Starting a Business in Florida as a Foreigner
Starting a business in Florida as a foreigner is possible, but there are rules to be followed and form an entity that is legal for a foreigner to operate.3 min read
Starting a business in Florida as a foreigner is possible, but you will have to follow certain rules and form a business entity that is legal for a foreigner to operate.
Starting a Business in Florida
Starting a business in the state of Florida requires you to follow some important steps:
- Register the business with the state's Department of Revenue.
- Check with the tax collector in your county to find out about required licenses.
- Register the business with the IRS.
- Register with the Department of State (only required if you are registering a fictitious name or corporate entity).
You may also want to review available resources, such as books about starting businesses in Florida.
Corporate Entities that Non-Residents Can Operate
Non-citizens can currently form two types of business entities in the United States:
- Corporation (C corp)
- Limited liability company (LLC)
Many people recommend that foreigners should form S corporations instead because this business formation comes with a number of benefits. However, this type of business entity is only available to permanent residents and citizens.
Although foreigners are usually encouraged to form C corporations, it's worth looking at the advantages of forming a business as an LLC. The first and most appealing benefit is limited personal liability, which means that the owner(s) of the business are shielded from liability for any business obligations, debts, actions and decisions. If the LLC is sued, the owner(s) would generally only be responsible up to the amount they invested in the business.
An LLC also doesn't have the same regulations imposed on it for recordkeeping that corporations are required to follow. The owners of an LLC, called members, have few restrictions on how the profits will be split between them. Although an LLC is an appealing business formation, many new business owners choose to form C corporations. One of the main advantages of this business structure is the option to offer an unlimited number of stock shares, which can help the company grow more rapidly. This aspect of the formation often appeals to investors.
Foreigners starting businesses in Florida also appreciate the protection offered by the C corporation structure, which prevents the IRS from being too heavily involved in their business. Although the IRS won't be as involved, the trade-off is double taxation. With thorough planning for the tax requirements, you can structure the financials of the company to avoid being double taxed and prevent major financial troubles.
Visa Requirement for a U.S.-Based Business
Many foreigners wonder whether they are required to obtain visas to form businesses in the United States. Although a visa isn't a requirement to operate a business, it is a requirement to live in the United States, so it's best to obtain one before you start your company. Foreigners have several visa options. The most popular option for an entrepreneur is the E-2 visa.
In order to qualify for an E-2 visa, you must meet several requirements:
- You must show proof that you own 50 percent of your business or more (that you have a controlling share).
- You must be a citizen of one of the countries under the Treaty of Navigation, Commerce or Friendship with the United States (for a full list of countries that fall under these treaties, visit the Department of State's Treaty Countries website).
- You must either be planning to invest or have already invested a large amount of capital in a business based in the United States. Currently, no dollar amount limit is set for an investment, but it's more challenging to obtain this visa if the amount is less than $100,000. The investment amount must also be a large portion of what you have.
Best Visa to Use
The two main choices are the E-2 visa and the EB-5 visa. The EB-5 visa has fewer requirements around the nationality of the applicants, but those applying will need to have more money to invest. In rural and targeted employment areas, the minimum is $500,000, while the minimum in other areas is $1 million. The business must also create 10 or more full-time jobs.
The E-2 Visa Route
If you obtain an E-2 visa, the term is two years. After that term is up, you will need to apply to extend the status in two-year increments.
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