Most foreign nationals choose to establish a C corporation, which can expand by offering unlimited stock and is typically more attractive to outside investors, even though its profits are taxed twice, first at the corporate level, and then as dividends to shareholders.
For corporate shareholders, the advantages are usually clear: Corporate shareholders typically qualify for a lower dividend rate. Even individual foreign owners are probably best off with a C corporation since the structure will shield them from direct I.R.S. scrutiny.
Of course, C corporation owners pay more for that shield as a result of the double tax. But in many cases, tax planners can use salaries, pension costs, and other expenses to reduce corporate income and eliminate much of the double taxation.
The forms and other requirements for forming a business entity vary somewhat by state. Here’s how incorporation works in Delaware, which serves as a simplified model for many states:
An Employer Identification Number is necessary not just to hire workers, but to open a bank account, pay taxes or often to get a business license. We obtain one for you.
In most cases, foreigners with business or investments in the United States should set up a domestic corporation. Consult with experts on tax law in both your home country and the U.S. before taking the plunge, as the rules for foreign nationals can be more complex than if you were a citizen. We help with incorporating your U.S. based business, provide access to a tax professional, draft all necessary legal contracts, and provide counsel on the ins and outs of how to run your U.S. company successful.