Definition:
In the context of U.S. taxation and business formation, an NRA (Non-Resident Alien) is an individual who is not a U.S. citizen and does not meet the IRS criteria for residency (Green Card Test or Substantial Presence Test). NRAs are subject to a different set of tax rules and filing obligations compared to U.S. residents.
For company formation, NRAs can form U.S. LLCs or C-Corps and obtain an EIN without having a Social Security Number (SSN). However, they may face limitations—such as not being eligible to form an S-Corporation or open certain U.S. financial accounts without additional documentation like an ITIN.
Who is it for?
Any non-U.S. entrepreneur, freelancer, or remote SaaS founder looking to legally operate a U.S.-based business is classified as an NRA for IRS purposes. Understanding your NRA status is crucial for compliance and tax planning.
