Key Takeaways
- Setting up an enterprise within the US grants access to a vast and varied consumer base. It opens doors to innovation networks and important funding opportunities while improving your global reputation.
- Selecting the appropriate business entity, state of incorporation, and registered agent can have a significant impact on your business’s compliance obligations and future expansion efforts.
- Understanding US visa options and legal requirements is necessary for a smooth market entry and to ensure your business operates lawfully.
- Having a US business bank account makes it much easier to manage your money. Understanding federal and state tax liabilities is crucial to staying in compliance.
- Building a strong team requires knowledge of employment laws, effective recruitment strategies, and thoughtful decisions about remote or physical office setups.
- By utilizing local networks, embracing inclusive practices, and pursuing expert guidance, cultural, regulatory, and funding challenges can be overcome.
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An non-US entrepreneur is a business owner who does not have U.S. Citizenship or lawful permanent residency. Specifically, they want to manage or create an enterprise that functions within, or partners actively with, the US market. Most do so because they want access to the world’s largest customer base and the world’s largest economy.
Requirements and procedures vary depending on your country of origin, business type, and future plans. Bank accounts, taxes, and legal forms require an extra level of attention for non-US founders. For some, a visa or special work permit is required, while others simply have to register and can launch online utilizing global services.
In coming sections we’ll spotlight those key steps to starting or growing a business in the US. In addition, they will be tackling the most common issues that arise and providing actionable advice for founders across the world.
Why Eye the US Market?
This is what makes the US unique as a place where non-US entrepreneurs can find tangible opportunities for business expansion. The country combines a huge and diverse consumer market, deep funding channels, and a culture with an appetite for new concepts.
These combined strengths go a long way toward answering why so many of the best founders from outside the US see it as the perfect market.
Access Unmatched Consumer Base
In the US, individual buyers consumers, businesses, municipalities are a diverse, fractured, and chaotic mix. With more than 330 million consumers, the variety is endless.
Thorough market research conducted here is extremely important. Most companies send out surveys, hold focus groups, and scour public data to identify trends and find out what consumers are looking for.
Beyond the mainstream, there is opportunity for niche products. Take food products, for example—many of them have a niche but devoted following in regional areas or among younger millennials.
Customized outreach effectively engages these populations, breaking down potential barriers with plain language and straightforward messaging.
Tap Into Innovation Ecosystems
The US is home to impressive innovation ecosystems such as Silicon Valley and Boston. These cities are home to dozens of startup accelerators and co-working spaces.
Entrepreneurs can engage with universities like MIT or Stanford Universities to receive cutting edge concepts or technology. Most suit up and hit the conferences out in places like San Francisco or Austin, Texas, trying to connect with others in this field.
There is an active community of mentors, usually including experienced founders and smart investors who can provide honest feedback.
Explore Rich Funding Opportunities
Funding opportunities in the US are wide-ranging. Venture capital, angel investors, crowdfunding the works.
So many non-US founders participate in these pitch events or startup contests just to get in front of those funders. Some go so far as to apply for grants created specifically for startups.
Additionally, a well-defined business plan goes a long way in winning the necessary trust and opening the right doors.
Boost Your Global Credibility
Forming a presence in the U.S. increases your visibility on the global stage. It demonstrates to buyers and partners that you’re operating on a global stage.
Most entrepreneurs meet other founders through accelerators. They tell their US story through short-form ads and leverage their US audience to help them enter other markets.
First Steps: Structuring Your US Venture
There are some foundational steps to take when forming a U.S. business as a non-U.S. entrepreneur. Each decision you make will impact the operation of your business, how you pay taxes, and how you navigate US regulations. Many are only considering the type of entity, the rules of the state they’re choosing, the name of the company, and the necessity of a registered agent.
Choose Your Business Entity
Many foreign founders begin with an LLC or corporation. LLCs are often chosen for their simplicity of creation and tax benefits. Finally, they allow owners to maintain control over their assets.
Corporations may ultimately be preferable if you’re planning to raise a significant amount of money or go public. Partnerships are possible as well, but you must define distinct roles and responsibilities with signed agreements. Each one has its own set of ownership and management structure regulations.
If you plan to apply for a visa through your venture, you will likely need to have majority ownership of the company. Choose an entity that fits your business objectives and exit strategy. Don’t forget to think about how you want to divide responsibilities as well!
Select Your State of Incorporation
Delaware, Wyoming, and Nevada often rank high on lists of cheap, business-friendly states. They have low costs, and their rules are very easy and quick to meet. Certain states don’t require you to have a local address or a local bank account, which is a plus for foreign founders.
Consider the location of your potential clients, as well as the type of support you might require. Local laws, taxes, and fees vary widely from state to state, so research those aspects first before making your decision.
Name Your US Company
Your business name should be original and abide by state guidelines. Leverage state online databases and federal trademark searches to ensure no one else has claimed your name. Choose a name that embodies your business and resonates with your customer base.
This makes you more memorable and saves your brand from future unnecessary headaches.
Appoint a Registered Agent
A registered agent is required in each state. They receive any legal documents and ensure that no important document slips through the cracks. The agent needs to have a street address in the state you choose.
Most non-US owners opt to utilize a service to have their information go private and maintain compliance with US local requirements.
Navigating US Entry: Visas and Legalities
For the non-US entrepreneur, entering the US market entails quite an education on USA visas, legalities and paperwork. The US provides a variety of visas for business founders, each with unique application procedures, restrictions, and advantages. Knowing these routes makes it easier to find the best match for you, stay out of legal hot water, and ultimately make your move more successfully.
Keeping abreast of evolving immigration regulations and collaborating with professionals can help avoid lost time and reduce risk.
1. Key US Visa Options Overview
Entrepreneurs have more US visa options than they think! They get to choose the E-2 (investor), L-1 (intra-company transfer), O-1 (extraordinary ability), H-1B (specialty occupations), and EB-5 (investor green card).
The E-2 is limited to nationals of treaty countries and requires a substantial investment. The L-1 visa allows you to transfer essential personnel from your home company to a US affiliate. Under the EB-5, you’re awarded a green card if you invest a certain amount and create a certain number of jobs.
Every visa requires documentation—such as business proposal documents, employment history, or capital investment documentation. Consulting with an immigration attorney is a good idea, as regulations are complicated and subject to sudden change.
2. E-2 Visa: The Investor’s Path
The E-2 visa is for those who invest a large sum (often at least $100,000 USD or more) in a new or current US business. You do need a detailed business plan and you do need to be running the business on a day-to-day basis.
The E-2 can be renewed, allowing you to remain in the long-term as long as your business continues to operate.
3. L-1 Visa: Transferring Key Talent
The L-1 visa allows companies to transfer managers or other specialized personnel from outside the US to their US office. Specifically, L-1A is for managers and L-1B is for specialists.
You will need to create the narrative of the staff’s function and your company’s organizational structure. The visa is extendable, but has strict time limits.
4. O-1 Visa: For Extraordinary Abilities
The O-1 visa is reserved for individuals who demonstrate extraordinary ability in their field—be it technology, science, or the arts. You’ll need documentation, like international honors or acclaim or major media attention, and testimonials from your field’s experts.
This visa is suitable for founders with a proven track record in their industry.
5. Other Potential Immigration Routes
Others prefer the H-1B visa for specialized occupations. Some choose to take the EB-5 visa route to green card status through targeted investment and job creation for US workers.
There are family sponsorships and new visa types. As regulations are always subject to change, being informed is the most important thing.
Managing Money: US Banking and Taxes
For the non-US entrepreneur, managing money goes beyond simply opening up a bank account. You have to figure out US banking services, learn new tax rules, and keep your assets safe. Every single one of those steps determines how smoothly your business operates, and how much risk you absorb.
Open Your US Business Bank Account
Find banks that understand the US small business ecosystem and are friendly to global founders. Most US banks will require you to provide your business formation documents, proof of US address, and a copy of your ID. Each bank will have a different fee structure, account options and customer service platforms.
Many provide additional benefits, such as free domestic transfers or reduced monthly fees if you maintain a minimum balance. User-friendly online banking tools make it easy to track spending and send payments, saving you time. For instance, banks such as Mercury and Brex specialize in serving the needs of startups and non-residents through digital-first platforms.
Understand US Tax Obligations
US tax law can be complicated. It’s important to note that the IRS taxes all U.S. Citizens and permanent residents on their worldwide income. Failure to produce the necessary paperwork can have dire consequences.
If you don’t file FATCA Form 8938 or FBAR (FinCEN Form 114) banks can withhold 30% of your income as a penalty. State tax laws vary widely as well, so be sure to consult the rules in your state. Various tax credits and deductions are available that can help reduce your tax liability.
Collaborate with a tax professional to understand federal and state requirements. Maintaining accurate records is essential for reporting income and claiming expenses.
Protect Your American Assets
We recognize that risk is an intrinsic part of business, too. To protect what you’ve built, invest in commercial insurance, such as general liability and professional insurance. Have clearly defined ownership arrangements (like LLCs) to help shield personal assets from business liabilities.
Look back upon these protections frequently, particularly as your business expands or regulations evolve. Pre-immigration planning is important especially if you have businesses abroad.
Building Your Team in USA
Building your team in America as a non-US entrepreneur provides huge opportunities and genuine challenges. For many foreign founders, the path is a confusing gauntlet of policies—from US immigration to incorporation requirements. Some states, like Delaware and Nevada, are known for being friendly to new businesses, with lower fees and simple laws.
No matter where you deploy, understanding the rules of the road and how to assemble an all-star team is absolutely critical.
US Employment Law Essentials
Making sense of US employment law protects your business—and its workers. Each state has its own specific laws, but all states are required to adhere to federal guidelines on the treatment of employees. You must understand minimum wage and overtime, and generally how to properly pay people.
When building your team, you need to comply with anti-discrimination laws that prohibit bias against job applicants based on their race, gender, or national origin. Safety is about more than risk of injury. The law requires that you provide a safe and clean workplace.
For non-US founders, starting with an LLC or C corporation and getting an Employer Identification Number (EIN) is often needed before you can officially hire.
Hire Your First US Employees
When written well, a job description sets clear expectations for you and the person you’re hiring. Online job boards and recruiters are excellent resources for sourcing specialized talent. This is significant, considering that almost half of immigrants and refugees in the US have a college degree or equivalent job training.
So don’t miss out on this deep talent pool! Having a clear interview and onboarding process in place helps new hires feel like they’re being brought into the fold and set up to do their best work.
Decide: Remote or Physical Office
Remote work adds flexibility and can help you reach talent in many places. Depending on the nature of your work and how much in-person collaboration you want or require, office-based arrangements might make more sense.
Other teams employ a combination of the two, allowing employees the best of both worlds. Your decision will impact how employees interact with one another and their overall job satisfaction.
Overcoming Hurdles: Non-US Founder Challenges
Non-US entrepreneurs frequently encounter a unique combination of additional hurdles when getting their start in the US. Every step is a step in the right direction! From the mundane to the monumental, you adapt to different regulations, corporate cultures, and cultural environments. All of these founders struggle with language barriers, lack of access to capital, or discrimination due to their origin.
These hurdles notwithstanding, non-US founders bring tremendous value with their innovative thinking and expertise.
Tackle Cultural, Language Differences
Cultural and language differences can impede team collaboration and take the business to a trickle and prevent scale upwards. Creating that open environment at work, where all perspectives are welcomed, is an opportunity for everyone to feel like they belong.
Language education, or even just basic resources such as translation applications, can help avoid confusion during a pitch meeting or an email exchange. Updating your sales pitch or advertisements to align with local customs is the simplest way to make big strides toward connecting with consumers.
For instance, whether it’s using plain language or demonstrating an understanding of U.S. holidays in campaigns, it’s all about building trust. Immersing yourself in the local culture increases customer loyalty and allows multicultural teams to collaborate more effectively.
Navigate Complex US Regulations
The US is an incredibly rule-heavy environment, with a patchwork of rules at the federal, state and city level. All three can have a big impact on how you need to structure, staff, or market your business.
Checklists help you stay organized with various filings and deadlines. Legal professionals can assist in clarifying regulations regarding tax requirements or permitting. Staying on top of the rules is critically important because regulations are constantly evolving.
For example, a founder coming from Brazil could face challenges ranging from work visas to tax codes. These short but crucial details can make or break their successful move.
Secure Funding as a Foreigner
Obtaining capital for an emerging company is substantially more challenging for founders lacking a US credit history. As a non-US founder, your options are to attempt global crowdfunding sites or search for funds that support immigrants.
Trust is investor’s currency. Building trust with investors is essential. Concise pitches that focused on their top concerns, such as legal status or market fit, were most effective! Finding a mentor who’s been through it all makes a world of difference.
Build Strong Local Networks
Connections in the US business ecosystem are key to unlocking opportunities. Events and business organizations are excellent ways to connect with others and share lessons learned.
Working with local retail or service organizations can get you up to speed. Platforms such as social media, including LinkedIn, provide an excellent opportunity to connect with others and exchange ideas.
The better your network, the more support you’ll have when things go sideways.
Conclusion
While there are substantial challenges for non-US entrepreneurs looking to break into the US market, the opportunities are significant. The complicated process requires persistence, a methodical approach, and some knowledge of the local landscape. Every step along the way—from choosing a business structure to recruiting talent to selecting a bank—determines how smooth the road to scaling will be. Entrepreneurs from outside the U.S. Are looking for creative ways to put together their ideal teams. Yet, they’re operating within the rules and growing rapidly in the US. Each one is a step with valuable lessons you can apply to any large market. For more advice, anecdotes, or adventures from the journey to globalize your business, explore our other materials! We’d love for you to tell us about your own journey. Your story could inspire the next founder to get off on the right foot.
Frequently Asked Questions
What makes the US market attractive for non-US entrepreneurs?
What makes the US market attractive for non-US entrepreneurs? Its reputation for a business-friendly climate and global influence continues to draw international founders, regularly ranking it as the top market of choice.
How can I legally start a business in the US if I am not a citizen?
The answer is yes, the US allows non-residents to form a U.S. Company, such as a Limited Liability Company (LLC) or Corporation. Most states permit online registration, but having legal counsel will help ensure all legalities are handled properly.
What type of visa do I need to run my US business from within the country?
You may want to consider the E-2 Treaty Investor Visa or the L-1 Intracompany Transfer Visa. What business you are in and where you are from determines specific requirements. To determine which option is the best fit, consult with an immigration lawyer as soon as possible.
Can non-US entrepreneurs open a US bank account remotely?
Still, some banks offer a remote account opening option, but most will want you to visit in person. You will likely require a US address, formation company documents and a US tax identification number (EIN).
What taxes do non-US entrepreneurs pay for a US business?
You will need to pay US federal and any applicable state taxes on your US-source income. Tax rates and regulations vary based on what structure you’re operating under and where you’re based. Working with an experienced tax advisor will help you stay on the right side of the law.
How can I hire employees in the US as a non-resident business owner?
You must register to withhold taxes and comply with local labor laws. Most non-resident business owners utilize payroll services or hire through Employer of Record (EOR) platforms to handle compliance.
What are common challenges non-US founders face in the US?
These challenges come in the form of navigating US legal systems, obtaining visas, opening bank accounts, and gaining local networks. Fortunately, by planning ahead and consulting with experienced U.S. Immigration counsel, these challenges can be surmounted.
