The Field Guide
Most guides about starting a U.S. company are written for Americans. They never say so. They just assume it.
So we answer every term twice. Once for people the IRS counts as a U.S. person. Once for founders who are not. When the rule is the same for both, we say that too.
Every page shows the date we wrote it, the date we last checked it, and the government pages we used.
90 terms
Cross-Border
Who the IRS counts as a U.S. person, and what changes if you are not one. Start here if you are not sure.
- 30% Withholding on Nonresident AliensU.S. payers must take 30 percent out of certain payments to foreign people and send it to the IRS. If the IRS counts you as a U.S. person, this rule does not apply to you at all.Rules differ
- BOI Report (Beneficial Ownership)The report to FinCEN that lists the people behind a company. Since March 2025, companies formed in the United States do not file it at all.Same either way
- Effectively Connected Income (ECI)If you are not a U.S. person, the United States taxes your U.S. income in one of two ways. ECI is the one that lets you deduct your costs.Rules differ
- FDAP IncomeU.S. source income that is not connected to a U.S. business is taxed at 30% of the gross amount. Your costs do not reduce it, and the payer withholds it before paying you.Rules differ
- Nonresident AlienThe IRS calls you a nonresident alien if you are not a U.S. citizen and you fail both residency tests. It is a tax label, not an immigration label, and it decides which forms you file.Rules differ
- Permanent EstablishmentA word that only exists inside a tax treaty. If you live in a treaty country, it is the single test that decides whether the United States may tax what your business earns.Rules differ
- Resale CertificateA form you give your supplier so they do not charge you sales tax on goods you are going to resell. It is a state document, and your federal tax residency has nothing to do with it.Same either way
- Sales Tax NexusThe link between your business and a U.S. state that lets that state force you to collect its sales tax. It is decided state by state, and your tax residency has nothing to do with it.Same either way
- Substantial Presence TestA day-counting formula that turns a foreign founder into a U.S. resident for tax. Nobody tells you when you cross the line.Rules differ
- Tax TreatyAn agreement between the United States and another country that can lower U.S. tax on certain kinds of income. Most of the benefit goes to people the IRS does not count as U.S. persons.Rules differ
- U.S. Person (for tax purposes)The IRS has its own definition of who is American. It is not about your passport, and it decides which rules apply to you everywhere else in this guide.Rules differ
- U.S. Trade or BusinessThe phrase in the tax code that decides whether the United States can tax a foreign person's business income at all. If the IRS already counts you as a U.S. person, it decides nothing about you.Rules differ
Entities & Structure
The types of company you can set up. Some of them are closed to non-residents.
- C CorporationThe standard U.S. corporation. It pays 21 percent tax on its income, and owners pay tax again when they receive dividends.Rules differ
- Corporate VeilA company's liability shield can be broken if the owner uses it to hide or commit fraud. Here is what courts actually look for, and what does not matter.Same either way
- Disregarded EntityA company with one owner that the IRS does not treat as a separate taxpayer for income tax. It is still a separate entity for several other taxes, and for one information return.Rules differ
- Double TaxationA C corporation pays tax on its profit first, then shareholders pay again on what is left once it is distributed. Non-resident shareholders pay a flat 30% on that second layer instead of filing a return.Some differences
- General PartnershipTwo people running a business together. Most of the time, this happens automatically without any paperwork. When it does, both of you have unlimited liability for what the business owes.Same either way
- Limited Partnership (LP)A partnership where some owners have capped liability, as long as they do not take control of the business.Same either way
- LLC (Limited Liability Company)A business structure where your personal assets are protected from company lawsuits. How you pay tax on it depends on your country of residence.Rules differ
- LLP (Limited Liability Partnership)A partnership where partners are not personally liable for the company's debts or each other's misconduct.Same either way
- Multi-Member LLCTwo or more owners in a U.S. LLC means the IRS taxes it as a partnership by default, not a corporation, until someone files to change that.Some differences
- Pass-Through TaxationThe company itself does not pay income tax. Its profit passes straight to the owners, who report it and pay the tax.Some differences
- PLLC (Professional LLC)A PLLC is not one national entity type. California bans LLCs from professional practice outright, Delaware has no separate PLLC law at all, and Wyoming folds the rule into its regular LLC statute.Same either way
- S CorporationA tax election you file with the IRS, not a company you register with a state. The law says a nonresident alien cannot be a shareholder, so the election is closed to most founders living abroad.Rules differ
- Series LLCOne LLC that holds multiple separate bundles of assets, with debt in each bundle isolated from the others.Same either way
- Single-Member LLCThe IRS ignores a single-member LLC for tax purposes by default. If the owner is a foreign person, that default comes with a separate filing requirement anyway.Rules differ
- Sole ProprietorshipIf you do not form an LLC or corporation, you are one automatically. There is no paperwork with any state, but taxes require Schedule C.Some differences
Formation & State Rules
How you register the company with a state, and what the state asks for.
- Articles of OrganizationThe legal document you file with the state to create an LLC. The rules are not the same in every state, but who can sign it is the same everywhere.Same either way
- Business LicenseA government permit to operate a specific type of business in a specific place. Which government, and what kind of permit, depends entirely on your industry and location—not on you.Same either way
- Business Name ReservationA way to hold a business name before you incorporate. The time limit is different for each state.Same either way
- Certificate of AuthorityThe document you file with a state to let your corporation or LLC do business there. The document's name changes depending on your state and company type.Same either way
- Certificate of Good StandingA document proving your company paid all required taxes and fees and filed all legally required forms.Same either way
- Certificate of IncorporationThe legal paper that brings a corporation to life. Unlike other business choices, your address and nationality do not matter.Same either way
- Corporate BylawsRules that tell your company how to hold meetings, elect directors, and make decisions. The public never sees them, and they have no location requirement.Same either way
- DBA (Doing Business As)A DBA lets you operate under a different name than the one on your formation papers. The rules for filing one have nothing to do with your residency, and everything to do with which state and county you are in.Same either way
- Foreign QualificationRegister your LLC in one state, then actually do business in another, and that second state can require its own registration. Nothing about this depends on where you live.Same either way
- Franchise TaxA yearly fee for keeping your company registered in a state, charged whether or not you made a single dollar. It has nothing to do with franchises.Same either way
- Incorporator vs OrganizerThe person who signs the paperwork to create a business entity. The role ends after the company is formed.Same either way
- Operating AgreementThe internal document that says who owns your LLC and how it runs. No state makes you file it, but a company with none in writing is harder to explain to a bank or a court.Same either way
- Secretary of StateThe government office that registers your company in a state. Most states call it the Secretary of State, but the agency you actually deal with, and its website, can carry a different name.Same either way
- State Filing FeesEvery state charges a fee to form your company. The three most common states charge different things for different documents, and the numbers are not the whole cost.Same either way
- Which State to Form Your LLC InDelaware and Wyoming charge less in their own state taxes. That does not mean you owe nothing to the state where you actually run the business.Rules differ
Address & Public Record
A company needs more than one address. This explains which is which, and which ones anyone can look up.
- Business Mailing AddressThe address on your EIN paperwork where the IRS sends mail. It can be a P.O. box. A different line on the same form cannot be.Same either way
- PO Box for an LLCThe answer depends on which line of which form you are filling in. A PO Box works on some, and is banned outright on others.Same either way
- Principal Place of BusinessThere is no single legal definition. At least three different rules use this phrase, and they can point to three different addresses.Same either way
- Registered AgentThe person or company that accepts legal papers for your business. If you live outside the United States, you almost always have to hire one.Rules differ
- Registered OfficeThe address your state keeps on file for your company. It does not have to be where you work, and in most states it does not even have to be inside the country you live in.Same either way
- Service of ProcessThe legal delivery of a lawsuit to your company. The rule is the same for everyone, resident or not, and it has a backup path that works even if you never see the papers.Same either way
- Virtual Business AddressA business that receives mail on your company's behalf is a CMRA under federal postal rules, and that status comes with a specific ID-check form, not a simple sign-up.Same either way
- Which Business Addresses Become Public RecordYour LLC files several different addresses. Which ones the public can see depends on the state and the paperwork, not on where you live.Same either way
Tax IDs & Elections
The numbers the IRS issues you, and the choices you make about how you are taxed.
- EIN (Employer Identification Number)The number the IRS uses to identify your company. Everyone gets the same number, but not everyone is allowed to use the same application.Rules differ
- Form 2553 (S Corporation Election)The form a corporation files to be taxed as an S corporation. One shareholder who is a nonresident alien makes the whole company ineligible.Rules differ
- Form 8832 (Entity Classification Election)Every company already has a tax classification that the IRS assigns automatically. Form 8832 is how you override it, and you can only backdate the change by 75 days.Some differences
- Form SS-4The IRS form you use to ask for an EIN. Two conditions decide whether you get the number in one sitting or wait weeks for the paper form to come back.Rules differ
- How an LLC Is Taxed (Classification)An LLC has no tax type of its own. The IRS gives it one by default, based on how many owners it has, and you can change it by filing a form.Some differences
- ITIN (Individual Taxpayer Identification Number)A nine-digit IRS number for people who must appear on a U.S. tax filing but cannot get a Social Security number. If you can get an SSN, you cannot get an ITIN.Some differences
- Responsible Party (on Form SS-4)Form SS-4 asks for the name and tax number of one individual who controls the company. Your agent, your lawyer and your formation service do not qualify.Some differences
- SSN and Your BusinessNo. An SSN is a personal number tied to permission to work in the United States. Your company gets its own number, and it does not depend on yours.Rules differ
Filing Forms
The forms you have to file, when they are due, and who has to file them.
- Form 1040-NRThe personal income tax return for a nonresident alien. If you run a business in the United States and the IRS does not count you as a U.S. person, this is your return instead of Form 1040.Rules differ
- Form 1065The return a partnership files. The partnership pays no tax on it, but filing late is charged per partner, per month.Some differences
- Form 1099-KThe form your payment processor or marketplace sends to you and to the IRS. Payment apps and marketplaces report once they pay you more than $20,000 across more than 200 transactions. Card processors report with no threshold at all.Same either way
- Form 1099-NECThe form a U.S. business sends when it pays a contractor. The amount that triggers it is now $2,000, not $600, and it is not the form used for foreign contractors.Rules differ
- Form 1120The income tax return a U.S. corporation files. Owning it from abroad changes nothing about this form. What changes is whether your company is a corporation in the first place.Same either way
- Form 5471An information return that certain U.S. persons file about a foreign corporation they own, run or hold shares in. Missing it costs $10,000 a year, even when you owe no tax.Rules differ
- Form 5472An information return the IRS requires from U.S. companies that have a foreign owner. It reports transactions, not profit, and missing it costs $25,000 for the year.Rules differ
- Form 7004 (Filing Extension)Form 7004 gives a business return an automatic six-month extension. It does not give you more time to pay the tax, and that is where most people get hurt.Same either way
- Form W-8BENA foreign individual gives this form to the U.S. company that pays them. It proves you are not American and it is how you claim a tax treaty rate.Rules differ
- Form W-8BEN-EThe certificate a foreign entity signs to prove it is foreign. You hand it to the company paying you, not to the IRS, and without it the payer may hold back 30% of the payment.Rules differ
- Form W-9The one-page form a U.S. payer asks for before they pay you. Signing it declares that you are a U.S. person. If you are not one, you owe them a W-8 form instead.Rules differ
- Pro Forma Form 1120A single-member LLC owned by a non-resident has no tax return of its own. So the IRS makes it file a nearly blank Form 1120, only to carry Form 5472.Rules differ
- Schedule CThe page where a sole proprietor, or the owner of a single-member LLC, reports what the business earned and spent. The form is the same for everyone. What you attach it to is not.Some differences
- Schedule K-1If you own part of a U.S. partnership or a multi-owner LLC, the business reports your share of its income to the IRS on a Schedule K-1 and sends you a copy. You do not attach that copy to your own return.Some differences
Banking & Payments
Opening a U.S. bank account and getting paid. This is where non-residents get stuck.
- ACH vs Wire TransferTwo systems, two speeds, and two different rules when something goes wrong.Same either way
- Bank KYC (Know Your Customer)Two federal rules tell a bank what it must collect before it opens your business account. Almost everything else the bank asks for is its own policy, and the two are worth telling apart.Some differences
- D-U-N-S NumberA private credit reporting number that federal contractors once needed. Since 2022, the government issues its own ID instead.Same either way
- Merchant AccountA merchant account is how you get paid when customers pay with a credit or debit card. No government agency approves it. Approval is a contract decision made by a bank.Same either way
- Payment Processor Approval (Stripe, PayPal)The approval or rejection you get from Stripe or PayPal is a private underwriting decision, not a government registration. The rules behind it are the same for U.S. and non-U.S. founders.Same either way
- U.S. Business Bank AccountFederal law makes every U.S. bank verify who you are before it opens a business account. It does not say you have to live in the country, but it does require an EIN and enough documentation to satisfy the bank.Same either way
Maintenance & Closing
What you have to do every year to keep the company alive, and how to close it properly.
- Administrative DissolutionA state can strip your company of its legal existence for missing a fee, a filing, or a registered agent. What triggers it, and what it is called, changes by state.Same either way
- Amending Your ArticlesYour company's founding document is public. To change it, you file an amendment. Who has to approve it first depends on whether you have an LLC or a corporation, and on what you are changing.Same either way
- Annual ReportEvery state expects something from your company every year. What it expects, and what it costs, depends entirely on where you formed the company.Same either way
- Certificate of DissolutionThe official form that permanently closes a company and removes it from the state's records. It works differently for corporations and LLCs.Some differences
- Changing Your Registered AgentThe process is different for corporations and LLCs, because the agent is recorded in a different document for each.Some differences
- Corporate ResolutionThe written document that records a company decision made without gathering in a room. If even one director refuses to sign, the decision fails.Same either way
- Final Tax ReturnClosing your company with the state does not close it with the IRS. Which final form you owe depends on how your company is taxed, and there are three different answers.Rules differ
- Meeting MinutesThe record of what your company decided. An LLC does not need one by law. A corporation does.Rules differ
- ReinstatementThe process that restores a company the state canceled for missing a filing. It does not depend on where you live.Same either way
- Transferring LLC Membership InterestHanding over your share of an LLC moves the money, not the votes. And if the seller is a foreign person, the buyer may have to withhold 10% of the amount realized and send it to the IRS.Rules differ
- Voluntary DissolutionClosing your company on purpose, not because you missed a filing. An LLC and a corporation dissolve under different rules, and neither rule depends on where you live.Some differences
- Winding UpThe legal process a company goes through after members agree to close it, and why the company still exists during that process.Some differences