations.