More and more entrepreneurs from the United Arab Emirates are now looking to enter the US markets. This needs business owners like you to register companies in the USA to access the talented employee pool, and attract funding opportunities. With the USA receiving almost 30% of global foreign direct investments (FDI) in 2021, it has become a prime destination for business around the world.
But how do you register a company in the USA from the United Arab Emirates? In this guide, Commenda takes you through 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 a solid understanding of how to incorporate a company in the USA from the UAE.
At Commenda, we simplify the incorporation process, staying compliant with American regulations as you grow your business.
How to Register a Company in the USA from the UAE 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 Licenses: 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 licenses and taxes.
- Understand Tax Obligations: Learn about federal, state, and sales taxes, consulting advisors if needed.
Time required: 2-8 weeks.
Steps to register a company in the USA from the UAE
Expanding your business to the USA offers immense opportunities, including access to a vast consumer market. However, the process of incorporating a company in the USA from the UAE 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 decision should reflect on where your product and services will have the most demand in the USA. Commenda suggests Wyoming and Delaware as the top choices because of their laws, policies, and privacy protections regarding business laws.
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 American 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 Licenses
Depending on the nature of your business, you may need federal, state, or local licenses to operate legally. For instance, food businesses typically require health permits, while retailers may need sales tax permits. Licenses vary by industry and state, so research your specific requirements thoroughly.
To identify the necessary licenses, 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 licenses, 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
The US tax system is very different from the UAE. Depending on your business structure and state of incorporation, you may be subject to federal, state, and sales taxes. In the UAE, there is no personal income tax, and businesses face a flat corporate tax rate of 9% (introduced in 2023), with simple filing requirements.
The USA, on the other hand, charges a federal corporate tax of 21%, and there are state taxes, which vary from state-to-state. Registering your business in the USA provides access to a huge market, but you must follow stricter tax rules.
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 the UAE?
Registering a company in the USA from the UAE 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. The UAE-USA tax treaty helps avoid double taxation, which can benefit UAE-based entrepreneurs.
3. Easier Access to Funding Opportunities
Incorporating in the USA from the UAE 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
Incorporating in the USA 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 the UAE?
Business incorporation in the USA from the UAE 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 the UAE’s Trade License Number and the Tax Registration Number. It is crucial for opening an American business bank account, hiring employees, and filing taxes.
- Identification Documents:
Non-residents need to provide your UAE 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 entrepreneurs from the UAE, the Emirates ID (EID) is the best way to establish your proof of address. However, in many cases, your Emirates ID must be translated to English, by a certified translator.
The translated document then has to be notarized by a notary public in the UAE. Following notarization, it must be attested by the UAE Ministry of Foreign Affairs and International Cooperation (MOFAIC). Because of these reasons, if you have a utility bill or a bank statement in English, it would be an easier alternative instead of EID as proof of address.
- 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 the UAE 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 USA 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 US 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 the UAE
Incorporating a company in the USA 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: Understanding the complicated American tax system. Addressing federal and state tax filings as a non-resident, which requires expertise in American tax laws.
- Document Requirements and Verification: Translating and notarizing UAE documents to meet U.S. requirements, especially when English is not the primary language requires you to follow a lengthy process. Please ensure proof of identity and address comply with U.S. standards.
Commenda offers an end-to-end incorporation service curated for 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 the UAE, 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 UAE 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 the UAE offers many benefits, from a thriving business environment to a diversified talent pool. If the business registration process feels complex, hiring the right legal and business advisors can smoothen it for you.
Start your American 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 US 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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