Starting a Business as an Immigrant in the U.S.

Steps for starting a business as an immigrant in the U.S.

So many times, we’ve been asked the steps for starting a business as an immigrant in the U.S. This is an opportunity for you to know in detail how this process should be handled. There is a handful of decisions to make, applications to file, and procedures to work on.

Discuss the possibilities with a lawyer and a Certified Public Accountant

While your business idea might seem bulletproof and you’ve done thorough research, it is always better to discuss your possibilities with an immigration lawyer and a CPA.

How can lawyers be of help when starting a business?

• You can discuss with lawyers what immigration processes work best for you and your business.
• Lawyers can also help you with the process while you focus on your business.
• Immigration attorneys can provide guidance throughout the process.

Certified Public Accountants provide integral assistance so your business complies with all tax-based regulations:

• CPAs will inform you about your tax responsibilities.
• They can also help you have your bookkeeping in order.
• CPAs can help you figure out which expenses are tax-deductible, and which aren’t.

Create a business plan

A business plan is not only a great tool for your business to grow in a healthy and organized way. It is also solid evidence for banks, immigration, and business entities. Creating a business plan shows you are serious about your business and a well-thought process going on. The U.S. Small Business Administration even has some detailed steps you can take to write a reliable and functional business plan.

Apply for the classification or visa that suits you

As an immigrant without a Green Card or any other legal status looking to start a business, you have a couple of options.

E-2 Treaty Investor Classification

An immigrant looking to start a business in the United States can apply to obtain an E-2 Treaty Investor Classification. According to the USCIS, the general qualifications are as follow:

• Be a national of a treaty country. A treaty country is one with which the U.S. maintains a treaty of commerce and navigation or a qualifying international agreement.
• Have a previous or active capital investment in a bona fide enterprise in the U.S.
• Showing at least 50% of the ownership of the enterprise. As an alternative, you can also provide proof that you are in a managerial position or have certain operational control.

EB-5 Visa

At the moment, this is the less reliable process to go through. The USCIS indicates that as of December 30,2021, this program has not been reenacted. This is also the process that requires more capital from the business owner. In case it is reenacted, and you wish to go through this process, here are some of the actual requirements:

• An EB-5 investor should create a business with at least 10 full-time qualifying employees.
• The minimum investment amounts go from USD 900,000.00 (in a targeted employment area) to USD 1,800,000.00 (in a high-employment area).

Choose a business structure

When starting a business in the U.S. as an immigrant, the most used business structures are C Corporations and Limited Liability Companies.

C Corporations

The U.S. Small Business Administration defines a C Corporation as an independent legal entity owned by shareholders. It is a complex business structure. And it is one that is advised for companies with many employees due to its legal and financial requirements.

Limited Liability Companies (LLCs)

An LLC is a type of business structure that is more flexible when it comes to taxation and administrative procedures. LLCs protect your personal assets throughout bankruptcy and lawsuits processes. In several states, LLCs can be owned by non-U.S. residents and have a limited life.

Obtain the right identifications

After you’ve gotten your ITIN, you must obtain an Employer Identification Number (EIN), which is used to identify business entities. The IRS provides further information regarding this process.

After you’ve gotten your ITIN, you must obtain an Employer Identification Number (EIN), which is used to identify business entities. The IRS provides further information regarding this process.

Register your business 

If you are conducting business yourself, with no employees, you don’t have to take this step. The same goes for the EIN. The SBA indicates that you can register your business with:

• Federal agencies: mostly done to protect a trademark or receive tax exemption.
• State agencies: a step that LLCs, corporations, and partnerships must take.

Assign a registered agent

A registered agent is always needed when building an LLC, corporation, or partnership. Registered agents must live in the state your business is located. This agent is in charge of receiving the business’ official papers and legal documentation.

Open a business bank account

When you create an LLC or a corporation, it is necessary to set up a business bank account. Setting up this type of account also helps you:

• Keep your taxes and bookkeeping processes organized.
• Keep your personal and business expenses separate.
• Have a more professional business in the eyes of clients and immigration entities.

Final notes

Starting a business in the United States is one of the ways to acquire a legal status in the country. It is not necessary to have a Green Card or any other legal status to do so, but it is important you start the process of having one the right way. There are several steps you need to follow, and they are not always easy to navigate. Therefore, receiving guidance from professionals related to this matter is key. At Castro Law, we’re committed to helping you obtain a legal status the right way. Contact us, and we will discuss your possibilities.