New Zealand business owners have started looking for opportunities to expand their business in the American market. The benefits of business laws in the USA make it a prime hotspot to incorporate a company in the USA from New Zealand. In 2022 according to the US trade representative, U.S. goods exports to New Zealand reached $4.2 billion, marking a 12.0 percent increase from 2021.
Additionally, U.S. goods imports from New Zealand totaled $5.4 billion, reflecting a significant 56 percent growth from 2012. Kiwi entrepreneurs are attracted to the States for better funding opportunities and a top-tier talent pool.
But how do you register a company in the USA from New Zealand? In this blog, you can find the series of steps you can follow to incorporate, including the legal requirements, costs, challenges and ways to overcome them. By the end, you’ll have enough knowledge on how to register your company in the USA from New Zealand.
At Commenda, we simplify the incorporation process, handling your compliance and tax duties with American regulations as you grow your business.
How to Register a Company in the USA from New Zealand in 8 Steps
- Choose a Business Structure and State: Select a structure (e.g., LLC, C-Corp) based on your business goals and decide the state of incorporation (Delaware and Wyoming are popular choices).
- Pick a Name: Check the USPTO trademark database, state availability, domain availability, and social media handles.
- Apply for EIN: Obtain an Employer Identification Number from the IRS for taxes and banking.
- Get Business licences: Research and apply for federal, state, or local permits as per your industry.
- Register with State Agencies: File incorporation documents and appoint a registered agent.
- Open a Business Bank Account: Separate business finances and choose banks supporting non-residents.
- Meet Compliance Requirements: File annual reports and stay updated on licences and taxes.
- Understand Tax Obligations: Learn about federal, state, and sales taxes, consulting advisors if needed.
Time required: 2-8 weeks.
8 Steps to register a company in the USA from New Zealand
Expanding your business from New Zealand to the USA offers immense opportunities, including access to a vast consumer market. However, the process of incorporating a company in the USA from New Zealand can seem tricky. This guide simplifies the process into eight essential steps to help you start your business successfully.
Step 1: Choose a Business Structure and State of Incorporation
The first step in registering your company is selecting a legal structure that aligns with your business goals. Here are the common options:
C-Corp (C Corporation)
- C-Corporation is best for: Startups planning to raise venture capital or scale rapidly.
- Tax Treatment: Double taxation – the corporation pays taxes on profits, and shareholders pay taxes on dividends.
- Complexity: High; involves more regulations and reporting requirements.
LLC (Limited Liability Company)
- LLC is best for: Small businesses seeking flexibility and personal asset protection.
- Tax Treatment: Pass-through taxation – profits and losses are reported on the owner's personal tax return.
- Complexity: Moderate; simpler than a C-Corp but still requires compliance with state regulations.
S-Corp (S Corporation)
- S-Corp is best for: Small businesses that meet eligibility criteria and want pass-through taxation.
- Tax Treatment: Pass-through taxation, avoiding double taxation, but with restrictions like shareholder limits.
- Complexity: Moderate; must meet IRS eligibility criteria and adhere to specific operational rules.
For smaller operations with limited funding requirements, an LLC is generally the easiest and most cost-effective. For high-growth startups seeking external funding, C-Corps are preferred. Always seek professional advice while choosing the business structure.
Also selecting the state you want to register your company in becomes very crucial. This choice can vary, for example, you may want to incorporate in a state where the demand for your products and services are high. Commenda suggests Wyoming and Delaware as the top choices because of their laws, policies, and privacy protections.
Step 2: Pick a Name for Your Business
Your business name is an integral part of your brand identity and must comply with U.S. regulations. The name should be unique and must not conflict with existing trademarks. Additionally, it must include identifiers such as “LLC” or “Inc.” based on your chosen business structure.
Before Finalizing Your Business Name:
- Check USPTO Trademark Database: Ensure your desired name isn’t already trademarked.
- Verify State Availability: Confirm that the name is not in use and can be registered in your chosen state.
- Search Domain Availability: Use platforms like GoDaddy, Namecheap, or Hostinger to secure a relevant domain name.
- Confirm Social Media Handle Availability: Check platforms like Instagram, Twitter, and LinkedIn to maintain consistency across your online presence.
Step 3: Apply for an EIN (Employer Identification Number)
An Employer Identification Number (EIN) is like a social security number for businesses. It is required for filing taxes, opening a business bank account, and hiring employees.
Applying for an EIN is straightforward. Visit the IRS website and submit Form SS-4 online. While U.S. citizens can complete the process instantly, non-residents may face additional steps, especially if they lack a Social Security Number.
Step 4: Apply for Business licences
Depending on the nature of your business, you may need federal, state, or local licences to operate legally. For instance, food businesses typically require health permits, while retailers may need sales tax permits. licences vary by industry and state, so research your specific requirements thoroughly.
To identify the necessary licences, visit the Small Business Administration (SBA) website or consult with your state’s Secretary of State office or Department of Revenue. Apply early to prevent operational delays.
Step 5: Register with State Agencies
State registration is a critical step in incorporating your company. The requirements vary based on the state where you choose to register.
To register, file the incorporation documents (like, Articles of Organization) with the state’s Secretary of State office. You will also need to appoint a registered agent—a person or entity authorized to receive legal documents on your behalf. File for federal, local and state taxes as well. Depending on your industry, you may have to obtain some types of insurance.
Step 6: Open a Business Bank Account
Having a business bank account is crucial for keeping personal and business transactions separate. It simplifies tax reporting, helps protect personal assets, and establishes your business’s credibility.
Several banks offer services for non-resident business owners. Choose one that suits your needs. Many banks require an in-person visit for account verification, but some offer remote setup options.
Step 7: Understand Your Compliance Requirements
Compliance typically involves filing annual reports, renewing licences, and meeting tax obligations. Each state has its own requirements, so understanding them in advance can save you time and penalties.
Compliance violations can leave a huge black mark on a company’s reputation. Hence, regular audits of your compliance status must be carried out. Also, many partners, investors and even customers want the businesses they deal with meet these compliance criteria. See how Commenda’s Compliance Monitor makes it easy!
Step 8: Understand Your Tax Obligations
New Zealand business owners must understand that while New Zealand has a 28% corporate tax and no capital gains tax (exceptions exist), the USA imposes a 21% federal corporate tax, along with varying state taxes and taxes on dividends. Unlike New Zealand’s Goods and Services Tax (GST) system with a 15% rate, the USA has a decentralized sales tax system, where rates and regulations vary across states, counties, and cities.
Consulting tax advisors from Commenda can help you understand these obligations.
Commenda specializes in helping entrepreneurs like you on how to incorporate your business in the USA. From obtaining an EIN to ensuring compliance, we’ve got you covered. Reach out to us today to start your journey!
What Are the Benefits of USA Company Registration from New Zealand?
Registering a company in the USA from New Zealand offers numerous advantages for entrepreneurs looking to scale their ventures globally. Here’s why it’s a popular choice:
1. Access to a Robust Market and Global Credibility
The USA boasts the largest consumer market in the world, providing businesses access to over 330 million potential customers. Establishing an American entity shows credibility, which attracts international clients and partners.
2. Tax Advantages and Flexibility
Certain states, like Delaware and Wyoming, offer favorable tax structures for businesses. Delaware, for instance, is renowned for its business-friendly policies, such as no state sales tax. This makes it a preferred destination for global entrepreneurs.
3. Easier Access to Funding Opportunities
Incorporating in the U.S. from New Zealand makes it easier to connect with venture capitalists, angel investors, and crowdfunding platforms. The U.S. legal framework is familiar to most investors, encouraging confidence and simplifying negotiations.
4. Seamless Operations for E-commerce and Technology Ventures
US registration helps set up payment gateways and banking services, which are essential for tech startups and e-commerce businesses targeting American customers.
What Are the Requirements to Start an American Company from New Zealand?
Business incorporation in the USA from New Zealand needs precise documentation requirements. Below’s a breakdown to guide you through the essentials:
- A Registered U.S. Address or Registered Agent:
A physical U.S. address is necessary for incorporation. This doesn’t have to be an operational office, it could be a virtual address for official correspondence. Also, appointing a registered agent in the state you wish to incorporate is legally required. The agent acts as a person of contact for receiving legal and tax documents on behalf of the company.
- Employer Identification Number (EIN) :
The EIN, issued by the IRS, is a unique identifier for tax purposes. It’s equivalent to New Zealand’s IRD (Inland Revenue Department) number and is crucial for opening an American business bank account, hiring employees, and filing taxes.
- Identification Documents:
Non-residents need to provide their Kiwi passport copy of all company directors for identity verification. In some cases, a visa may be requested, depending on your chosen business activity.
- Proof of Address:
Both for the registered agent and for the company owner(s), proof of address is often required. For New Zealand's business owners to register a company in the USA, a national driving licence can be used as proof of address. Bank statements issued by a New Zealand or an international bank can also be used for the same.
- Articles of Incorporation:
The Articles of Incorporation (for corporations) or Articles of Organization (for LLCs) outline the company's name, purpose, structure, and details of directors or members. These documents are submitted to the Secretary of State during incorporation.
Satisfying the above requirements, entrepreneurs from New Zealand can establish a compliant and operational business in the USA, gaining access to one of the world’s largest markets.
What Does it Cost to Run an American Company?
Running a company in the U.S. involves both upfront setup costs and recurring annual expenses. On an average, the first year running cost could be around $40,000 USD.
Starting Costs for Setting Up the Company in USA
The initial expenses for registering your company in the USA depend on factors like the state of registration and the business structure (LLC or C-Corp). Here’s an overview:
Annual Fees for Compliance and Taxes
Ongoing compliance and tax obligations vary based on the state and business structure. Here's what you can expect:
There may be additional costs involved, depending on the state of incorporation. Also, these costs are just an approximate estimate.
Opening a Business Bank Account in the U.S.
Opening a business bank account in the U.S. requires specific documentation and often an in-person visit. Also, it must be done within 4 weeks of incorporation.
Select a bank that aligns with your business needs. Major U.S. banks like Chase, Bank of America, and Citibank offer corporate banking solutions. Consider what your needs are and fulfill the individual requirements like EIN, proof of address etc.
Overcoming Challenges in USA Company Incorporation from New Zealand
Incorporating a company in the USA as a Kiwi entrepreneur can be daunting due to regulatory, compliance, and tax complexities. Common Challenges include:
- Navigating U.S. Regulations: Understanding state-specific incorporation rules and filing requirements.
- Compliance Obligations: Managing ongoing compliance tasks like registered agent renewals, annual reports, and franchise taxes.
- Tax Responsibilities: Addressing federal and state tax filings as a non-resident, which requires expertise in American tax laws.
Commenda offers an end-to-end incorporation service curated for Kiwi business owners, addressing every aspect of the process. From providing expert planning and guidance on selecting business structures, state of incorporation to handling all the boring paperwork, Commenda will be by your side. Post incorporation, Commenda ensures your business remains in good standing with annual filings and tax reporting.
How Does Commenda Help You in US Incorporations and Compliance?
Commenda simplifies the question of how to register a business in the USA from New Zealand, offering custom solutions for your business.
- Streamlined Onboarding
Commenda's platform provides an easy onboarding process for global entrepreneurs. With their expertise, setting up an American entity becomes seamless, even for first-time founders.
- Compliance Made Simple
Commenda’s CommendaOS ensures your business remains compliant, tracking deadlines and automating processes like sales tax filing across all 50 states.
- Affordable and Effective Solutions
Designed with business owners in mind, Commenda offers cost-effective solutions, from incorporation to ongoing compliance support. You can monitor your global business activities through a unified dashboard, keeping all entities in good standing.
- End-to-End Support
With over 250 satisfied cross-border businesses, including startups and multinational corporations, Commenda assists with every step, including document preparation, compliance checks, and accounting integration. The team also provides access to pre-vetted accountants and legal experts, ensuring you meet American regulations without a sweat.
Conclusion
Incorporating in the USA from New Zealand offers many benefits, from a thriving business environment to business-friendly policies by the American government. If the registration process feels complex, hiring the right legal and business advisors can smoothen it for you.
Start your U.S. business journey today with Commenda. Our expert team provides end-to-end incorporation services, including legal and compliance support and sales tax filing. Schedule your free consultation to learn how we can help you establish your business in the U.S. efficiently and compliantly.
References -
- Delaware Corporation and Business Entity Laws
- Doing Business with Department of State
- How to start and manage your small business, and find local support if you need help
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