Companies that wish to have a sales office, staff or any type of business in America, and that are owned by those that are not citizens of the United States, must make a decision. They must either form a corporation or a limited liability company, LLC for short. Multi-cultural businesses may have other issues that other regular US companies do not have to deal with, so they must decide what to do about those.

Every non- US based company will have a vast difference of needs when they do business in the country. Looking over the companyis plans will be an important step in how to proceed, as will whatever legality issues apply. These issues will concern immigration and financial matters.

Determining a United States Course of Action

If a business plans to operate in the United States, they must decide the types of activities that they plan on having. This means that a foreign plan of action needs to be figured out first if operating in the U.S. is a smart idea.

There are many reasons why forming a company in the United States may not be necessary. One reason may be if your company is selling its products over the Internet, or if wholesaling to other U.S. companies is in the plans. This may not be the best idea, though, since many customers in America would rather buy online items from a company here instead of one that is out of the country. It may be a smart decision to start a company in the United States. For those who plan on selling their goods and services here in the United States, a local business should be formed so that if any problems arise, they can be dealt with in the country. The company will be held accountable for any actions in the United States since they are doing business here.

Applicable Tax Rules and Legalities

Currently, there are not any state or national laws that can stop non-citizens of America from forming a business through the American marketplace. There are a couple of ways to form a company if, in fact, a non-US business decides to set up in the US. A limited liability company, or LLC, is one way to set up a business, because there is no limit on how many investors can have stock on the company, where those investors live or their citizenship status. This means that any number of non-US citizens may become members of an LLC.

Business owners of a non-US business need to be aware that businesses that start in America are regulated at the state level, rather than at a federal one; however, an LLC may be created in all 50 states, as well as in the District of Columbia. What state your LLC should be developed in depends on a number of factors, one being whether there is already a physical presence in any state. For example, if a business already has an office in Pittsburgh, starting an LLC in Pennsylvania may be a wise decision. The two most business-friendly states are Delaware and Nevada. If a business does not have a company in America and is only doing business from a location outside of the United States, it may be in their best interest to form the LLC in those two states. You may run a non-US based company in more than one state and form an LLC in any of those states. However, the company must be registered in all of the states that they are doing business in. This is called foreign qualification.

Many companies would still rather put together regular corporations, instead of LLCs. These are called C corporations. More investors may become involved easier by doing this, and there is the possibility that the company may become public in the future. This canit be accomplished if you have an LLC. It is prudent to speak with an attorney who is knowledgeable in laws of the United States and overseas, as laws of each home country can be different in some circumstances. Deciding which entity is best for your company is an important step, one that a lawyer can help you with.

There are stipulations for non-U.S. business owners who create a regular corporation in America. They will not be permitted to ask for an S corporation status, which allows shareholders of the company to claim their personal shares of both money from the company and any expenses on their tax returns personally, and also skirt around corporate level taxation. The tax rules of America specify that any S corporations may not have shareholders that arenit citizens of the United States. Any business in the United States is subject to any and all US taxes, whether they are US based companies or not. LLC companies have to file both federal and state income tax returns. This also applies to the LLC members, although resident status must be determined. Non-residents will be taxed on any income that they make in America, such as any shares of the LLCs income. United States residents automatically get taxed on income that they make both in the US and overseas.

It is important to be aware that those holding a Green card are not limited to a resident status. Those who have a business physical presence in the United States also qualify. For example, if in the year 2006 a person has been in the country for a minimum of 31 days, and they were also in the country at least 183 days for the years 2004, 2005 and 2006, then they will be considered a resident of the United States. However, even if this criterion is met, a person may still be considered a non-resident of the United States under certain circumstances. If a non-US business doesnit perform in the US and does not receive any money from any other American sources, they would not be required to pay into federal income taxes. But, if they keep up the corporation or LLC, then annual state charges and/or fees may still apply to them.

The Role of Immigration Status

Decisions that affect the laws of US immigration are being made all of the time. These can and probably will affect any future business decisions. If the owner of a non-US business wants to work in America, it may be possible for them to get permission to operate in the states. A visa called the H-1B Visa, as well as other types, can give a non-immigrant classification to a non-resident that is employed for a temporary time in the states for a special occupation. Some of these specialty occupations may include, but are not limited to, education services, social and physical sciences, medical and health fields, architecture, and arts and theology occupations. The typical limit for this special brand of visa is six years. Those workers will generally be sponsored by a company or employer who is already a United States business, so it will be required to start a US company in that circumstance. A different type of visa, the L1 Visa, allows an additional year for foreigners to work in the United States.

Is Financing Available to a Non-US Business?

It may be wise to become a US company simply so that you may have easy access to capital. For those in need of a loan for their business, it will be easier to receive one from a US bank than if they try to receive one from a foreign bank. Two years is the time limit for a non-US based company to have the same access to capital as an originally-based company does.

Other Circumstances to Think About

It may be a wise decision to form a US based company for a couple of reasons. First, American companies hold much more respect and credibility than their foreign counterparts. Also, any business that operates in the United States can be sued in the courts of America, just like any other US based company.

For more information on forming a corporation or LLC for your business or for complete details on other helpful business and personal legal services, please do not hesitate to email us at info@adanaslaw.com, call us toll-free at 877-420-4600, or contact us online. Be sure to request your FREE Informative Newsletter and Business Start Up Check List!