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05/07/2016 How to Start a Business in the U.S. as a Foreign National | The U.S. Small Business Administration | SBA.gov
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By Caron_Beesley, Contributor Published: May 16, 2016
How to Start a Business in the U.S. as a
Foreign National
The U.S. prides itself on being a nation born of immigrants and entrepreneurs.
Opening its doors to foreign nationals seeking to live the American dream is
something that continues to this day.
But if you’re looking to start a business in the U.S. as a foreign national or alien, you’ll
no doubt have questions. What are the immigration requirements? How do you get
started? What tax obligations must you adhere to? Can you get financing from U.S.
banks?
While it’s advisable to get the help from trusted experts including lawyers and
accountants, here are some basic considerations to get you started.
Can I Start a Business in the U.S. as a Foreign National?
Aside from U.S. citizens or naturalized citizens, individuals with the following
immigration status can start a business in this country:
Green Card Holders – Also known as “permanent residents”, green card
holders can work, live and study in the U.S. while maintaining their foreign
citizenship. They can also join the armed forces and start a business.
EB-5 Investor Green Cards – The EB-5 Immigrant Investor Program is
administered by the U.S. Citizenship and Immigration Services (USACE) and
enables entrepreneurs, their spouses, and unmarried children under 21 to
apply for a green card. Up to 10,000 visas are issued each year. Applicants
have to meet very specific criteria including making an investment in a
commercial enterprise in the U.S. ($1,000,000, or at least $500,000 in a
targeted employment area (high unemployment or rural area) and plan to
create or preserve 10 permanent full-time jobs. The process is fraught with
pros and cons. Consult an immigration lawyer to understand the full
implications of an EB-5 green card. Learn more about getting a green card
through investment.
Other Immigrant and Non-Immigrants Visas – The USCIS’s Entrepreneur
Visa Guide provides a menu of possible visa pathways for foreign
entrepreneurs. Whether you are looking to explore or start a business, or are
already in business and want to immigrate permanently, your options are
extensive.
Once you’ve found the right visa pathway there are a number of steps to setting up a
business in the U.S. If you’re a green card holder, you’ll take the same steps that an
American citizen would (check out SBA’s Starting a Business Guide and don’t miss
these 10 Steps to Starting a Business).
For everyone else, there are a number of key considerations you should be aware of:
Structuring your U.S. Business
One very important step in getting started is determining how to structure your
business. You can choose to operate your business as a sole proprietorship, LLC,
Corporation, partnership, or S Corporation.
While the process of incorporation is the same as it is for U.S. citizens and is handled
at the state, not federal level, it’s important to understand and get advice about the
ownership status and tax ramifications of your chosen entity. For example, an S
Corporation is an increasingly popular choice for entrepreneurs, but its shares can
only be held by U.S. citizens and resident aliens, while an LLC or C Corporation has no
More Posts in this category
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June 15, 2016
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May 18, 2016
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Mean?
April 21, 2016
Just Started a Business? Understand
your Tax Obligations
April 06, 2016
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Start-Up Success, What Is?
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Meet Our Contributors
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05/07/2016 How to Start a Business in the U.S. as a Foreign National | The U.S. Small Business Administration | SBA.gov
https://www.sba.gov/blogs/how­start­business­us­foreign­national 2/3
restrictions on non-U.S. citizen owners. This guide offers more insight into the main
business entities operated in the U.S. and how to apply.
Establishing a U.S. Business Bank Account
Another key consideration is establishing a U.S. bank account. First and foremost,
banks require valid ID. For a U.S. person that’s typically your social security number,
driver’s license, passport, etc. For a non-U.S. national you’ll need a tax identification
number (more on that below) and a government-issued document bearing a
photograph. For a business account, you may also need to produce your articles of
incorporation, U.S. business address, and more. Check with your bank to find out
more as requirements vary.
Establishing an Online Retail Presence
Establishing an online retail presence in the U.S. is a popular choice for many foreign
business owners. U.S. consumers are more likely to purchase from a U.S. ecommerce
site than one that’s based overseas. You can read more about general resources for
online businesses, including privacy and advertising regulations here, along with
specific information on international sales.
Understanding U.S. Taxes
This is where you should most definitely get the advice on a tax practitioner who
understands business tax law. Here’s a high level view of your key obligations:
Business Tax Filing and Payments – All non-resident aliens must file and pay
state and federal taxes on business income. You will be taxed at regular U.S.
corporate rates but only on income from U.S. sources that is connected with
that business, and at 30% on income not connected with that business (source
). Much depends on the extent of the non-U.S. person’s presence in the U.S.
The U.S. tax system is complex, so please consult an expert to determine your
obligations.
Depending on the nature of your business, you are also obliged to pay sales
tax, self-employment, social security, and Medicare taxes, make estimated tax
payments, pay excise duties, etc.
The Internal Revenue Service (IRS) guide to Business Taxes can help introduce
you to each of these. Check with your state and local government with regards
your business tax obligations at that level, including sales tax, income tax,
property tax, etc.
Apply for a Tax Identification Number – Most U.S. business (including
permanent residents or resident aliens) require an employer identification
number (EIN) from the IRS to support tax filing and reporting. This identifies
the business entity (think of it as the business equivalent of a social security
number). For non-resident aliens, an Individual Taxpayer Identification
Number (ITIN) will suffice. The IRS issues these 9-digit tax processing numbers
to individuals who are required to pay U.S. taxes but who are ineligible for a
SSN, including non-resident aliens.
Getting Access to Financing
Access to capital is essential for small business growth, regardless of the nationality or
immigration status of the owner(s). Being a non-U.S. citizen doesn’t preclude anyone
from getting capital, although banks may enforce more stringent eligibility
requirements so they can be assured you are not a flight risk!
In fact, the SBA oversees a number of small business loan programs that alien-owned
U.S. businesses may qualify for, most notably its most popular program – the 7(a)
loan program. During the application process, legal permanent residents must
evidence their immigration status (usually your valid card) and majority ownership;
while non-immigrant aliens or foreign nationals, need to pass more requirements.
This includes providing evidence that they have been in business for 12 months prior
to submitting the application, assuring an eligible manager will be in place indefinitely,
providing a personal guaranty, and sufficiently pledging U.S.-based collateral to
ensure that the total value of the loan can be paid back in the event of liquidation for
the life of the loan.
Disclaimer: None of the above constitutes legal or tax advice and is not guaranteed.
Readers are cautioned not to rely on this information. Please consult a professional for the
latest information on immigration, business, and tax law.
About the Author:
SIGN UP
FOR OUR NEWSLETTER
05/07/2016 How to Start a Business in the U.S. as a Foreign National | The U.S. Small Business Administration | SBA.gov
https://www.sba.gov/blogs/how­start­business­us­foreign­national 3/3
Caron Beesley
Contributor
Caron Beesley is a small business owner, a writer, and
marketing communications consultant. Caron works
with the SBA.gov team to promote essential
government resources that help entrepreneurs and
small business owners start-up, grow and succeed.
Follow Caron on Twitter: @caronbeesley
Comments:
bestpsychicpred... | 6/4/2016 - 12:35 am
Every day, it’s easy to realize that foreign nationals are setting up U.S.
businesses, from small shops to major enterprises. Accessing the U.S.
marketplace is the key to success for lots of the businesses worldwide. The
most effective way to reach this market is to take advantage of the world’s
best, largest integrated national market at the lowest tax rate. Starting off a
company in the U.S. as a non-resident is simple if you have the support from
team skilled in company formation, import-export, immigration, real estate,
international tax, and supply chain.
coreyvandenberg | 5/23/2016 - 9:31 am
"Being a non-U.S. citizen doesn’t preclude anyone from getting capital,
although banks may enforce more stringent eligibility requirements so they
can be assured you are not a flight risk!" This is simply not accurate. Even
anti-discriminatory laws cover immigration status as an exception. Most
banks limit or preclude ITIN lending. This all sounds good, but the reality is
so does the SBA! As I understand it, the SBA will not accept an ITIN either...
Rodney Owens | 5/21/2016 - 2:17 am
Most of times, foreigners with investments or business in the U.S. should set
up a domestic corporation. Although forming a U.S. business isn’t
particularly hard, the tax strategies and consequences, which should inform
your decision in both the U.S. and your country, can be complex. I think that
you should consult with experts on tax law in the U.S. and your home
country before taking the plunge.
DOWNHOME | 5/16/2016 - 8:53 pm
I am a 90% disabled, female, retiree and want to start a restaurant. What
type of loans/grants are available to help me start my own business?
Leave a Comment
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New users, Register for a new account and join the conversation today!
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Sba how to start a business in the u.s. as a foreign national the u.s. small business administration sba

  • 1. 05/07/2016 How to Start a Business in the U.S. as a Foreign National | The U.S. Small Business Administration | SBA.gov https://www.sba.gov/blogs/how­start­business­us­foreign­national 1/3 Share: 4 Comments welcome on this page. See Rules of Conduct. By Caron_Beesley, Contributor Published: May 16, 2016 How to Start a Business in the U.S. as a Foreign National The U.S. prides itself on being a nation born of immigrants and entrepreneurs. Opening its doors to foreign nationals seeking to live the American dream is something that continues to this day. But if you’re looking to start a business in the U.S. as a foreign national or alien, you’ll no doubt have questions. What are the immigration requirements? How do you get started? What tax obligations must you adhere to? Can you get financing from U.S. banks? While it’s advisable to get the help from trusted experts including lawyers and accountants, here are some basic considerations to get you started. Can I Start a Business in the U.S. as a Foreign National? Aside from U.S. citizens or naturalized citizens, individuals with the following immigration status can start a business in this country: Green Card Holders – Also known as “permanent residents”, green card holders can work, live and study in the U.S. while maintaining their foreign citizenship. They can also join the armed forces and start a business. EB-5 Investor Green Cards – The EB-5 Immigrant Investor Program is administered by the U.S. Citizenship and Immigration Services (USACE) and enables entrepreneurs, their spouses, and unmarried children under 21 to apply for a green card. Up to 10,000 visas are issued each year. Applicants have to meet very specific criteria including making an investment in a commercial enterprise in the U.S. ($1,000,000, or at least $500,000 in a targeted employment area (high unemployment or rural area) and plan to create or preserve 10 permanent full-time jobs. The process is fraught with pros and cons. Consult an immigration lawyer to understand the full implications of an EB-5 green card. Learn more about getting a green card through investment. Other Immigrant and Non-Immigrants Visas – The USCIS’s Entrepreneur Visa Guide provides a menu of possible visa pathways for foreign entrepreneurs. Whether you are looking to explore or start a business, or are already in business and want to immigrate permanently, your options are extensive. Once you’ve found the right visa pathway there are a number of steps to setting up a business in the U.S. If you’re a green card holder, you’ll take the same steps that an American citizen would (check out SBA’s Starting a Business Guide and don’t miss these 10 Steps to Starting a Business). For everyone else, there are a number of key considerations you should be aware of: Structuring your U.S. Business One very important step in getting started is determining how to structure your business. You can choose to operate your business as a sole proprietorship, LLC, Corporation, partnership, or S Corporation. While the process of incorporation is the same as it is for U.S. citizens and is handled at the state, not federal level, it’s important to understand and get advice about the ownership status and tax ramifications of your chosen entity. For example, an S Corporation is an increasingly popular choice for entrepreneurs, but its shares can only be held by U.S. citizens and resident aliens, while an LLC or C Corporation has no More Posts in this category What is An EIN and Why Is It Important? June 15, 2016 Basic Information About Operating Agreements May 18, 2016 Franchise Support: What Does It Mean? April 21, 2016 Just Started a Business? Understand your Tax Obligations April 06, 2016 If Revenue isn’t the True Measure of Start-Up Success, What Is? March 30, 2016 Meet Our Contributors SBA.gov » Blogs » Starting a Business » How to Start a Business in the U.S. as a Foreign National LOGIN REGISTER CONTACT US FOR LENDERS NEWSROOM SBA EN ESPAÑOLX Selecione o idioma TRADUTOR Starting & Managing Loans & Grants Contracting Learning Center Local Assistance About SBA Blogs . Starting a Business Search BlogsRegister VIEW ALL Maria Contreras- Sweet SBA Administrator Tameka Montgomery SBA Official Ann Marie Mehlum SBA Official VIEW ALL SIGN UP FOR OUR NEWSLETTER
  • 2. 05/07/2016 How to Start a Business in the U.S. as a Foreign National | The U.S. Small Business Administration | SBA.gov https://www.sba.gov/blogs/how­start­business­us­foreign­national 2/3 restrictions on non-U.S. citizen owners. This guide offers more insight into the main business entities operated in the U.S. and how to apply. Establishing a U.S. Business Bank Account Another key consideration is establishing a U.S. bank account. First and foremost, banks require valid ID. For a U.S. person that’s typically your social security number, driver’s license, passport, etc. For a non-U.S. national you’ll need a tax identification number (more on that below) and a government-issued document bearing a photograph. For a business account, you may also need to produce your articles of incorporation, U.S. business address, and more. Check with your bank to find out more as requirements vary. Establishing an Online Retail Presence Establishing an online retail presence in the U.S. is a popular choice for many foreign business owners. U.S. consumers are more likely to purchase from a U.S. ecommerce site than one that’s based overseas. You can read more about general resources for online businesses, including privacy and advertising regulations here, along with specific information on international sales. Understanding U.S. Taxes This is where you should most definitely get the advice on a tax practitioner who understands business tax law. Here’s a high level view of your key obligations: Business Tax Filing and Payments – All non-resident aliens must file and pay state and federal taxes on business income. You will be taxed at regular U.S. corporate rates but only on income from U.S. sources that is connected with that business, and at 30% on income not connected with that business (source ). Much depends on the extent of the non-U.S. person’s presence in the U.S. The U.S. tax system is complex, so please consult an expert to determine your obligations. Depending on the nature of your business, you are also obliged to pay sales tax, self-employment, social security, and Medicare taxes, make estimated tax payments, pay excise duties, etc. The Internal Revenue Service (IRS) guide to Business Taxes can help introduce you to each of these. Check with your state and local government with regards your business tax obligations at that level, including sales tax, income tax, property tax, etc. Apply for a Tax Identification Number – Most U.S. business (including permanent residents or resident aliens) require an employer identification number (EIN) from the IRS to support tax filing and reporting. This identifies the business entity (think of it as the business equivalent of a social security number). For non-resident aliens, an Individual Taxpayer Identification Number (ITIN) will suffice. The IRS issues these 9-digit tax processing numbers to individuals who are required to pay U.S. taxes but who are ineligible for a SSN, including non-resident aliens. Getting Access to Financing Access to capital is essential for small business growth, regardless of the nationality or immigration status of the owner(s). Being a non-U.S. citizen doesn’t preclude anyone from getting capital, although banks may enforce more stringent eligibility requirements so they can be assured you are not a flight risk! In fact, the SBA oversees a number of small business loan programs that alien-owned U.S. businesses may qualify for, most notably its most popular program – the 7(a) loan program. During the application process, legal permanent residents must evidence their immigration status (usually your valid card) and majority ownership; while non-immigrant aliens or foreign nationals, need to pass more requirements. This includes providing evidence that they have been in business for 12 months prior to submitting the application, assuring an eligible manager will be in place indefinitely, providing a personal guaranty, and sufficiently pledging U.S.-based collateral to ensure that the total value of the loan can be paid back in the event of liquidation for the life of the loan. Disclaimer: None of the above constitutes legal or tax advice and is not guaranteed. Readers are cautioned not to rely on this information. Please consult a professional for the latest information on immigration, business, and tax law. About the Author: SIGN UP FOR OUR NEWSLETTER
  • 3. 05/07/2016 How to Start a Business in the U.S. as a Foreign National | The U.S. Small Business Administration | SBA.gov https://www.sba.gov/blogs/how­start­business­us­foreign­national 3/3 Caron Beesley Contributor Caron Beesley is a small business owner, a writer, and marketing communications consultant. Caron works with the SBA.gov team to promote essential government resources that help entrepreneurs and small business owners start-up, grow and succeed. Follow Caron on Twitter: @caronbeesley Comments: bestpsychicpred... | 6/4/2016 - 12:35 am Every day, it’s easy to realize that foreign nationals are setting up U.S. businesses, from small shops to major enterprises. Accessing the U.S. marketplace is the key to success for lots of the businesses worldwide. The most effective way to reach this market is to take advantage of the world’s best, largest integrated national market at the lowest tax rate. Starting off a company in the U.S. as a non-resident is simple if you have the support from team skilled in company formation, import-export, immigration, real estate, international tax, and supply chain. coreyvandenberg | 5/23/2016 - 9:31 am "Being a non-U.S. citizen doesn’t preclude anyone from getting capital, although banks may enforce more stringent eligibility requirements so they can be assured you are not a flight risk!" This is simply not accurate. Even anti-discriminatory laws cover immigration status as an exception. Most banks limit or preclude ITIN lending. This all sounds good, but the reality is so does the SBA! As I understand it, the SBA will not accept an ITIN either... Rodney Owens | 5/21/2016 - 2:17 am Most of times, foreigners with investments or business in the U.S. should set up a domestic corporation. Although forming a U.S. business isn’t particularly hard, the tax strategies and consequences, which should inform your decision in both the U.S. and your country, can be complex. I think that you should consult with experts on tax law in the U.S. and your home country before taking the plunge. DOWNHOME | 5/16/2016 - 8:53 pm I am a 90% disabled, female, retiree and want to start a restaurant. What type of loans/grants are available to help me start my own business? Leave a Comment You must be logged in to leave comments. If you already have an SBA.gov account, Log In to leave your comment. New users, Register for a new account and join the conversation today! Customer Service About SBA Contact SBA En Español Media and Press Relations SBA Locations SBA Team About SBA.gov Site Map Privacy Policy Linking Policy Accessibility Disclaimers Social Media Data Store SBA Information Freedom of Information Act No Fear Act Report Fraud, Waste and Abuse Initiatives Plain Language SBA Performance Strategic Planning Performance, Budget & Finances Open Government Policy and Regulations Eliminating Fraud, Waste and Abuse Advocacy & Oversight Inspector General Advocacy Hearings and Appeals Ombudsman Tools and Features Online Training Create a Business Plan Find Events Qualify for Government Contracts SBA Videos WhiteHouse.gov USA.gov Regulations.gov In Partnership with BusinessUSA.gov U.S. Small Business Administration, 409 3rd St, SW. Washington DC 20416. TRANSLATE LOGIN REGISTER EMAIL UPDATES CONTACT US FOR LENDERS NEWSROOM SBA EN ESPAÑOL