Top 7 Myths About Starting a Business in the USA as a Foreigner

Starting a business in the USA as a foreigner is easy. Said no entrepreneur ever.

It’s equal parts exciting and scary. Yet it holds immense potential. 

However, several myths and misconceptions often deter or mislead aspiring international entrepreneurs. 

In this blog, we’ll debunk these common myths, present the facts, and explain how doola can help streamline the process for non-natives looking to establish businesses in the US.

Myth 1: You Need to Be a US Citizen to Start a Business

Fact

You do not need to be a US citizen to start a business in the USA. Foreigners can legally own and operate businesses in the US.

Explanation

The US offers a welcoming environment for international entrepreneurs, with various visa options like the E-2 Investor Visa, which allows foreign nationals to invest in and manage a business in the US.

As long as you follow the proper legal procedures, including business registration and tax compliance, you can successfully start and run a business in the US.

🇺🇸 The doola Mythbuster

doola provides comprehensive services for foreigners looking to start a business in the US.

From forming an LLC to handling tax compliance, doola simplifies the process, ensuring you meet all legal requirements. 

Over the years, doola has empowered several non-native founders to build a thriving business in the US following a few simple steps.

Myth 2: Starting a Business in the US Requires Complex Legal Processes

Fact

While starting a business in the US involves several steps, it is not as complex as it might seem.

With the right resources, the process can be straightforward.

Explanation

The key steps in starting a business include choosing a business structure, registering the business, obtaining necessary licenses, and fulfilling tax obligations.

Although these steps may appear complex, streamlined solutions are available to efficiently guide you through each stage.

🇺🇸 The doola Mythbuster

doola offers step-by-step guidance on starting a business, including business registration, obtaining an Employer Identification Number (EIN), and other essential tasks. 

Check out doola’s guide to starting a business.

Myth 3: You Need a US-Based Business Address and Phone Number

Fact

While having a US-based business address and phone number can be beneficial, it is not always mandatory for all businesses.

Explanation

Some business structures and types, such as online businesses or digital services, may not require a physical US address.

However, having a US address can be advantageous for receiving official documents and establishing credibility.

🇺🇸 The doola Mythbuster

doola provides a shared US virtual business address (check all our plans).

We can help you acquire a physical address/utility bill (for an additional cost) through our partners at Virtual Post Mail.

Myth 4: Foreign Entrepreneurs Cannot Open a Business Bank Account

Fact

Foreign entrepreneurs can open business bank accounts in the US, although the process might involve additional steps.

Explanation

To open a business bank account, you typically need to provide identification documents (valid passport), your business’s legal formation documents, a business license, and an EIN.

Some banks may have specific requirements or additional procedures for foreign entrepreneurs.

🇺🇸 The doola Mythbuster

doola assists with the paperwork and requirements needed to open a business bank account, ensuring a smoother process for foreign entrepreneurs. 

Non-native founders without a Social Security Number (SSN) need an Individual Taxpayer Identification Number (ITIN) to file US taxes.

doola assists with that too.

Myth 5: Foreigners Face Higher Taxes and Fees

Fact

Taxes and fees for foreign entrepreneurs are similar to those for US-based entrepreneurs, though there may be specific regulations and tax treaties to consider.

Explanation

Foreign entrepreneurs are subject to federal, state, and local taxes like their US counterparts.

However, tax treaties between the US and other countries can help mitigate double taxation.

Understanding the tax obligations for your specific business structure and location is essential.

🇺🇸 The doola Mythbuster

doola provides tax compliance services to help foreign entrepreneurs navigate the complexities of US tax laws and ensure they meet all regulatory requirements. 

You may need an operating agreement based on the nature of your business and the state you want to open your LLC.

It outlines the ownership structure, decision-making and profit-sharing processes, and management roles of your LLC.

doola helps non-US founders draft legit operating agreements that prevent member disputes and compliance issues in the future.

Myth 6: You Must Have a US-Based Co-Founder or Partner

Fact

A US-based co-founder or partner is not required for starting a business in the US.

Explanation

While having a local partner can be beneficial for networking and local insights, it is not mandatory.

Foreign entrepreneurs can fully own and operate a business in the US independently.

🇺🇸 The doola Mythbuster

doola supports foreign entrepreneurs in all aspects of business formation and management, whether or not they have a US-based partner.

Myth 7: Foreign Entrepreneurs Go Through a Complex Visa Process

Fact

While certain visas are required for operating a business in the US, there are options available that simplify the process for foreign entrepreneurs.

Explanation

The E-2 Investor Visa is a popular option for foreign entrepreneurs looking to start or invest in a US-based business.

It allows for easier entry and management of a company, provided the investment meets specific criteria.

🇺🇸 The doola Mythbuster

doola provides guidance on the visa application process and helps ensure that you meet all the requirements for establishing your business in the US. 

Debunk with doola: Form Your LLC Today

Starting a business in the US as a foreigner comes with its challenges, but many myths surrounding the process can lead to unnecessary confusion and hesitation.

By debunking these myths and understanding the facts, you can confidently pursue your entrepreneurial ambitions in the US.

doola is here to support you every step of the way, from LLC formation and virtual office solutions to tax compliance and business banking.

With doola’s expertise and resources, you can successfully navigate the complexities of starting a business in the US and focus on growing your venture.

Ready to get started?

Book a free consultation and take the first step towards establishing your US-based business today.

Let’s doola it!

FAQs

Can I run my US LLC from overseas? 

Absolutely. If you can run your firm from your native country, you can work from there.

You’ll need to secure a visa or green card to work in the United States, but once you do and set up your LLC, you’ll be allowed to run it as a citizen, with the exclusions indicated in the blog above.

What are some of the best states for a foreigner to form an LLC?

Florida, Texas, Nevada, and Wyoming are some of the best states to form an LLC.

Can non-American business owners apply for an EIN?

You cannot obtain an EIN like Americans.

Still, you must obtain a taxpayer identification number, or TIN, from the IRS (Form W-7) to conduct business in the United States and be taxed appropriately.

Do I need a registered agent for an LLC as a non-resident?

Yes, every LLC requires a registered agent, regardless of the owner’s location.

This individual or entity is your official contact point for legal and government communications.

How long does forming an LLC as a non-resident typically take?

LLC formation for non-residents typically takes four weeks on average. However, if you have a Social Security number, it could be formed in a week.

Can a non-resident LLC owner obtain a US business visa?

A non-resident LLC owner could apply for a US business visa.

Depending on your situation and how long you plan to stay in the US, you could apply for a B-1 business visa or an E-1 or E-2 investor visa.

Can a non-resident LLC owner obtain US government contracts?

While it’s possible, securing government contracts often requires additional qualifications and certifications, including being a US citizen or permanent resident in many cases.

Can a non-resident LLC owner hire employees in the US?

Definitely. As an LLC owner, you can hire US employees, but you must comply with US employment laws, including tax withholdings and benefits.\

Can a non-resident LLC owner apply for US trademarks or patents?

While you cannot file for the US trademark or patent directly without a US domicile address, a US-based lawyer could file for the trademarks or patents on your behalf.

What happens if a non-resident LLC owner becomes a US resident or citizen?

If a non-resident LLC owner becomes a US resident or citizen, they must abide by US laws and file appropriate forms related to pass-through LLC taxation.

Can a foreigner be a partner in an LLC?

Yes, a non-resident or foreigner can be a partner or member of an LLC.

Which bank can I open a business account online?

Many banks, including Bank of America, Chase, and Wells Fargo, offer online applications for business accounts.

You can also check with local banks for their online options.

How to open a small business bank account online?

Opening a business bank account online is simple.

Submit your application and business documents online and wait for the bank’s approval, which usually takes 2-4 business days.

Can I open a joint business bank account online?

Some banks allow joint business accounts to be opened online, while others may require both parties to visit a branch. Check with the bank for specific requirements.