Starting your own business is an exciting journey, but it can come with a number of challenges, especially if you are a non-resident of the USA. This is why we created this guide — to provide you with all the information you need to know before and after launching a business in the USA. Inside, you will find helpful tips to avoid common mistakes and pitfalls that many of our clients have faced, as well as a step-by-step plan for opening a business if you want to do it yourself.
If, after studying this guide you need additional assistance, you can always book a free consultation, where we will be happy to answer all your questions.
Introduction
No Taxes
The USA attracts entrepreneurs not only because of its massive market but also as an advantageous jurisdiction for tax optimization. The ability to minimize tax liabilities makes opening a business in the USA one of the most attractive options for non-residents. Unlike many other countries, the USA taxes only the income earned within its territory. This means that if your company operates globally and your US-based income is minimal or nonexistent, the tax burden will be significantly lower. If there are no operations within the USA, no taxes are levied at all.
International sanctions
It is important to note that US sanctions are not dependent on an individual's citizenship but rather on their place of residence. Citizens of sanctioned countries who continue to live in those countries cannot open a business in the USA. Pixel Tax Consulting handles business registration and accounting support and cannot work with clients residing in Russia and Belarus. However, difficulties may arise not only during the company formation process but also when opening bank accounts. Citizens of countries like Bosnia and Herzegovina, Croatia, Uzbekistan, Russia, Belarus and Ukraine often face challenges, particularly in online banks. Nonetheless, if you reside outside of Russia and Belarus, we can offer alternative solutions, including the possibility of opening a bank account offline.
Do I need a professional to open a company?
If you want to open a company in the USA, you likely won’t need help at every step, and you can do it independently by following our guide. However, for accounting, reports, and filing annual tax returns, you will still need qualified specialists.
If you don’t want to handle the company registration process yourself, our team is ready to take care of all the organizational details and assist you at every step — from registration to accounting support.
LLC or C-Corp?
One of the key decisions when starting a company is choosing the legal structure for registration. The most common options are:
- LLC — Limited Liability Company
- C-Corporation — C-Corp
To make the right choice, it is important to understand the main differences and benefits of each type of registration.
LLC
If you are looking for liability protection, minimal administrative costs and tax flexibility, an LLC is an excellent choice. It is easier to register and maintain. LLCs do not have stocks or shares. Instead, they have a company interest or percentage share (similar to profit and loss distribution among partners). LLCs are pass-through entities, meaning the LLC’s profits are passed on to its members and the company itself is not taxed.
C-Corporation
Also known as a C-Corp, this is a business structure in the USA that is a separate legal entity from its owners. A C-Corp is taxed as a separate entity. C-Corps are often preferred by large companies or multinational corporations with many shareholders or companies planning to attract investment and go public in the future, as they offer more flexibility in ownership and capital raising. Unlike LLCs, C-Corps have stricter rules and requirements.
If you are actively seeking or plan to seek investment in the future (e.g., from venture capitalists or accelerators) or if you plan to take your company public, we recommend forming a C-Corp in Delaware.
Which state Is best to register an LLC?
The best state to register an LLC is almost always where your company conducts most of its business. If you are not a US resident, you can choose any state. We recommend considering Delaware or Wyoming.
Delaware
We recommend Delaware if you have plans to attract investment for your American company from venture capitalists, accelerators or other investors, as they often require the company to be registered as a C-Corporation in Delaware. If you want the "prestige" of a Delaware registration even if you don’t plan to attract investments, you can also choose this state. If you are not yet sure whether you will attract investment or don’t know when you might do so, but are actively looking for funding or planning to in the future, it is recommended to start by registering an LLC in Delaware and then converting it to a C-Corporation.
Wyoming
Wyoming is the most popular state among non-residents running online businesses, e-commerce or for those who want a simple way to register and manage their company. Wyoming was the first state to adopt and refine LLC legislation and it has the most developed and long standing legal practice in the LLC field in the USA. Additionally, Wyoming has no corporate or income tax, making it even more attractive for business operations.
Opening an LLC
You can choose one of the following options:
- Hire a service (e.g., ptc.tax) that can handle the registration of your company in the USA, provide you with registration documents, and give you a business address in the USA.
OR
- Hire a registered agent and file the registration documents yourself with the state (you can apply and register an LLC directly by submitting the documents online through the state’s website).
If you choose the first option, we will handle all the steps for you and you won’t have to worry as long as you provide us with the necessary information.
If you prefer the second option, here’s what you need to do:
a. Choose a Registered Agent — you can find an agent through a Google search; a registered agent is mandatory in every state for an LLC. They charge annual fees (ranging from $25 to $200 depending on the state). For simplicity, you can also use the Bizee service.
b. Choose a Name for Your LLC — Check the state’s registry to see if the name you want for your LLC is available. If the state registry shows “No Records Found,” it means the name is available, and you can use it to register your LLC. Check the availability of your company name in popular states at the links below:
The name of your LLC must end with “LLC” or “L.L.C.” LLC is usually the most popular option.
c. Get a Business Address in the USA Purchase a business address in the USA from your registered agent or another service provider, as this is necessary for registering a company in the USA. Ensure you also have a virtual mailbox and mail scanning service at this address, so you can receive all important correspondence from the government or for your business, and the service provider can scan the received mail and send it to you.
d. Register Your LLC Online You can do this directly through the state’s website. Each state has different registration fees and processing times. Registration fees typically range from $50 to $500, and the average registration time is about one week.
e. Receive Company Registration Documents The state will send you the "Articles of Incorporation," which confirm that your company is registered in the USA.
f. Draft an Operating Agreement You are now responsible for drafting an operating agreement with the correct legal language and necessary provisions. The operating agreement should account for whether your company is a single-member LLC or has multiple members.
g. Other Important Company Documents Next, you should draft and prepare other legal documents necessary for your company in the USA, such as bank resolutions, attachments detailing the capital contributions of each member, and share certificates for all members.
*Learn more about opening an LLC, obtaining a mailing address in the USA, getting an EIN, opening a bank account in the USA, hiring employees in the USA, managing income, bookkeeping and budgeting, as well as taxes in our full guide available in your user account.
