Today, we live in a global world. Unsurprisingly, a resident from one country can do business in another. Many multinational companies run their businesses in multiple countries. And the USA is one of the top destinations to start an online business from another country. Why?
It has a consistently strong economy and offers many financial opportunities to business owners. Additionally, it allows companies to do business entirely online. Yes, that’s right. You don’t need to visit the local government or get a physical office to run a successful business in the country. Moreover, you don’t have to jump literal hoops to complete the US business registration.
Like starting a business in any country, you must complete some formalities to start your online company. Though, they are comparatively less cumbersome and more time-efficient.
Read on to get more details on how to start a business in the USA online from other countries.
How Does Starting a Company in the US for Non-Citizens Work?
Wondering how to register an eCommerce business in the USA? Don’t worry. The US business environment is quite friendly to foreign firms. As a foreign entity, you have two business structures to choose from in the US:
C Corporation, or
The Limited Liability Company (LLC).
A C Corp allows you to raise capital and have unlimited stakeholders or owners in the company. It also allows you to transfer your company’s ownership. Another advantage of forming a C Corp organization is its ability to shield them from close IRS involvement. However, it also comes up with the double tax. You can avoid financial losses through careful tax planning.
At the same time, LLC offers limited liability. It protects the members from taking liability for business decisions or actions. Also, their assets are safe even if the business sustains losses, incurs debts, or gets sued. In an LLC business structure, you are free from strict record keeping, which is compulsory in C Corporation.
Both have their advantages and some drawbacks. You can choose the business structure that best suits your needs before your eCommerce business registration.
Steps to Start Running Your New Business in the US
The USA is a lucrative place to establish your business, as it offers many opportunities and options. It would not be wrong to say that the American dream is not only for US citizens or migrants. Anyone from a distant land can reach it. But yes, there are a few steps that a foreigner starting a business in the USA should follow.
After selecting the business entity type, below are the steps you can follow to start your business in America.
1. Appoint a Registered Agent
Hiring a registered agent can help if you wish to start a business in the USA online but don’t know how to work around it. An agent or equivalent company can handle everything from paperwork to answering crucial emails. They can assist you with state-related tax policies and other essential regulations.
Not only that, you can get their help to renew your license and meet all the prerequisites of operating a business in a foreign land. Make sure to hire a registered agent from the same state as your registered LLC or company. In short, they can cut the red tape and ease the process.
2. Getting an EIN for Your Company
To start your business in the US, you should have an employer identification number (EIN). The EIN allows the Internal Revenue Service to track all the firms in the country. To get an EIN, you need a social security number if you reside in the USA.
However, as you’re a foreigner and desire to run a business in the United States, you can use a business ITIN (Individual Taxpayer Identification Number). You can’t open a US bank account unless you have either of these registered numbers.
3. Opening a Business Bank Account
You must open a local bank account to run your business in the United States. In general, you may be required to submit the following documents:
Company’s official papers and permits, including the official US business address
Business ITIN and EINs
Passport
You can find many options to choose from when opening a bank account. However, it’s worth doing some research before getting one. You can choose the best option based on your needs.
Keep in mind that some bank account services are cheaper than others. Others may offer a variety of banking services specially tailored for foreign nationals operating businesses on American soil.
However, hiring a service to set up an account is a wise choice for online businesses. That’s where the Neobanks come into the picture.
4. Searching the Best Neobank
Neobank is a fintech business that offers apps, software, and other tech services to help you align mobile and online banking via a single platform. Neobanks are online-only banks that provide checking and savings accounts via apps or websites.
Since they don’t have physical branches, all transactions and banking services are processed online. They are the best solution to opening a US bank account after you register a business in the USA.
Compared to traditional banking services, Neobanks has many benefits for online customers.
It offers the convenience of services anytime and anywhere. It’s a huge advantage for customers willing to do all their transactions and paperwork online.
They offer services at lower rates as their operating costs are low compared to brick-and-mortar banks.
Unlike traditional banks, Neobanks isn’t besieged with strict federal or state regulations.
They are more streamlined in delivering mobile and online services to their customers.
Apart from the above benefits, Neobanks offers all the other regular services traditional banks provide. Setting up a Neobank account is a lot easier if you’re tech-savvy. You only need to open an account and download the Neobanks app.
Additionally, you won’t be required to submit documents in person. You can link your business bank account to the Neobank account and start running your online business in the States.
5. Managing International Business Payments
Companies with an overseas client base require a system to receive international payments. For apparent reasons, receiving payments from international clients is more complex than getting paid within the country. However, it should not stop you from opening a business in the USA. Communication issues, legal snags, and fluctuating exchange rates are some of the reasons that complicate the process. These problems can lead to losses and increase the risks of online business. You can adopt a few approaches to address these issues and make your business run.
6. Negotiate Payment Terms Cautiously
You may want to minimize the risks involved with payments in the future. Who doesn’t? For that, try to negotiate the arrangement type that is best for your company. Many payment laws differ for all your international transactions, so be prepared for them. Pay due diligence to the payment options you can use for international payments.
7. Manage Currency Rates
Fluctuations are pretty standard when it comes to currency exchange rates. The current dollar value puts a cap on your budget when dealing with distributors and suppliers while making and receiving client payments.
You can talk to your bank or foreign exchange services provider to allow pre-purchasing or pre-booking of currency at a better rate. You can also go for the currency forward contract. It will enable the buyer to lock in the price of the currency they pay.
8. Consider Obtaining Trade Credit Insurance
Another wise step to lower the payment risks is to insure the company against nonpayment issues. It will secure your company from the cash crunch. Try to figure out what type of insurance gives your company maximum protection. Or if you need insurance that is government-supported or commercially available.
9. Get Professional Help
Business filing services, accountants, and attorneys come in handy when opening an online business in another country. Since the financial laws and rules often change, taking an expert opinion and help is only sensible. They can help you with legal matters, finances, and overseas operations.
However, if you’re comfortable spending time and putting in more effort, you can go solo on the overseas business journey. But having a helping hand is always a plus.
Get Ready to Start Your Online Business
Now that you know the ins and outs of running your business in the US online, there’s no reason to keep waiting. Set up your company and get ready to do business online. Setting up a new company might seem like a colossal task. But it isn’t if you know what you need to do.
You might need to do enough research before starting a new business. However, wasting months isn’t worthwhile once you know what you want to sell and select a business model. Time is precious, and the process of starting a new business is swift.
Start your online company, and you will begin minting money in no time. Join the club of companies operating successful businesses in America and bear the fruit of it.
