So you have your business registered and incorporated in the US, and now you need to handle your finances, clients, taxes, and business laws through official mediums. This means you need to acquire an official identity for your business, which is where an EIN comes in.
For non-US residents, it is best to follow the online application process free of charge to obtain an EIN for their business. All businesses with excise tax liabilities have to have an EIN.
Here is what you need to know about EINs and how to get one for your business.
What Is EIN?
Employer Identification Number (EIN) is an exclusive identifier that identifies each business with the employee as a unique entity. There are 9 digits to an EIN which are used by the Internal Revenue Service (IRS) to identify a company.
EIN is a must for reporting taxes without hassle, opening bank accounts for the business, applying for credits, and preserving limited liability. EIN is also called the federal tax identification number.
The steps towards obtaining an EIN first include authentication of the business, which means that the business has to be legally formed. Secondly, applying to the IRS with all relevant information and finally being listed by the IRS with a valid EIN.
Why a US LLC Owned by a Non-US Resident Need an EIN?
If you have an LLC registered in the U.S. as a non-US citizen, your business needs an EIN. LLCs have excise tax liabilities.
To open financial accounts and hire more employees, foreign-owned LLCs need an EIN. Another necessity is that to keep track of company invoice records, bill payments, collect debts, and pay taxes, all LLCs, in general, need an EIN.
Know more about the purpose of the EIN.
Eligibility for Getting an EIN
As a non-US citizen, you do not need to have a Social Security Number (SSN) to have an EIN. You will, however, need an ITIN to work instead of an SSN.
The owner himself or any other responsible party of the business, given that they manage the finances, can apply on behalf of the company. A responsible party exclusively means a person running the business, not the business entity as a whole.
Learn what are the differences between EIN Vs. SSN.
What Documents Are Required to Apply for an EIN?
Before starting your application process, you need to have all the necessary information sorted out. EINs are provided based on the information submitted in the SS-4 form. The form must include information such as the legal name of the owner, the legal name of the business, and the trade name (if applicable).
The form also demands an address for the business and an SSN or TIN. Other information, such as the business type, employee number, and primary activities, has to be mentioned in the form.
How to Apply for an EIN?
The best options for a non-US citizen to apply for an EIN include online applications, via phone calls, or by fax. For each, the procedure is different.
Applying Via Phone
You can call the IRS on working days (Monday–Friday) at this number: +1 (267) 941-1099. This will connect you to a representative who will guide you through the process. The number is not toll-free. If you need your EIN immediately, this is the fastest method.
Applying Via Mail
Another way is to mail the filled-out SS-4 form to the IRS at their address. We recommend you not do so unless this is the only method for you, as it takes a long time (around 4 weeks) to process applications sent via mail.
Applying Online
By far the easiest option for non-US citizens to get EIN is to apply online. Applying for an EIN online is a simple process and completely free if you are doing it through the IRS webpage. Here is a step-by-step guide to applying for an EIN online:
- Go to the homepage of IRS.gov. Click on ‘File’ then on the ‘Businesses and Self-Employed’ prompt. From there, you will find the EIN option. Click on it.
- Scroll to the middle of the page to find ‘Apply for EIN online’ and click on it. Then, on the next page, click ‘Apply Online Now’, which takes you to the application form.
- Click on ‘Begin Application’ to start filling out the form. This will take you to the first page of your identity. Here, choose the type of your business. (Ex: LLCs, trusts, estates, etc.). If you have chosen an LLC, it will first give you basic information on LLCs on the next page. You will have to enter how many members there are in your LLC and the registered state. Select ‘Continue’ to go forward.
- On the next page, select why your LLC is requesting an EIN.
- Upon clicking Continue, you will find a form to fill out your personal information. On the SSN/TIN box, fill in your TIN number. Continue on and provide other basic pieces of information on addresses.
- Then, on the details page, enter the legal name of your LLC. For locations, choose the state your business is registered in. On the next page, answer whether the given criteria apply to your business or not.
- Be sure to choose ‘Receive letter online’ on the EIN confirmation page. This option allows you to save the application letter immediately. Finally, click continue.
The online application has to be completed in one session. It does not save mid-process applications. You will need to start over if you leave the page inactive for more than 15 minutes. For more expert guidelines and information regarding EIN, LLCs, and running foreign incorporated businesses visit Business Globalizer.
What to Do After Obtaining the EIN?
After you get your EIN from the IRS, the first thing is to get an official business phone number. Also, get an official webpage for your business and purchase the domain for that website.
Banking services are crucial for any business. Running finances through personal accounts isn’t the brightest of ideas for a business. After obtaining your EIN, an official bank account will be created for you. Also, get a merchant account attached to your business, as the financial institutions will judge your credibility as a business on it. Make sure that your EIN information is always kept up-to-date. If there is a change in a responsible party, then you must report it within 60 days. You can report this change on Form 8822-B.
If you have a change in corporate address, you must also report it using Form 8822-B. The EIN that you open up is given to your business for life and is never discontinued. This means that you don’t have to hassle with renewing your EIN.
However, if you close your business, the tax account doesn’t automatically disappear. You have to write to the IRS informing them that you have closed your business and to close your tax account for it. This will save you from non-existent taxation hassles and prevent identity theft.
Final Words
An EIN helps you flourish your business by allowing you to achieve official benefits overseas. Even if you feel like you don’t have to get an EIN, having one will still benefit you. Non-US residents oftentimes get misled into believing that they have to pay to get an EIN, which is not true as you can apply and receive it for free officially from the IRS. If you want long-term growth for your business, getting an EIN is a simple administrative necessity.
