Launching an IT Business in the U.S.: A Comprehensive Guide
Starting an IT Business Remotely in the US
Setting up your own IT business in the USA isn’t rocket science. You can handle it all remotely, using faxes, emails, and the internet without having to visit the country. Here’s a simplified guide on how to get started.
Selecting a Business TypeWhen registering your company, the two primary considerations are: 1) the type of business to register, and 2) the state where you'll register.
The type of business depends on whether you'll have outside investors. If not, go for an LLC (similar to an OOO). If yes, opt for a corporation.
LLCs offer the benefit of being easy to establish and maintain. They provide limited liability protection without excessive formalities. To register, submit an application to the Secretary of State. An LLC lacks double taxation, unlike an OOO. The main downside of an OOO is that outside investors usually prefer investing in corporations rather than other business entities. However, you can convert an OOO into a corporation if needed in the future.
If your IT business anticipates outside investors, register a corporation. This is a more complex and costly business structure as it allows for issuing multiple classes and categories of shares, giving flexibility in attracting team members and shareholders. The main disadvantage of corporations is that they usually face double taxation. To avoid double taxation, register your company as a federal corporation type S (S-corp). However, this option is available only for corporations where all shareholders are physical individuals residing or holding U.S. citizenship.
Location for RegistrationYou need to register your company in one of the USA's states: either in Delaware or where your business has any physical presence (offices, shops, production facilities, etc.). For an IT business, the advantage lies in the fact that most often, it doesn’t require any physical presence in any state. Consequently, registering in Delaware is often the most straightforward choice due to its benefits for IT businesses.
Setting Up Your Business in Delaware
Business RegistrationIf your company does not have any significant ties with the USA, it will have no tax obligations, apart from the annual registration fee. For tax purposes, you need to register with the Internal Revenue Service (IRS) and apply for a Federal Employer Identification Number (EIN), usually needed for opening a bank account in the USA. You can apply for an EIN via telephone (for companies with an address outside the USA), fax (which takes about 4 days), or mail (which may take up to a month or more).
Typical ContractsYou’ll need English-language contract templates. While some partners may provide their own templates, it's wiser to have your own to ensure better protection.
Key agreements that tech startups might require include:- Bylaws, Operating Agreement, Shareholders Agreement - to be presented at the bank when opening an account.- Agreement on Services- Confidentiality Agreement (NDA)- Independent Contractor Agreement- Share Purchase Agreement- Licensing Agreement, IP Assignment Agreement
Virtual Address/OfficeVarious services offer virtual mailboxes or even virtual offices with telephone numbers, where calls are answered in your company's name. Such a solution might be beneficial if you anticipate frequent correspondence with your American partners. For instance, Earth Class Mail, Traveling Mailbox, and other services might suit your needs.
Bank AccountTo open a bank account in the USA, you might need to visit the country. Silicon Valley Bank in California opens accounts for startups with foreign founders without a physical visit, but they usually request external investors or similar factors. It is also possible to open a bank account via a foreign branch of an American bank in your country.
Making adjustments based on the enrichment data:
When choosing a name for your company in Delaware, ensure its uniqueness using the Delaware business name search tool available online. Once you’ve decided on a name, verify its availability and ensure it's not already in use by another Delaware business. You also need to designate a registered agent with a physical address in Delaware who can receive legal documents on your behalf.[5]
When registering your company, you must appoint a registered agent in Delaware. Many businesses use professional registered agent services to fulfill this requirement remotely.[5]
Reference Sources:1. en.wikipedia.org/wiki/Trade_name2. delaware.gov/corp/overview.shtml3. corporations.findlaw.com/delaware-law/starting-a-delaware-corporation.html4. irs.gov/businesses/small-businesses-self-employed/how-to-apply-for-an-employer-identification-number-ein5. ybllc.com/blog/how-to-start-delaware-llc/
Exploring the Financial SectorAs your IT business expands, you may need to seek financial assistance from banks or investors. This could include loans or equity investments.
Engaging in Business TransactionsGiven the global nature of your remote IT business, you'll likely engage in various financial transactions with partners and clients across the globe. While conducting such transactions, it's essential to adhere to the finance industry's ethical standards and regulations, ensuring the integrity and sustainability of your business operations.
