How to Start a Business in the U.S. as an International Student?

This article provides a detailed guide on the process for international students to start a company in the U.S., explaining the latest regulations for 2024.

Foreigners are allowed to start a business in the United States. There are two types of corporations in the U.S.: C Corp and S Corp. However, only U.S. citizens or green card holders can start an S Corp, so international students should only consider starting a C Corp.

The U.S. has relatively lenient regulations for starting a company, relying on the legal system to address any misconduct that occurs. In the U.S., businesses have sufficient freedom to operate as long as they do not cause problems; however, if issues do arise, they will face legal consequences.

Process for Starting a Company in the U.S.

Step 1: Choose your company type.

• For most international students, an LLC (Limited Liability Company) is recommended. It is convenient, cost-effective, and relatively easy to dissolve if necessary.

• However, if you are considering immigration, an LLC may not be the best choice. For specific details, it is advisable to consult with a Certified Public Accountant (CPA).

Step 2: Choose a name for your company.

• After deciding on a name, check its availability on the official website of the Department of State Corporation, State Records and UCC (Uniform Commercial Code).

Step 3: Submit "Articles of Organization" on the government website of your chosen state.

• Requirements and fees vary slightly by state. Some states charge less for the establishment of a company while requiring an annual review fee.

• Choosing a registration location depends on where you have a permanent address, as the legal entity needs to provide proof of a permanent address.

• If you do not have a permanent address or legal representative, consider hiring a registered agent. Registered agents can help you manage legal documents and paperwork on behalf of your business. Hiring one usually costs several hundred dollars.

• If you want to fill out the "Articles of Organization" yourself, you can search "Articles of Organization + [your state name]" on Google to find your chosen state's template. Regarding the "Purpose of Business" section, it can be written in a general way—even stating "to engage in any lawful business in [state name]" is acceptable.

Step 4: You will receive a notification letter from the state government informing you that your company has been successfully established.

• This typically takes 7-14 business days.

Step 5: Set up a company bank account.

• If you have an SSN, this process can be straightforward. Go to the IRS website and complete the "EIN Application" to apply for a tax ID number for your company. After selecting the type of company and filling out the information online, you will immediately receive your tax ID number. Then, you can use this tax ID number to create a company bank account.

• Most banks offer business accounts, allowing you to apply for a business credit card to earn cash back on company purchases such as computers or office supplies. In some cases, business expenses can be tax-deductible. It is important to keep your business and personal expenses separate, even if you are the sole owner, to avoid issues when filing taxes.

• You might also consider using your bank’s payroll service for your business account. By paying yourself a salary, you can maintain clear financial records, which will make your company appear more professional and make tax filings easier.

Step 6: Annual Report

Most states require companies to submit an annual report. This report is quite simple—it can be a summary of your company's operations for the year.

*The steps above are shared by a student. Since starting a business can impact your legal status and tax obligations, it is recommended to consult with an accountant and an immigration lawyer in advance.