Are you new to the U.S.? Are you wondering, “Can an immigrant start a business in the U.S.?” If so, I can answer your question. Both me and my legal colleagues can assist you in your business goals.
You can begin a business in the U.S., even if you come from another country.
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Can an Immigrant Start a Business in the U.S. Who Is Not Documented?
Some clients may pose the question, “Can an immigrant start a business in the U.S. who does not have an immigrant status, or who is undocumented?” While this may sound tricky to do, it really is not. Even an undocumented immigrant can own a business in the U.S.
While no definitive numbers have been reported, immigration researchers estimate that hundreds of thousands of businesses in the U.S. are run by undocumented immigrants. That is because no laws exist in the U.S. that keep an immigrant, who does not have a legal immigration status, from starting a business.
Some undocumented workers find working as an independent contractor or becoming a business owner the easiest way to make money in the U.S. legally. Therefore, many undocumented immigrants choose to establish a limited liability company, as doing so does not require proof of their immigration status.
Setting up an LLC is far easier than incorporation, and does not take a great amount of time to do. While you do need legal assistance, registering an LLC can be done, provided the immigrant owner pays the taxes and fees.
In turn, an immigrant can run the LLC under the name of the entity versus his or her name. An owner of an LLC is required to pay all taxes and comply with any required inspections.
Also, an undocumented immigrant does not have to provide legal proof of his or her immigration status to obtain an Individual Taxpayer Identification Number, or ITIN. This number can be compared to a Social Security Number (SSN) that is used to file personal taxes by a U.S. resident.
An immigrant only needs to provide a birth certificate and official I.D. from his or her country of origin. With an ITIN, an immigrant can apply for an Employer Identification Number or EIN.
This business I.D. is used to identify the responsible party who is paying taxes on behalf of a company. While the ITIN can be used for personal taxes, the EIN is used for the purpose of business tax filings.
From the standpoint of the Internal Revenue Service (IRS) in the U.S., an immigrant, when he or she receives an EIN, is the owner of a legal business in the U.S. Therefore, he or she can even employ U.S. citizens to work for the business.
However, an immigrant that does not possess legal status will not qualify for financial aid, which prevents him or her from attending a school to receive training or more education to run their company.
Also, in some industries, such as construction, an undocumented immigrant may not be able to get the needed licenses and permits. However, if you are a documented immigrant, you will find that starting and opening a business to be a clear-cut process – one that is very similar to owning a company as a U.S. resident.
It Is Better to Have Legal Status
The above example of being undocumented is meant to demonstrate that the U.S. provides ample opportunities for starting a business to its residents as well as immigrants, documented or not.
However, from a legal and business viewpoint, I would recommend that you follow the proper channels for immigrating to the U.S. That way, I can help you with each step of the business formation process. I can also coach you on what papers to submit and the best locations for forming LLC.
Usually, it is best to form an LLC (one of the easiest ways to begin a start-up) by establishing it in the primary locale where you plan to do business. For example, if you want to start a business in California, it is best to file your business registration in California or incorporate in the state.
Mollaei Legal Tip
If necessary, you may also consider registering an LLC in Delaware. That is because Delaware does not require a bank account or local address to register.
Therefore, you might want to consider this state for incorporation or to set up an LLC, especially if you have not yet opened a business bank account or you have not yet established an address.
How Can an Immigrant Start a Business in the U.S. Who Has Just Arrived?
If you have gone through the proper immigration channels, you may still ask, “How can an immigrant start a business in the U.S. who has just arrived?”
To start your business, you need to retain legal counsel first. Therefore, you can learn all the steps for legally starting a business by contacting me first.
Simply email email@example.com about the details.
As already indicated, an immigrant business owner does not need to be a resident to open a U.S. business and file taxes. When setting up a business, you will need to select a company structure first.
Most immigrant business owners will choose to establish a C Corporation or a limited liability company (LLC).
While you are subject to double taxation when forming a C Corporation, you also have more opportunities for obtaining venture capital. Should you elect to set up an LLC, you will protect yourself from personal liability.
In other words, nobody can sue your business and come after your personal assets, such as your home or car. An LLC makes this distinction. Also, you can enjoy pass-through taxation.
The taxes you pay will pass to you personally. Therefore, you only pay taxes on the income you earn. The business is not subject to taxation.
If you choose to incorporate, you may include U.S. investors in your corporate set-up or establish a limited partnership. Whether you incorporate or establish an LLC, you will need to obtain the services of a registered agent.
This person or service organization will process and receive information for you company during regular business hours during the week. The registered agent’s address must be located in the state where you set up your business. You cannot use the registered agent’s address as your company’s address.
Besides filling out the appropriate documentation for incorporation or LLC registration, you will also need to obtain an employer identification number (EIN). This number is a business tax I.D. number you use to identify your business for tax purposes.
Can an Immigrant Start a Business in the U.S. and Receive Instant Work Privileges?
If you have asked the question, “Can an immigrant start a business in the U.S. and work in the U.S.?” the answer is “no.”
While a non-permanent resident can start and manage U.S. business, he or she cannot assume the role of a director or corporate officer of their start-up business.
Also, an immigrant cannot receive a salary in the U.S. or work unless they get a work permit. Therefore, to work in the U.S. and own a business as well, you need to apply for a green card or special visa.
A green card gives you permanent resident status. While an immigrant can earn profits from their business and pay taxes, they cannot take on the status of employee without a green card and work permit.
To receive compensation for the profits earned from a U.S.-based company, you need to receive earnings from a branch of your U.S. company, which is located in your country of origin. Therefore, if you want to set up a business in the U.S., you can do so.
You just need to make sure you have enough money to live or support yourself and your family until can become a citizen.
What To Do Next
You may still want to ask, “How can an immigrant start a business in the U.S successfully?” To answer this question, you must know who to partner with in the legal and business community. I can help you sift through the paperwork and legal jargon.
Questions to Ask
Before you start a business, ask the following:
- What type of entity should I set up (C corporation, limited liability company (LLC), or limited partnership)?
- Where should I establish my business?
- What licenses will I need?
- What fees and taxes do I have to pay?
- What are my staffing needs?
- How much inventory will I carry?
- Who should I contact for legal guidance and help?
That last question is easy to answer. To retain legal services and answer all of the above questions, contact me today. Email firstname.lastname@example.org.
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