HOW TO START A BUSINESS IN THE U.S.

Starting a business in the U.S. is fairly simple, as you will not face the bureaucracy people face in many other countries. Basically, the steps are:

Name and Registration

1. Choose a name for your company – the name must be unique so as not to confuse the public; the Secretary of State of the state you are registering with, will verify and approve the name you have chosen;

2. Request registration with the State– this can normally be accomplished overnight in most states

3. Request registration with the I.R.S. - this can be accomplished in 5 minutes, over the internet, once you have confirmation the company registration has been accepted.

You can form a corporation, a limited liability company, a sole proprietorship. Your tax advisor can advise you as to the best business entity for you. Ok, the company is registered and has a Federal Employer Identification Number (FEIN). Now what?

4. Request your state’s Sales Tax registration, or Sales Tax exemption certificate, if you are not going to be a retailer or are otherwise exempt from collecting sales taxes on your sales (many service rendering businesses are exempt, and so are wholesalers and exporters)

Licenses

5. Request an Occupational License for the place in which you are going to operate the business – many cities require occupational licenses even if you are going to start running your business from a home office.

Bank Account

6. Go to the bank of your choice and open a bank account for your company – remember to keep your personal expenses separate from the company’s, this is the most common mistake of new business owners – don’t pay for your weekly groceries with a company check, don’t buy a new bike for your kid with it. Check with your tax advisor on which expenses can be charged to the business and which you must pay from your private bank account.

7. Check with your city if you need any special licenses to conduct the business activities you are planning to; for example, if you are starting a home remodeling business, you may need a contractor’s license and you may also need proof of general liability and worker’s compensation insurance.

OK, you are ready to start making money! Remember, keep an accurate track of your income and expenses, and have a Certified Public Accountant (a CPA) advise you on monthly, quarterly and annual reports to be filed with the City, County, State and Federal governments.

Visa Requirements for Foreigners

What if you are not a resident of the U.S.? There are many ways in which a foreign entrepreneur can start a business in the U.S.

If you are not planning to live in the U.S., but will only come in as needed to supervise the operation, you can just incorporate the business as per the above description, and come in on a business visitor’s visa (B-1)  or visa waiver (VW1) periodically as needed to visit your business, hold meetings, close contracts, etc. At the airport, just state the reason for your visit and the time you need to accomplish your business dealings. You can come into the U.S. as much as needed, as long as you remain living abroad, and do not spend more time in the U.S. than abroad annually, on average.

If you would like to stay in the U.S. to supervise your business yourself, you will need a work or investment visa to do so. There are many types of visas you can consider:

Visa Types

The L-1A visa: Allows entrepreneurs, executives and managers who already work for a business abroad, to be transferred or transfer themselves to the U.S. to oversee the operations of a subsidiary or affiliate.

The L-1B visa: Allows people with unique business know-how to be transferred to a U.S. subsidiary or affiliate.

The H-1B visa: Allows bachelor degree holders or professionals with extensive progressive experience in a specific field to be hired directly by the U.S. business, to work in their area of expertise.

The E-1 visa: Allows for entrepreneurs who are nationals of countries with which the U.S. has trade treaties with, to start a business in the U.S. and import, export, transfer know how or services with their home country.

The E-2 visa: Allows for entrepreneurs who are nationals of investment treaty countries to start a business in the U.S. and invest capital at risk into the business, for qualification for the visa.

The O-1 visa: People of distinguished merit or ability in the arts, sports, science, or business qualify for the O-1 visa to pursue their professional endeavors in the U.S.

The TN visa: For Canadian and Mexican nationals; allows for certain professionals to start a business or work in the U.S., in their areas of expertise.

As you can see, the flexibility is great, the choices are many, and the issue is not complicated. An experienced attorney can analyze your specific needs and together, you can come up with the alternative that best suits your personal, family and business plans. But remember: do not rely on generic information to make decisions; always consult an attorney regarding your specific situation.

The hiring of an attorney is an important decision which should not be solely based on advertising. Before deciding, ask us for information regarding our experience and qualifications.

Contributed by Genilde E. Guerra, Attorney at Law
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