Important Information for New York Foreign Nationals!
When foreigners form companies in the United States, many different factors must be taken into consideration before making a final decision. Here we will explain some of the different issues you should think about before you form your company. Please remember that this is general information and does not replace a personal consultation with an attorney. If you would like to become a member of our General Counsel Club, you can pay $139.95 over the phone with a credit card and get unlimited telephone support for the whole year! You may call 1 800 734 9900 to sign up now.
Generally, foreigners either register Limited Liability Companies or New York Corporations. United States Tax laws require that foreigners pay taxes on any earnings made in the United States. Regardless of their immigration status, the United States will let you form a company here as long as you register for a Taxpayer Identification Number. The process to register is not complex. Once your application is submitted, it can take up to 18 weeks for your Taxpayer Identification Number to be assigned. Our fee to initiate this process is $50. You must have this number in order to file the proper tax returns for the corporation and in some cases it is necessary in order to obtain a Federal Identification Number which is similar to a Social Security Number that is assigned to the corporation.
Corporation Vs. Limited Liability Company
Pay State Corporate Income Tax at the highest state tax rates
Have less paperwork in terms of Tax Returns that need to be filed
Foreigners do not have to pay taxes under the corporation unless the corporation declares dividends
Owners may act as Consultants to the Corporation under a written Consultants agreement completing all consulting work within their home country and billing the corporation in the United States for this service. Utilizing this strategy, it may be possible to eliminate any profits and all taxes otherwise payable.
Limited Liability Companies
Pay very low state income taxes, and Limited Liability Companies are exempt from Federal Corporate Tax, the LLC pays no Federal Corporate tax.
Profits, whether distributed or not, are taxed and the Owners of the LLC must pay tax at the personal level at their individual tax rate
Have to file both a Partnership Tax Return for the LLC, and Tax Returns for each member
While partnership tax rules are generally more flexible, the LLC should be owned by more than one person or entity to ensure classification as a Partnership for tax purposes.
Owners may act as Consultants to the LLC under a written Consultants agreement completing all consulting work within their home country and billing the LLC in the United States for this service. Utilizing this strategy, it may be possible to eliminate any profits and all taxes otherwise payable.
We can file a New York Corporation or a Limited Liability Company for Foreign Nationals. Included in these fees are the State Filing Fees and the Attorneys Fee, and you will receive the Articles of Incorporation or Organization, the Corporation or Company Minutes, By-Laws, Kit, Membership Certificate, Seal and a preliminary name search.
Both types of companies have the same type of legal protection in terms of the liability of the owners. Therefore, which one you choose depends on your business activity and projected profits. If the company is going to have little activity in the United States and fairly small amounts of money will be made you may form a regular corporation which has a simpler record keeping process. If the company grows and earns large sums of money, you may always register an LLC in the future. If you expect to have large amounts of profits right away, you will generally pay less taxes with the Limited Liability Company although more paperwork will have to be prepared for the IRS.
Federal Tax ID Number
The equivalent of a social security number for a Company. You will need it to operate your business and open a bank account for the Company. We can obtain this number for you $35. The application for this number requires either the social security number of one of the officers of the corporation or if all the officers are foreigners, it requires the Taxpayer Identification Number of the foreign officer. We can initiate the documentation to obtain this for you at a charge of $50.
You have 3 options to choose from when you form your company:
You can form your corporation or LLC and apply for a Taxpayer Identification number, wait for that number to be assigned (which can take up to 18 weeks) and then apply for the Federal Id number and wait at least another 2 weeks for that by mail.
You may list a friend or family member who has a Social Security Number as the Secretary or Vice President of the company in order to obtain the number
You may order one of our REDI CORPS with a Federal Identification number included.
SPIEGEL & UTRERA, P.A. 1 800 576 1100.