REGISTERING YOUR BUSINESS IN THE #USA FOR #SRILANKANS! As promised, here is a 🧵 on how you can register your business in the USA and open yourself to a global market of potential customers, accept foreign payments and open a US Corporate bank account!
Please note that since this is a thread, I have simplified the entire process here. There may be a few extra steps, which ARE NOT substantial. Once you go through this, I will host a Twitter Space to answer your questions. And before we start, total cost for this is under $400.
First things first. The actual legislation can get a bit confusing, and there are different types of business entities you can set up. For the sake of simplicity, I will assume most of you are single-owner businesses and SMEs. Therefore, a Single-Owner LLC is the way forward.
A Single-Owner LLC, as the name states allows the business to have one owner only. The main benefit of this business entity is that as a foreigner, you are not entitled to pay corporate tax or any other form of taxation under 3 main conditions.
(1) You DO NOT have an employee/company based in the US working for you.
(2) This employee/company DOES NOT substantially contribute to your business.
(3) You ARE NOT are engaged in “considerable, continuous, and regular” business in the US.
Legally, there has not been a clear definition of what “considerable, continuous, and regular” business in the US is. However, after speaking to numerous lawyers and business experts in the USA, I can confirm that services "PERFORMED FROM ABROAD" are generally not taxable.
Services such as personal services performed from abroad, selling digital products, web design etc, or selling physical products if the shipping point is from outside of the US is not taxable. However, an eg: if you use Amazon's warehouses and ship, you are liable to pay tax.
Right, now that the confusing part is out of the way, generally as a Sri Lankan you can opt to register your business in either Delaware or Wyoming. I would recommend Wyoming as it is faster and has NO CORPORATE TAX.
wyomingllcattorney.com/Wyoming-Registered-Agent/Business-Tax
However, if you are a startup that may one day look for VC funding, apply in Delaware as a C-Corp. There are numerous benefits. This is a completely different topic. If interested let me know, I will do a new thread.
delawareinc.com/blog/why-venture-capitalists-prefer-delaware-c-corps/
When it comes to registering your business in the USA, you ARE NOT REQUIRED TO HAVE ANY CAPITAL UPFRONT. The application is very straightforward. You have to submit your personal identification details first, and you can then apply for the official business registration.
It can take about 5 to 10 working days to get your official business reg. Once you do, your next step is to apply for something called the EIN (Employer Identification Number) from the IRS. The EIN is the most important thing you need.
You are not permitted to open a bank account without an EIN. You pretty much cannot do anything else without it. When it comes to applying for the EIN, have a GOOD social media presence that is active. If possible, a website is even better too. Do this prior to applying.
Remember, the IRS is checking to make sure that you are a legitimate business. Even if you are just starting out, ensure you have your primary social channels such as FB, Insta, Twitter and LinkedIn set up with the basics like logo, cover image, address, and a few posts.
The EIN can take 15 to 20 working days. Once you get your EIN you are golden 🏆 That is it. Along with this, you will receive your other official documents such as the corporate agreement, company bylaws etc digitally. You are now ready to do business with the global market 👊
There are numerous options when it comes to opening a corporate bank account. I would recommend Mercury. Mercury is a completely digital bank, with very low fees, and you can get a debit card shipped to you allowing you to withdraw funds from Sri Lanka.
mercury.com/
Once you get your bank account, you can then set up a payment processor so that you can ask your foreign clients to pay via CC or debit card so you can accumulate $ 🤑. I would suggest Stripe start off as a payment processor. Relatively low fees, however there are other options.
How to proceed? Use FirstBase. (firstbaseio.grsm.io/yy055oen2b2t)
I used them, they were reliable and very responsive. Use the link below, you get 5% off, and I get $40. I WILL BE DONATING EVERY $ I GET BACK TO THE #GALLEFACEPROTEST & #GOTAGOGAMA. firstbaseio.grsm.io/yy055oen2b2t
I will document a separate thread if anyone does use the link above to register, and I will be crystal clear with where the donations are going.
As always, if you found this 🧵 do let me know. If you have any questions just leave a reply below, and I will respond! 😁👊