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Many people dream of being their own boss and building their own little empire from scratch. If you’re moving to, or already living in the United States, and intend to start your own business, it is important to plan properly and understand all the procedures, including visa considerations and registering your business.

 Important: Starting a small business in the U.S. is like any other country. It’s crucial to do market research, have a carefully thought-out business plan and secure the capital needed to put your plan into action. The U.S. Small Business Administration is an official government agency that helps to counsel and assist small business owners. 

Visa Considerations

Those who hold a green card do not need to worry about this section. Every other foreign national, however, will need to carefully consider their visa options. The three most common types of visa used by expats who start a business in the U.S. are the E-1, E-2, and EB-5 visas.

E-1 Trader Visa

A trader visa is an option for managers or specialists who are involved in international trade. It allows them to enter the U.S. and continue trading. In this case, “trade” includes commercial transactions with goods or in services such as banking, insurance, tourism, or consulting.

E-2 Investor Visa

This visa allows expats to either start a new business or buy an existing business that they will directly manage. Investment amounts vary based on the type of business, and although this is a nonimmigrant visa (meaning it does not lead to citizenship), it is valid indefinitely as long as you continue to run the business.

EB-5 Immigrant Investor Visa

Known as the “million dollar green card,” this visa is available to those with a large amount of capital that they will actively invest in a new or existing business. The minimum investment is USD $500,000 for rural areas or USD $1,000,000 in urban areas. You must prove that your funds are from a legitimate source and that your investment will result in the creation of at least ten full-time jobs. With this investor visa, you can obtain a green card for permanent residency.

Choosing the company structure

Choosing your business structure is a crucial initial step in setting up a business. This step will determine how you file taxes, who is responsible for financial risk and gain, and who will be making decisions for the company. The most common legal structures are a Corporation, Limited Liability Company, Partnership, and Sole Proprietorship.

Sole Proprietorship

This model is for a single person business. Assets and liabilities are not separate from your personal accounts. This business type is good for low-risk ventures or those who would like to test an idea before raising capital for a more formal business.

Partnership

This structure is for two or more business owners and provides varying levels of asset protection. With this model, the partners who assume more risk also assume more control of the company.

Limited Liability Company

Also called an LLC, this model offers a middle ground between partnership and a corporation. In most cases, personal assets are safe in case of bankruptcy or lawsuits. Note that under this model, owners are considered self-employed and are subject to pay all associated tax contributions.

Corporation

Strictly for larger businesses, a corporation will strongly protect owners from any personal liability. However, this model is more expensive to create and requires more extensive record keeping and reporting.

 Important: Bear in mind that the formalities and legal procedures vary from one state to another. Do not hesitate to seek help from an accountant or tax lawyer to get assistance or additional information about the legal procedures in your state.

Registering your business

After you decide on your company structure, you will need to complete several steps to register your business and ensure its a legal entity. These steps build upon each other and must be completed before you may legally operate in the U.S.

Your business name will need to be registered with the federal and state government. Note that your business name must be individual and cannot be in use by another U.S. company. After the business name is registered, you will need to request state and federal tax ID numbers and apply for any necessary licenses and permits. Lastly, you will need to open a business bank account to keep your business’ money legally compliant and protected.

 Useful Links:

U.S. Small Business Administration
Internal Revenue Service (IRS) small business checklist
US visas

We do our best to provide accurate and up to date information. However, if you have noticed any inaccuracies in this article, please let us know in the comments section below.