US Non-Resident Incorporation

Company incorporation: Non- US residents

US non-residents often form companies in the United States; some companies operate within the US, while others operate entirely outside. For example, many web-based companies are formed in the US even though their owners have no tangible connection to the US other than the registration of their companies.

In general, there are no citizenship or residency requirements to form a company in the US. However, there are several factors that should be considered.

NOTE: Most states will not require disclosure of Director information at the time of formation but many may ask for this information when filing the next year's Annual Report. Please ask about our Nominee Services if appropriate.

PASS-THROUGH TAXATION:

For many clients, pass-through taxation, or the ability to have their entity treated as a non-tax-paying (transparent) entity is important. For US non-residents, creation of an S Corporation is not possible because all S Corporation shareholders must be US residents. Instead, pass-through taxation can be achieved by forming a Limited Liability Company (LLC) instead of a corporation.

TAXED AS PARTNERSHIP OR CORPORATION:

The LLC can, with the filing of its Application for Employer Identification Number (TaxID), elect to be taxed as either a partnership or a corporation. This selection, with certain restraints, may be changed in subsequent years.

FILING A US RETURN:

For a corporation formed in the US, there is an absolute requirement that it file a US tax return regardless of whether there is US income. However, the LLC is taxed as a partnership and the partners (principals) must file and pay individual US taxes only if they operate a trade or business in the US or if they have US-source (effectively-connected) income.

MIXED US AND NON-US SOURCE INCOME:

In this situation, it will usually be more advantageous to form a Limited Liability Company instead of a corporation. The global income of a US corporation is taxable whereas the LLC will be taxed as discussed above.

APOSTILLE:

An Apostille is a seal legalizing a public document for use in international transactions, in accordance with the Hague convention. Many countries require that official documents created in another country bear an Apostille as evidence that they are what they purport to be. We can easily have your formation documents Apostilled if need be.

WHERE TO FORM YOUR COMPANY:

In the US, you can form your company in any state you choose. If you plan, at some point, to open an office in the US, it may be cost-effective to form your company in the state where you foresee basing your company. The majority of US non-residents without a strong reason to form in any given jurisdiction choose Delaware or Nevada because of their business-friendly environments and easy compliance requirements.

WHAT'S MY ADDRESS?

Every state will require a Registered Agent/Registered Office with an address in that state for receipt of service of process or other official communications. We will serve as your Registered Agent / Registered Office. However, this is not your business address or mailing address which can generally be anywhere you wish. Please remember NOT to use your RA/RO address for anything other than official purposes as described above.

NOTE: In many cases, you may have compelling factors which require the formation of a corporation instead of a Limited Liability Company. For example, you may want to establish unequivocal tax residency in the US. Or you may be planning to sell stock to investors or file an Initial Public Offering (IPO).

US Non-Resident Incorporation