| Area | Details |
|---|---|
| Education | JD, University of Pennsylvania Carey Law School | MBA (Finance), The Wharton School, University of Pennsylvania | Chartered Accountant (ICAEW) |
| Financial Training | Completed Analyst Training Program at a major international bank | Chartered Accountant background with professional training in financial analysis and reporting |
| Legal Practice | Admitted to practice in Georgia (USA) | Registered Solicitor with the Law Society of England and Wales | Former CMBS lawyer at one of the world's largest international law firms |
| Immigration Track Record | 15+ years advising HNW investors | Zero denials for clients advised on source-of-funds compliance in EB-5 | Hundreds of successful immigration cases globally |
| Recognition | Named a Top 25 EB-5 Immigration Attorney by EB5 Investors Magazine (2018–2023) |
| Professional Engagements | Lecturer/trainer for other lawyers at AILA, ACA, University of Pennsylvania Law School | Frequent speaker at global investment immigration conferences |
How to Open a Business in the United States in 2026
Frequently Asked Questions About Opening a Business in the United StatesOptions for Indian Entrepreneurs and Business OwnersEB-5 DirectE-2 Visa GuideL-1 Visa Guide
Key Takeaways
- Forming a U.S. company is often simple; maintaining proper compliance is where most founders run into issues
- Each state has different procedures and requirements
- The lowest cost state involves more than just state income tax
- Delaware is frequently not the best state for many businesses
- Entity choice, state selection, and governance decisions have long-term consequences
- Standard "one-size-fits-all" forms can cause serious issues, especially if the business supports a visa application
- Well-drafted employment and contractor agreements are essential from day one
Table of Contents
- ► How Long Does it Take to Form a Business?
- ► Step 1: Choose the Right US Entity
- ► Step 2: Choose the Right State
- ► Step 3: Choose the Business Name
- ► Step 4: Form the Company and Appoint a Registered Agent
- ► Step 5: Get an EIN, Even Without an SSN
- ► Step 6: VIBE Registration (Immigration Purposes)
- ► Step 7: Banking and Payments Setup
- ► Step 8: Core Documents You Should Have From Day One
- ► Step 9: Compliance You Cannot Ignore
- ► If Your US Company Is Connected to a Visa Plan
- ► Our Entity Formation and Start Up Services
- ► Frequently Asked Questions
How Long Does it Take to Form a Business in the United States?
This varies from state to state and can be as fast as a few hours.
Davies and Associates advises founders and international companies on US entity formation, governance documents, contracts, and the ongoing compliance needed to operate confidently in the US market.
Davies and Associates advises founders and international companies on US entity formation, governance documents, contracts, and the ongoing compliance needed to operate confidently in the US market.
Quick overview of the formation path
- Choose the right entity type
- Choose the best state for your facts
- Form the company and appoint a registered agent
- Get an EIN
- Set up banking and payments
- Put governance and contracts in place
- Plan tax and compliance from day one
Step 1: Choose the right US entity
| ENTITY TYPE | LIABILITY PROTECTION | TAXATION STRUCTURE | IMMIGRATION APPLICABILITY |
|---|---|---|---|
| Sole Proprietorship | None. No legal distinction between owner and business. | Pass-through; taxed at individual rates. | Highly Discouraged. Signals "self-employment" rather than a real enterprise. Fails to provide the clear entity structure required for L-1 transfers. |
| Limited Liability Company (LLC) | High. Protects personal assets from business debts. | Flexible; pass-through or corporate election. | Excellent. Highly popular for E-2, New Office L-1 and EB-2 NIW due to flexibility. Allows for unlimited non-US citizen owners. |
| C-Corporation | Highest. Complete legal separation of assets. | Double taxation (corporate and dividend levels). | Often Used for L-1. Preferred for multinational transfers and venture-backed startups. |
| S-Corporation | High. Same protection as a C-Corp. | Pass-through; avoids double taxation. | Restricted. Non-resident aliens cannot be shareholders in S-Corporations. This may disqualify it for non-resident E-2 or L-1 investors. |
| Partnership (LP/LLP) | Variable. Varies based on partner type. | Pass-through to personal tax returns. | Risky. Can complicate the "at least 50% ownership" requirement for E-2 visas if not structured carefully with treaty-national partners. |
Most international founders choose one of these:
Limited Liability Company (LLC)Often preferred for flexibility and simpler formalities, especially for closely held businesses.
C corporation
Often used for venture-backed startups, equity compensation, and certain investor or exit structures.
We help you choose a structure that aligns with your operations, ownership, tax profile, and immigration goals.
Step 2: Choose the right state
- Where your business will operate
- Where your employees will be located
- Taxation considerations
- Requirements of any investors
- State and local licenses and regulations
- The cost of operations in different locations
- Proximity to customers and other business considerations
Common Mistake in Selecting a State
A common mistake is to elect a state with a low state income tax. This can be a mistake because:- If a business has operations or sales in a state, it will be required to file local taxes and will not easily be able to evade those responsibilities by incorporating in another state.
- Other costs, such as ad valorem property taxes and operating costs, may make a state with a low income tax rate less desirable.
Incorporation Example 1 - Local Regulations
Our Singaporean client wanted to establish an investment fund in the State of New York. Under New York State law, the client would be required to obtain expensive licenses.New Jersey did not have the same licensure requirements.
By locating the business just 10 minutes away in the State of New Jersey, the client was able to avoid complex licensing requirements.
Example 2 - Taxation
Our client intended to have all operations in the State of California to serve its clients, who were all located in California.The client had incorrectly read on the internet that incorporating in Nevada could enable them to lawfully avoid California taxes.
This is false. Our tax team explained that it is not possible to completely avoid California State income tax and other obligations where customers and the business operations are located in California simply by incorporating in Nevada or any other state.
The client incorporated in California and avoided the administrative burden of registering in two states.
| State | Corporate Income Tax (2026) | Franchise Tax | Personal Income Tax | Privacy Rank | Best For |
|---|---|---|---|---|---|
| Delaware | 8.7% (only if operating in DE) | $300+ annual fee | None for non-residents | ⭐⭐⭐ | VC-backed startups & IPO paths. |
| Wyoming | 0% | None | None | ⭐⭐⭐⭐⭐ | Lean E-2 startups & privacy. |
| Nevada | 0% | None (Commerce Tax only if >$4M rev) | None | ⭐⭐⭐⭐⭐ | Cash-strapped profitable firms. |
| Texas | 0% | 0.375% - 0.75% of revenue (approx) | None | ⭐⭐ | Logistics, Energy, & High-Growth tech. |
Common patterns:
- Delaware for venture-backed startups and standardized corporate governance
- Wyoming or similar low-overhead states for certain owner-managed businesses
- Your operating state when you will have offices, employees, or significant activity there
Step 3: Choose the Business Name
Choose a name.There are restrictions on names. The most significant one can be that the business name is not too similar to one already in use.
Go to the website for the relevant Secretary of State and search the business records to check if your chosen name is available in that State.
For example, in Delaware you can go to the Department of State: Division of Corporations search form. Enter the name you propose to use to see if it is already in use.
Note: In L-1 visa cases the name of the U.S. business can be but does not have to be similar to the name of your foreign business.
Reserve the Name
In many States you can make a "name reservation”. If you are not ready to form the business but want to reserve a name so only you can use it then a name reservation can be very helpful
Tip: Every State has a different registry of business names. That means that unless you take applicable steps an existing business name registered in State A can be freely used by another party in State B.
Step 4: Form the company and appoint a registered agent
Most states require a registered agent with a physical address in the state of formation to receive legal and government notices. We coordinate registered agent setup and file the formation documents correctly the first time.Step 5: Get an EIN, even without an SSN
An Employer Identification Number is the federal tax ID used to open bank accounts, hire workers, and file US tax forms. Foreign founders often cannot apply online and may need to use alternate IRS submission methods. We guide the EIN process and make sure the company record is consistent across agencies.How to Apply for an EIN (Employer Identification Number)
IRS Form SS-4Applications for an EIN are made using IRS Form SS-4.
Before you start, make sure you have:
- Your legal business name
- Your entity type (LLC, C-Corp, Partnership, etc.)
- Your state of incorporation (Delaware, NY, CA, etc.)
- The Responsible Party (a real human who controls the business)
- The business start date
- A U.S. or foreign address
Option 1: Online (Fastest – Same Day)
Best if the responsible party has an SSN or ITINWho can use this:
- U.S. citizens
- Green card holders
- Many visa holders
- Foreign founders with an ITIN
- Go to the IRS EIN Online Application
- Select your entity type
- Enter business details
- Enter the responsible party’s SSN or ITIN
- Submit
- EIN issued immediately
- Download the confirmation letter (CP 575)
- One EIN per responsible party per day
- The application only works during U.S. business hours
Option 2: By Fax (Best for Foreign Founders Without SSN)
Most common method for non-U.S. foundersWho should use this:
- Foreign founders
- No SSN
- No ITIN
- Outside the U.S.
- IRS Form SS-4
- Completed correctly (see details below)
- Fill out Form SS-4
- Write "Foreign" in the SSN/ITIN field
- Fax it to the IRS international fax number
- Usually 4–10 business days
- EIN returned by fax
- This is the most reliable method for non-U.S. founders.
Option 3: By Mail (Slow, but works)
Who should use this:- Anyone who can wait
- Backup option if faxing is not possible
- 4–6 weeks (sometimes longer)
- Mail Form SS-4 to the IRS international address.
Option 4: By Phone (Foreign Applicants Only)
Yes, this is real — and very IRS.Who can use this:
- Foreign founders
- No SSN or ITIN
- Call the IRS international EIN line
- Answer questions live
- EIN issued verbally
- Written confirmation mailed later
- Long hold times
- Must be available during U.S. hours
- Easy to mess up if you are unprepared
- Most founders prefer fax over the phone.
How to Fill Out Form SS-4 (Key Lines)
These are the lines people typically mess up:- Line 1: Legal name of the entity (must match incorporation documents)
- Line 2: Trade name (optional)
- Line 7a: Responsible party name (you)
- Line 7b: SSN/ITIN → write "Foreign" if you don’t have one
- Line 8a: Is this an LLC? → Yes/No
- Line 9a: Entity type (LLC, Corporation, etc.)
- Line 10: Reason for applying → "Started a new business"
- Line 18: Check "Yes" if this is a newly formed entity
Common Founder Scenarios
Foreign founder, Delaware C-Corp, living abroad
- No SSN
- No ITIN
- Apply by fax
- EIN approved without issue
Foreign founder, U.S. LLC (pass-through)
- EIN required
- ITIN may be required later for tax filing
- EIN still issued without an ITIN
L-1 / E-2 / O-1 founder in the U.S.
- Likely has an SSN
- Apply online
- EIN issued same day
After You Get the EIN
You’ll use it for:- Opening a U.S. business bank account
- Stripe, payments, and payroll
- Issuing invoices and tax forms
- Federal and state tax filings
Important Warnings (Please read)
- EIN ≠ work authorization
- EIN ≠ immigration status
- EIN ≠ permission to live in the U.S.
Step 6: VIBE Registration (Immigration Purposes)
USCIS verifies the legitimacy of a business in part by confirming it appears in VIBE (Validation Instrument for Business Enterprises). If you intend to use the business to support a visa application, it is important to ensure it is properly listed.Our firm can verify your VIBE status and ensure your business is listed in the databases USCIS uses.
Read our VIBE guide. Written by: Mark I. Davies, Esq., MBA (Wharton School), Fellow University of Pennsylvania Carey Law School. Ga. Bar License #: 250186, AILA Member, SRA ID: #384468.
Step 7: Banking and payments setup
Many founders form a US company primarily to access US banking and payment processors. In practice, account opening requirements vary by bank and by founder profile, and some providers may require additional identity and documentation.We help you prepare a bank-ready package, formation documents, EIN confirmation, ownership records, and supporting governance materials so you can move faster.
Step 8: Core documents you should have from day one
We draft and tailor the documents that protect founders, prevent disputes, and support future fundraising.Typical documents include:
- Operating agreement or bylaws and shareholder agreements
- Board resolutions and equity issuance documentation
- Founder vesting and IP assignment
- Employment and contractor agreements
- Form I-9s
- Customer and supplier contracts
- Lease review and commercial terms
- Cross-border contracting and dispute provisions
Step 9: Compliance you cannot ignore
Various Reporting and Compliance Requirements
US companies have ongoing compliance obligations that vary by state and by tax classification. We help you build a simple compliance calendar.One important reporting requirement involves
Beneficial Ownership Reporting
US beneficial ownership reporting rules involve reporting certain information on foreign-owned businesses to the U.S. Financial Crimes Enforcement Network (FinCEN).These rules have changed through regulation and litigation in 2025. Treasury and FinCEN have published an interim final rule narrowing reporting to certain foreign reporting companies, with agency guidance on deadlines for those entities.
We confirm what applies to your company based on your facts and the latest agency guidance. See US Financial Crimes Enforcement Network Notice.
If your US company is connected to a visa plan
Entity structuring is often part of an immigration strategy, especially for:- L-1 new office and related US expansion planning
- E-2 treaty investor planning
- EB-1C multinational manager planning
- EB-5 Direct businesses
Our entity formation and start up services
Depending on your needs, we can support:- Entity and tax structure planning
- Formation filings at state and federal levels
- Licenses and operational registrations
- Trademark strategy and filings
- Contract drafting and review
- Employment documentation
- Business purchase support, valuations, and deal negotiation
Speak with a business and immigration attorney
If you tell us where you live, where you will operate, your ownership structure, and whether a visa is involved, we can recommend the most efficient formation plan and next steps.Frequently Asked Questions
Can a non-U.S. resident form a U.S. company?
Yes. U.S. states generally allow non-residents and non-citizens to form corporations and LLCs, subject to the formation statute and registered agent rules. Delaware, included here purely as an example, corporation filing requirements are in 8 Del. C. § 102 and Delaware LLC formation is in 6 Del. C. § 18-201.Do I need a Social Security Number to form a U.S. company?
No. A Social Security Number is not required for a business formation, but a taxpayer identification number (TIN) can be useful. A TIN is issued for federal tax administration purposes, see 26 CFR § 301.6109-1.Can I get an EIN if I do not have a Social Security Number?
Often yes, but you must correctly identify the responsible party and avoid "nominee" filings. IRS guidance on responsible parties and nominees is here and the related IRS instructions for Form SS-4 are here.What is the difference between forming the entity and running it properly?
Formation is just the public filing. Governance and ownership terms usually live in private documents such as bylaws, shareholder agreements, operating agreements, consents, and equity records, and state statutes supply default rules when documents are silent. Delaware corporate formation content requirements are in 8 Del. C. § 102 and Delaware LLC formation is in 6 Del. C. § 18-201.Can I use an online incorporation service?
Sometimes, for very simple situations. But "standard forms" can miss ownership, control, IP assignment, and employment terms that matter operationally and, in some cases, cause immigration issues and visa denials.IRS warns that nominees, including incorporation services, should not apply for an EIN or be listed as the responsible party. EIN identifying number rules are in 26 CFR § 301.6109-1
Sadly, L-1 and E-2 applicants relying on generic governance packets have sometimes faced denials where the record does not support the required legal elements under the INA and implementing regulations. See INA definitions at 8 U.S.C. § 1101 ; treaty investor regulations at 22 CFR § 41.51 ; E visa guidance at 9 FAM 402.9 ; L visa guidance at 9 FAM 402.12 ; USCIS L policy guidance ; E policy guidance ; and L regulations at 8 CFR § 214.2.
Does forming a U.S. company give me the right to live or work in the U.S.?
No. Company formation does not create immigration status or work authorization. Nonimmigrant admission is governed by the INA and regulations, including 8 U.S.C. § 1184.Do I need a U.S. bank account?
Most operating U.S. businesses do. Banking is not governed by one single formation statute, but banks commonly require consistent entity records, EIN issuance, and clear beneficial ownership and authority documentation, and mismatches between filings and internal documents create delays.What employment documents do I need early?
At minimum, clear offer letters or employment agreements, contractor agreements, confidentiality and invention assignment terms, and a compliant I-9 process when hiring in the U.S. Employment eligibility verification requirements are in 8 CFR § 274a.2 and the underlying statutory obligation is INA § 274A, codified at 8 U.S.C. § 1324a.What ongoing compliance should I expect?
Common items include state annual reports, tax filings, maintaining good standing, and maintaining accurate internal governance and equity records. Requirements vary by state and by the entity's activities, so a "set it and forget it" formation package is rarely sufficient.About the Authors
Mark I Davies, Esq.
Chairman of Davies & Associates; focused on business formation, immigration strategy, and complex corporate structuring.Note: Delaware as an Example
While Delaware is often the wrong choice for incorporation, Delaware law provides a good example of the laws and provisions in various States. We therefore cite to Delaware law purely as an example which may not be applicable to the laws in your State.Why make Davies & Associates Your Related Immigration Resources Lawyers
Business formation is often part of an immigration strategy. Explore these visa options:
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