Many US non-residents are forming companies in the United States, some of which are operating within the country, others of which are operating entirely outside. With the proliferation of the Internet, many non-US citizens are forming US companies to own their web sites even though they have no tangible connection with the US other than the registration of their company.
In general, there are no citizenship or residency requirements to forming a company in the US. However. there are several factors that should be considered.
NOTE: Most states will not require disclosure of Director information at the time of formation but almost all will ask for this information at the time of filing the next year's Annual Report. Please ask about our Nominee Services if appropriate.
For many people, passthrough taxation, or the ability to have their entity treated as a non-tax-paying (transparent) entity is important. For US non-residents, use of an S Corporation is not possible because one of the requirements of becoming an S Corporation is that all shareholders must be US residents. This objective can be achieved by forming a Limited Liability Company (LLC) instead of a corporation.
TAXED AS PARTNERSHIP OR CORPORATION:
The LLC can, with the filing of it's Application for Employer Identification Number (TaxID), elect to be taxed as either a partnership or a corporation. This election, with certain restraints, may be changed in subsequent years.
FILING A US RETURN:
For a corporation formed in the US, there is an absolute requirement that it file a US tax return regardless of whether there is US income. In contrast, the LLC is taxed as a partnership and the partners (principals) must file and pay individual US taxes only if they operate a trade or business in the US or if they have US-source (effectively-connected) income.
MIXED US AND NON-US SOURCE INCOME:
In this situation, it will usually also be more advantageous to form a Limited Liability Company instead of a corporation. With a US corporation, it is taxable on its global income whereas the LLC will be taxed as discussed above.
An Apostille is a seal legalizing a public document for use in international transactions according to the Hague convention. Many countries will require that official documents created in another country bear an Apostille as evidence that they are what they purport to be.
WHERE TO FORM YOUR COMPANY:
In the US, you can create your company in any state you choose. If you plan to eventually have an office in the US, it may be cost-effective to form your company in that state. The majority of US non-residents without a strong reason to form in any given jurisdiction choose Delaware or Nevada because of their business-friendly environment and easy compliance requirements.
WHAT'S MY ADDRESS?
Every state will require a Registered Agent/Registered Office with an address in that state for receipt of service of process or other official communications. We will serve as your Registered Agent / Registered Office. However, this is not your business address or mailing address which can generally be anywhere you wish. Please remember NOT to use your RA/RO address for anything other than official purposes as described above.
In many cases, you may have other factors which will strongly compel the choice of a corporation instead of a Limited Liability Company in your choice of structure. For example, you may want to unequivocally establish tax residency in the US. Or you may be planning to sell stock to investors or eventually plan for an Initial Public Offering (IPO.)
Call us today at 1.888.664.6263 and speak
with one of our Corporate Specialists!