Step 5. U.S. Entity Formation Strategies

How to Start a Company in the U.S.

Start a U.S. Company and Leverage Opportunities to Grow and Protect Your International Business!


Let NCP Help You Form Your U.S. Company With our Complete Turnkey System – So You Can Properly Take Advantage of the Opportunities in the United States and Protect Your Assets.

Position Your New U.S. Company to Sell on Amazon, Leverage Joint Venture Opportunities, U.S. Real Estate, U.S. Tax Lien Certificates or Other Investments!

Since 1997 Nevada Corporate Planners (NCP) has helped thousands of business owners and entrepreneurs launch their business with confidence.

If you are based outside the United States, whether in Canada, the UK, Europe, Asia, Australia, New Zealand, South America.there are many compelling reasons to establish a U.S. corporation or LLC (Limited Liability Company).

The Secret Ingredient to U.S. Success for an Internationally- Based Company is to Develop a Strong U.S. Brand.

Here are some of the many benefits of forming a Corporation or LLC in the United States:

  • Develop trust in the eyes of the U.S. online consumer to take advantage of the enormous $183.9 billion to be spent by U.S. consumers online.
  • Establish instant credibility with your business and a worldwide presence with a U.S. office or virtual location (office in your home country and now an office in the United States) which helps facilitate more U.S. business opportunities. This can be clearly seen on your website. You may only need a U.S. mail service to scan and link your sales tax responsibilities from all the Amazon FBA states and you are looking to avoid a permanent establishment in the U.S. If you are looking to avoid a permanent establishment, our virtual address service will be best. We have a special training by a U.S. tax attorney included in our U.S. company package that covers the basic of U.S. tax treaties.
  • Gain more United States business and clients because of the comfort level of consumers doing business directly with companies in the U.S.
  • Potential for more internet revenue from U.S. customers because of the U.S. presence. Check your internet traffic in the U.S. compared to your home country and compare sales percentages to see if you have an opportunity to gain more market shares in the U.S.
  • U.S. consumers will typically not buy as many products and services online from a foreign country without a U.S. presence because they are concerned about customer service, refunds, and liability and many times would rather, click the back arrow and go back to their search for another company with similar products and services, with a U.S. company, and purchase from them. This is your opportunity.
  • Protect your assets (an e-commerce busines in your home country) from devastating lawsuits.
  • Launch your U.S. e-commerce business to scale for sale.
  • Leverage more joint ventures with U.S. companies looking for your products and services to promote to their clients! Invest in U.S. real estate and U.S. tax lien certificates and take advantage of current opportunities.
  • Establish a company outside the jurisdiction of your own country to help protect your net worth from lawsuits in your home country.
  • Invest in other U.S. assets that may prefer a U.S. company to hold title for ownership! Establish the gateway for Business VISAs, like the L-1 VISA, and other opportunities.

Immigration Rules and Business VISA Training

When you become a client of NCP’s you will receive full access to our Immigration resource to help you with the requirements for work VISAs when required and your best options. If you have specific questions on your situation, you will be provided with the contact information of a recommended immigration attorney.

What is the Best Legal Structure?

Your options are either an LLC taxed as a partnership, an LLC disregarded for tax purposes, an LLC taxed as a C corporation or a C corporation. An S corporation is not an option for a foreign owner because you would not meet the S corporation shareholder rules.

  • Annual gross revenue
  • Annual net profits. This is an important part of your U.S. company formation
  • Goal of net profits to reinvest or distribute
  • Number of partners
  • Sales tax compliance when selling products. Even if no physical nexus in the U.S.
  • Safe vs. risk assets (should be in separate entities)
  • If real estate, what states will the entity own the real estate
  • Partner’s ownership (individual, foreign trust, foreign corporation other)
  • Type of income
  • U.S. 30% withholding rates
  • U.S. tax treaty with your country
  • Your individual situation

* When you incorporate with NCP these questions will be addressed in our 45-minute video overview as to which state and entity is best. Separately, we have paid strategy sessions available. When you become a client we have 20 partners that specialize in other areas for support including legal, tax, trademarks, and immigration resources…

U.S. Banking Options

Rules have changed a lot over the last couple of years with your ability to establish a U.S. bank account without having to travel to the U.S. If you are planning to travel to the U.S. there are many options for you and you will want to make sure the bank account is established in the proper jurisdiction. Please email us at support@launchwithconfidence.com for our most current banking solutions and what is possible.

If you are not planning to travel to the U.S. your options are limited but there are payment gateways to help get your money back to your country (many times saving you money over wiring via a U.S. bank). NCP does have an option for your U.S. business to establish a U.S. bank account when you travel to the U.S. (even if a foreign entity- which has additional steps including a lease agreement which we provide) Keep in mind banks are subject to change their policies at any time.

Some banks require a U.S. utility bill. We have solutions with our bank providers to help get your account opened when you travel in person.

U.S. Virtual Address & Mail Services

Establish a U.S. Virtual Premium Address, Scan Sales Tax Permits, Merchant Statements & Other Virtual Business Mail for Timely Execution. Receiving your Sales Tax Registrations, Late & Demand Notices, or Merchant Chargebacks late, or not at all, leads to unnecessary massive costs to your business. Let’s solve this for you.

Only need a U.S. address for mail purposes and looking to avoid a permantent establishment? Are you an e-commerce seller with economic nexus in multiple U.S. states? Not just selling on a marketplace facilitator platform such as Amazon, eBay or Walmart, where they are collecting? You may have multiple states where sales tax registration is still required and that will lead to lots of mail for you to manage. The best part is that our team will manage the mail for you with our virtual mail service.

U.S. EIN

An EIN (employer identification number) is required for each new entity (corporation or LLC) in the U.S. NCP will send you the form SS-4 completed via email for your signature to scan and email back to our offices. We will obtain the EIN through the IRS within 5-6 business days of our SS4 application being completed and received by our office. This requires us to fax the application to the IRS with our address and as the third party designee and follow up with a call to the IRS after the 5th day. It is a different process as a foreign individual or foreign enitty which involves calling the IRS.

U.S. Taxes

Forming a U.S. entity will trigger U.S. tax returns required for your business. This may include both a federal return, such as a 1065 for an LLC taxed as a partnership, and a 1040NR on the partners (if individuals) or 1120F or 1065 if a foreign corporation or partnership is the owner of the U.S. entity (along with IRS forms 5472 and 8833). There are several other reporting and U.S. tax filings requirements*. As a client of NCPs you will receive timely emails throughout the year to remind you of the U.S. tax requirements and a referral to the U.S. CPA firm we work with to make sure you are compliant with U.S. taxes and your countries tax treaty.

*U.S. Federal Taxes Due when a U.S. Entity is Owned by a Foreign Entity or Individual
There are two categories the U.S. entity and situation may fall into:

1. ECI (Effectively Connected Income) is defined as income from sources within the U.S. connected with a foreign person’s conduct of a trade or business in the U.S. ECI is taxed on a net basis after deductions for allocable expenses at regular U.S. income tax rates, OR

2. FDAP: fixed or determinable annual or periodical income is subject to withholding at a 30% flat rate. This is a FLAT TAX on GROSS INCOME (with NO deductions that come into play). This is designed for a U.S. entity that is involved in a “holding” or “passive” type activity in the U.S.

A regular C corporation would have its own federal tax rates. A single member LLC disregarded for tax purposes or a sole proprietorship would be required to file estimated quarterly taxes but there is no withholding. Working with tax professionals in the U.S. is highly recommended who have experience with non-U.S. clients.

Sales Tax for E-commerce sellers: Since the 2018 Wayfair vs South Dakota U.S. Supreme Court Case, e-commerce sellers need to track both physical and e-conomic nexus to know when to collect and remit sales tax. NCP sister brand, Sales Tax System, has filed thousands of sales tax registrations for e-commerce sellers since 2015.

U.S. Entity Formation Key Points

We’ve talked to literally hundreds of international business owners over the past 22 years.  If there’s one thing I’ve learned, beyond the shadow of a doubt, from those who have needlessly poured money down bottomless tax or expense holes after being sued and from those whose businesses have failed, it’s this:

NOT ONE was excited over the few bucks they saved by using a low cost incorporator — or worse, flying solo — to incorporate or establish a U.S. Entity for their business.

Years and untold dollars later, they sorely regret the hard work, stress, and many, many lost hours of time with family and friends — consumed instead dealing with lawyers, bankers, accountants and creditors, while picking up the pieces of the wreckage from a devastating lawsuit or bankruptcy.

All those losses could have been prevented by proper planning with the right company to support them. All those losses were the indirect and sometimes direct result of “penny-wise, pound foolish” thinking.  They’ve learned (the hard way) the value of having a company like NCP to be at their side, constantly guarding against missteps and roadblocks.

I hear the same basic horror stories told over and over again.  And while I’d never say “I told you so,” I’ve learned from them as well.

When investing in any services, you want to get what you pay for, maximize your investment, not get more than you need, and not find out after it is too late that you purchased a “tripwire” get-you-in-the-door package that was low-priced and causes you a lot of serious issues months or years from now (from issues with your bank account being closed in the middle of your next big promotion to U.S. federal or state tax notices or, even worse, a lawsuit, and come to find out you had ZERO protection.

You (rightfully so) may have thought or read that a U.S. LLC is a U.S. LLC (or corporation); “How complex could this be? Therefore, let me find the lowest-cost service for what I need to process merchant payments, provide a legal entity separate from my home country, open a U.S. bank account…

This is all a reasonable process, and no one really laid out the connecting points until now.

Below is a 2-minute preview of our 45-minute video helping you determine which state and entity is best. You will gain full access to the training when you sign up with one of our packages below:

There is much more to forming a U.S. entity than just filing articles with a company online, grabbing a U.S. address service, and getting an EIN for $300 (a common “tripwire” price to get you in the door. Most of the time, this leads to unforeseen problems from 3 months to 2-3 years down the road.

What is different with NCP is we ONLY do a COMPLETE U.S. FORMATION and either have training, checklists or resources that covers

Doing business in the U.S. is one of the best opportunities to grow, especially if you are operating online. The U.S. has the largest online consumer market in the world! The key is to develop trust with a legitimate U.S. company.

Our goal is to work with you to help you avoid these costly mistakes and to be successful in the U.S.  If you still need support, here is a review of our packages and process:

Our Complete U.S. LLC/Corporation Formation Packages:

Once you get started, you will have immediate access to our video training on which state and entity is best for you. You will also have access to our video with our U.S. tax attorney on U.S. tax responsibilities.

Go to this link to get started now with a Complete U.S. Formation.

Here is a review of the process to establish a complete U.S. company:

  • Select a Package
  • Payment
  • Thank you page and welcome email has link with video training and our form to complete your entity information
  • Send you an email to pay the state fees (if not already paid up front)
  • We send you an email to verify your information
  • Entity filed within 3-7 business days, record book in another 5-10 business days, EIN 5-6 business days, bank account details are sent to you to let us know when you would like to travel to the U.S. to establish your account.
  • Support
    • Ncpmembers.com with online videos on record book and training
    • Email questions to customer service
    • Videos on every form to make it simple
    • Launch with Confidence checklists
    • Referral partners for legal, tax, immigration….support.

 

U.S. Customer Service Support

As a client of NCP’s, you will have full access to our support team. Plus you will have access to our ncpmembers.com filled with recorded training to help you with your common questions, including U.S. taxes, payroll, immigration and others. You will receive a fast start checklist to keep you on track and our team will walk you through the entire record book to complete the necessary forms and documents.

You will also have access to online training videos to guide you through the entire record book online. NCP offers other strategy sessions, sales tax compliance, and tax resources to help you Launch Your U.S. Business with Confidence!

Nevada Corporat Planners Testimonial by Chris Eldridge

Three Costly Mistakes to Avoid When Establishing Your U.S. Company

1. Costly Tax Mistakes with the U.S. Internal Revenue Service (IRS). There are many pitfalls and hidden land mines that can cause you a lot of damage with your U.S. company if you do not have all the facts up front. You must know which entity is best and the U.S. tax ramifications if the entity is taxed as a C corporation vs. an LLC. Both have very different U.S. tax structures. You must have an ITIN number and an EIN number. You must file the proper tax returns the following year. Setting up your company in the wrong state may cause you to pay an extra 5-8% of unnecessary state taxes. An LLC can be taxed in different methods; one will result in a flat 30% withholding tax on all profits before they flow back to you in your home country. If you are planning to expense out profits to your home country, you must be familiar with IRS form 5472 with the IRS (missing this form may create a $10K penalty for you)! Having the IRS auditing your U.S. company can be a fast way to go out of business with penalties and interest!

2. Blowing Your Chance at Setting up a U.S. Bank Account.  It is required to travel to the U.S. to open a U.S. bank account (assuming someone else in the U.S. is not signing on your account for you). Most assume since they are traveling and here in person it will be easy to establish a U.S. bank account for a newly formed LLC or Corporation, that is not the case. Most bankers will look at your new entity as a new local business and expect to see a local utility bill or office lease agreement. They may also require an ITIN or SSN on the signer and all signers present. Establishing a “cheap” online LLC and looking for bank account support and having to amend the LLC, add other parts to complete the entire package for the bank, is typically more expensive than doing it right in the first place with NCP.

2. Inconsistency in Your U.S. Company Set-Up. This happens when someone will set up a corporation in one state, a bank account in another state and a mail forwarding program only with a virtual U.S. phone number. You may get your bank account set up, but this will back fire when it comes to developing trust in the U.S. market. Only having a U.S. P.O. Box as your U.S. address sends a strong message to the U.S. consumer that you are a flake or you are attempting to hide something. Trust is the name of the game…don’t get cheap to save a few dollars and lose out on sales and joint ventures because of it!

CAUTION: Many online companies may make this appear to be simple. Meaning, very few steps for a low price. You do not want surprises, especially when you are not based in the United States. NCP’s goal is to remove surprises and provide the support you need with a complete process.

Make it easy on yourself – team up with the most efficient entity formation/business support partners in the world. If you are outside the U.S. call us at 001-702-367-7373 or e-mail us with your complete contact information at: support@launchWithConfidence.com.
You’ll be very glad you did.

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