Globalization has opened various avenues for entrepreneurs to expand their market base internationally. The US is a prime location for foreign entrepreneurs to branch out or set up their businesses because of the conducive business environment.
However, establishing a legal business entity overseas in the United States has strict standard operating procedures that require it to be followed. Hence, if you need a simple, yet detailed step-by-step procedure on how to remotely register your company in the United States from Pakistan, then continue to read.
Form an LLC in USA from Pakistan
Why You Should Set Up Your Business in the United States
The majority of the companies that operate in the US are owned by foreign investors, who are the chief driving force contributing to the country’s increasing employment rate. However, if you are still hesitant about registering a company in the United States then take a look at these various benefits and why you should consider the risk.
- Legal Framework
One of the most significant reasons why the US is the ideal location to register your company is because it has a great incorporation jurisdiction. Law enforcement in the US will ensure that your legal company and its assets are protected, regardless of the performance of the economy or national politics.
- Favorable Economic Conditions
The US has a population of over 320 million people of diverse backgrounds, class status, income level, and interests. Hence, there will always be a market and a consumer base for any business that is interested in setting up its operations in the United States.
The US government largely favors its foreign investors and business owners. Thus, to encourage more overseas investors, the US government provides various economic incentives to these legal business owners. The incentives can be in the form of lowering real estate taxes for them, offering tax credits, and providing assistance.
- Financial Assistance and Benefits
Cash inflow in the form of investment is imperative to the growth of any business. The US has an attractive market for investment and financial partners. Thus, if you are an American-based company, there is a higher possibility that you can receive investment from US investors. The reason for this is because there is less risk involved in dealing with an American company, as compared to a company located overseas.
The same is the case with US banks from whom you might require a loan. With appealing terms to offer, US banks require your US credit history, which cannot exist until your company has a US registration.
- Immigration Facilities to the US
If you are looking to immigrate to the United States, then setting up your business in the country is one of the more convenient methods. By registering your company in the US, there is a greater possibility for you to achieve a US passport by applying for a work visa or a business visa.
Additionally, alternate visas which you may qualify for are:
- US investor visa (E-2 visa)
- Intra-company transfer visa (L-1 visa)
- Investment green card in the US (EB-5 visa)
Guidelines to Form a Company in the US
Even if you are a non-resident of the US, you can still pursue your ambition to expand or establish your business internationally, while staying in Pakistan. You just need to follow this simple process:
- Forming a Company
If you want to set up your company in America, the most convenient business structure that you can opt for is a Limited Liability Company (LLC). An LLC is a private company that is limited by shares. It is the most common legal vehicle for a company to manage because of the various benefits it offers.
By forming an LLC, the burden of bearing the company’s debts and liabilities is no longer the personal responsibility of the owners as an LLC is recognized as an individual, legal entity. Moreover, an LLC can avail the advantage of “pass-through” taxation. Since LLCs do not have their own federal tax classification, they can acquire the tax status of partnerships and sole proprietors. Hence, it is an effective structure to manage your tax.
Additionally, an LLC also allows you to pay less in income tax if you draw a portion of your income from the company’s dividends. Even the paperwork and levels of bureaucracy at an LLC are more feasible.
- Selecting a State
When you register your company in the US, you will have to select a state in which your LLC is based. Under normal circumstances, it is advised to select a state which has the most minimum state tax; therefore, you are only required to pay the Federal Tax.
Moreover, you have to first decide whether your company will be needing a physical office space or not. If it does, you should carefully gauge which state to select because if you hire registered agents from other states, you will have to perform an additional step of registering your company as a foreign LLC.
If your company does not require any physical presence, you can proceed to register it in the state of your choice. Delaware, Nevada, and Wyoming are popular choices for registering an LLC as they are renowned for being quite economical.
To further assist you in selecting which state to register your LLC in, the following is a breakdown analysis of the benefits you can find in the three of these business hubs:
Delaware has a remarkable reputation for being business-friendly. Thus, many corporations and small LLCs operate in this region for the convenience it provides to businesses.
Delaware does not take into account out-of-state income in its tax records. Thus, even if the majority of your business is operating in different states, the income you earn from there won’t be taxed by Delaware.
Additionally, Delaware offers a simple, and low cost of setting up your business. It only requires you to pay a minimal filing fee for the Certificate of Formation with the Division of Corporations, and a cover memo.
The state of Delaware has also created a separate court for businesses, the Chancery Court, that is solely for hearing business cases. Thus, any legal matter regarding your company can be resolved quickly by experienced and knowledgeable judges.
Compared to Delaware, Nevada has further reduced the tax burden on companies. It does not require state income tax, corporation tax, or franchise tax. Additionally, it does not even tax corporate shares or profit.
In Nevada, companies are not required to hold annual meetings or operating agreements. Furthermore, privacy is valued in the state of Nevada. Business owners can maintain anonymity if they choose to, and information sharing with the IRS is not mandatory either.
However, we would recommend Nevada as the preferable state to register your LLC in. The reason for this is because the LLC protection policies in Nevada are very strong. Additionally, Nevada does not require a separate director to incorporate. Thereby, favoring small-scale, family-owned LLCs as compared to the larger companies that are favored in Delaware.
Delaware vs. Wyoming LLCs: Where Should you Incorporate?
- Naming your LLC
To attain an EIN and to open a bank account in the US, your company’s name has to be registered in the United States. Before doing so, there are a few general guidelines that need to be taken into consideration:
- Your company’s name must include the phrase “limited liability company” for it to legally operate as an LLC to be discerned from other business models.
- You cannot use names that are reserved or associated with government institutions. For example, including the names ‘FBI’, ‘State Department’, or ‘Treasury’ is prohibited.
- It is a strategic move to research the market under which your business falls. Observing the company names of your competitors will provide you with some inspiration, or a general idea on what to name your company.
- First impressions matter; thus, your company’s name should be meaningful and should represent the service or products you provide. Additionally, the name should be short, simple, and memorable so that it sticks to the clients and consumers.
- Words such as ‘University’, ‘Attorney’, ‘Bank’ etc. are restricted. To include these words in your name your LLC will have to fill the necessary paperwork, and would need to have a licensed individual working in the profession to be a part of your LLC.
- The more unique your name will be, the better. This will allow you to have a URL that will most likely be available. It is also recommended to buy your URL for a website as soon as your name is registered to prevent others from acquiring it.
- Employ a Registered Agent
If you are operating a US registered company remotely from outside the US, it is mandatory for you to hire a registered agent to continue your operations. The registered agent must be a resident of the state where your company is based. This is because the agent is operating the company on your behalf. Thus, they will have to fill, send and receive the necessary legal documents.
Lastly, it is advised to select a registered agent from a reputable company that provides registered agents to fulfill this responsibility.
- File your Documents
To register your LLC with a state, you have to file your legal document, which is the Articles of Organization / Certificate of Formation or Certificate of Organization. This document contains:
- Company’s name
- Company’s agent’s address
- Name and legal address of the incorporator
- Value of authorized shares
Moreover, you should have your operating agreement filled out and at hand with you. This document consists of:
- Company’s operating procedures
- Rights and responsibilities of each LLC
- Ownership of LLC
- Attain an EIN
An EIN stands for Employer Identification Number. By attaining an EIN, you will be allowed to hire employees, obtain licenses, and pay taxes. You do not have to pay to secure an EIN, and can simply call the IRS directly to get one.
Other procedures to obtain an EIN include:
- Faxing the completed form to IRS, which is a faster method as it takes them up to one week to reply
- Emailing the form to IRS, which is a slower method and can take up to 3-4 weeks
- Physical US Address
Whichever state you select to register your company in should also have your physical mailing address. if you require a physical presence, then where your office is located in the state will be your physical address. However, if your company does not require an office, there are various services that can provide you with a virtual address in the US.
- US Bank Account
Opening a bank account in the US is undoubtedly the most complicated procedure in the process. The reason for this is because the US has a strict policy that the bank’s clients have to be physically present upon opening a bank account. The reason for this is so that the bank can get to know the clients in order to prevent instances of money laundering.
You will have to show the bank the essential documents and your EIN. Hence, you will be required to attain a visa for the US to physically open your bank account.
Unfortunately, most banks do not offer remote services to open a bank account. However, the Silicon Valley Bank is an exception but will require a minimum deposit and have a lengthy procedure in order to be well acquainted with you.
Conclusively, registering your company in the US is not that complicated or difficult as it is notorious for. Establishing your company’s operations in the US is a lifelong dream for the majority of the entrepreneurs and investors who reside outside of the US. We hope that our detailed guide that elaborates step-by-step on how you can achieve that dream has encouraged you to take that step, for there are various business opportunities awaiting you in the United States.
Want to register your Company in USA from Pakistan or from any country as a non resident? We can help you from a company with bank account, phone number, mailing address and extra features that may be needed to run and establish a successful business. Price start from 85USD to 500 USD depending on the type of company and features you need. Connect with us through our Contact us page on our website or Click here to discuss on WhatsApp.