The webinar focuses on the procedures and advantages of setting up a business in the USA by foreign entities, detailing the types of business entities available and the process of incorporation. It highlights the benefits of US market access, technological advancements, and favorable tax conditions in certain states like Wyoming and Delaware. Compliance with federal and state regulations post-incorporation, including tax obligations and ongoing requirements, is also discussed.

1. Foreign Company to be Setup in USA
Webinar Series: Episode 3
PRESENTEDBY:
Vivek Shah
US Tax Expert
Managing Partner
@Smart Accountants
Mansi Shah
US Expat Tax Expert
Sr
. Tax Manager
@Smart Accountants

2. Webinar Overview:
Purpose
KEY Entities
Company incorporated in
USA by Non resident
Procedure to incorporate
the company in USA
Capital Transfer from India
to USA
Compliances at Federal
Level
Compliances at State Level

3. What is Purpose to Set Up A Company in USA:
 The main purpose of setting up a company in the USA is to Create Global market and Global
Brand.
 Due to the favourable economic environment i.e. Non resident can purchase U.S. assets at
lower prices than their home country.
 Incentives offered by federal, state and local governments.
 Access to new markets.
 Stable Political environment. As say USA is “most attractive market for ventures capital and
private equity funding. And World Bank ranked U.S fifth for its overall “ ease of doing
business”.
 Technological advancement: USA is known for its advanced technological innovations which
will enhanced business’ Production and World Wide Communication.
 Protection of Intellectual Property: The USA leads the world in the way it protects
intellectual Property Rights (IPR).

4. Key Entities can setup in USA for doing a business:
 When beginning a business, you must decide what form of business entity to establish ?
 The most common forms of business are :
Business Entity
Corporations
C Corporation S Corporation
Partnership
General Partnership Limited Partnership
Limited Liability
partnership
Limited Liability
Company (Including
Disregarded Entity)
Sole Proprietorship

5. C Corp. S. Corp LLC
Gen.
Partnership
Sole
Proprietor
Owners have limited liability for business debts and
obligations X X X
Created by registration with state X X X
Perpetual duration X X X
Unlimited owners X X X
Owners need not be U.S. Citizens or residents X X X X
May be owned by another business entity rather than
individuals X X
May issue stock X X
Owners report business profit and loss on personal tax
returns X X X X
Continue…

6. QUESTION
1. Which of the following type of entity Owners report business profit and loss on
personal tax returns?
a. General Partnership
b. C Corporation

7.  Here, We are are understanding that how to incorporate company in the USA as a foreigner, non-citizen or US citizen
that lives outside the country.
 Incorporating in the United States can increase your company’s credibility, gain access to the US market and investors
(the world’s largest source of each).
 If you are located outside the United States and wish to form a company in the US, then there are TWO types of
Business Entity to form:
Company Incorporated in USA by Non-Resident
Types of Business Entity to
form
Form a Corporation
Articles of
Incorporation
Certificate of
Incorporation
Form a Limited Liability
Company
Articles of
Organization
Certificate of
Organization

8. Procedure to Incorporate the Company in USA
Open a Business Bank Account
Apostille Or Certificate Authentication
Employer Identification Number (EIN)
Provide Names & Addresses Of The Directors
Hire A Registered Agent
Choose A Company Name
Which State To Form Your Corporation Or LLC
Choose Which Type Of Business Entity To Form

9. QUESTION
2. The Registered Agent may or may not have a physical address in the state of
formation.
a. TRUE
b. FALSE

10. Explanation Of Procedure :
Wyoming New Hampshire
South Dakota Nevada
Alaksha Utah
Florida Delaware
Montana North Carolina
1. Choose Which type of Business Entity to Form
 If any of the owners of the company are not US Citizens, then you have the option of either forming a Corporation
or an LLC. There’s another entity type called an “S-Corporation” but that entity requires all shareholders to be US
Citizens.”
2. Which State to Form Your Corporation or LLC
 In the United States, there are 50 States or Washington DC. Which state you choose will depend on why you are
forming the company.
 Some US states are more “business-friendly” or “international-friendly” than others.
 In USA there are 10 best States to form an LLC or Corporation.

11. QUESTION
3. Foreign person cannot be shareholder/member of?
a. C Corporation
b. S Corporation
c. LLC
d. None of the above

12. Explanation Of Procedure :
Wyoming Delaware Nevada
 There is no state income tax and
essentially no sales tax in Wyoming.
 There is no corporate income tax.
 In Wyoming State there is no
franchise tax.
 In Wyoming Minimum requirement is
to maintain a file annual report by
January 1st.
 Wyoming offers greater benefits to
smaller companies with increased
privacy and fewer taxes.
 While Wyoming is growing in
popularity due to their lack of state
corporate margin tax, Delaware
offers business-friendly tax law
which helps to get rid of these tax
expenses.
 Delaware has no Sales Tax. For some
of our clients that run dropshipping
businesses and have suppliers in the
US, this is definitely a big win for not
just the business, but also for the
consumers.
 Paying Delaware's state income tax is
not needed for the people who are
from different states and countries.
 Nevada State with no state income tax
and zero to fairly low annual franchise
fees.
 Nevada does have a number of other
business licensing regulations and
depending on the type of work, it may
not be worth the headache.
Now, we understand that which state given how much benefit to the company and Owners

13. Explanation Of Procedure :
California South Dakota
• CA have some of the highest state level tax burdens in
the US.
• In CA Corporate Income Tax Rate is 8.84% and State
and Avg. local Sales Tax Rate is 8.25%.
• California franchises taxed is $800 (minimum)
annually.
• South Dakota is one of the most tax-friendly states for
businesses.
• Corporate taxes are imposed only on banks and
financial institutions.
• South Dakota charges no personal income tax to
residents.
• There is no any franchise tax in South Dakota.
 There are Some States Where Tax Rate is High for LLC Or Corporation:
1. Maryland
2. Connecticut
3. New York
4. California
5. New Jersey
 Now, we compare that which state is more beneficial for Corporating Company or LLC

14. Explanation Of Procedure :
Choose a Company
Name
• We will search to
be sure this name is
available in your
chosen state.
Hire A Registered
Agent
• The Registered
Agent is a person or
company that must
have a physical
address in the state
of formation, be
available during
business hours, and
will accept and sign
for official legal and
state documents for
the company.
Provide Name &
Add. Of Directors &
Members
• For Corporating
Company or LLC
required all
members Names,
Directors Name,
Name of Authorized
Persons, and
Percentage of
Holding of Directors
in the Company or
LLC.
Employer
Identification
Number (EIN)
• Once your company
is filed by the state,
there is required to
apply for “EIN.”
Apostille or
Certificate of
Authentication
• If you intend to
open a bank
account in your
home country or if
a local company or
government office
will require proof of
the formation of
your US
Corporation or LLC,
you may need to
have the company
formation
documents certified
with an “Apostille”
or “Certificate of
Authentication”.

15. QUESTION
4. The LLC formation can be done at state level by applying for?
a. Article of Organization
b. EIN
c. Certificate of good standing
d. Apostille AOI

16. Funds Transfer From India To USA
Overseas Direct Investment (ODI):
 Direct investment outside India means investments, either under the Automatic Route or the Approval Route, by way of contribution
to the capital or subscription to the Memorandum of a foreign entity or by way of purchase of existing shares of a foreign entity either
by market purchase or private placement or through stock exchange, signifying a long-term interest in the foreign entity.
 As per the FEMA Regulations, any investment under the overseas direct investment may be in either of the followings:
a. Overseas Joint Ventures
b. Wholly Owned Subsidiaries
 Here, Wholly Owned Subsidiary means a foreign entity formed, registered or incorporated in accordance with the laws and regulations
of the host country, whose entire capital is held by the Indian Party.
General Prohibition on making of Overseas Direct Investment (ODI)
 As per the FEMA Regulations, any Indian entity may, subject to the approval of Reserve Bank make investment in the foreign entities
engaged in the below mentioned sectors;
a. Real Estate
b. Banking Businesses
 An Indian Party may create charge, by way of pledge, on the shares of Joint Venture (JV) or Wholly Owned Subsidiary or Step Down
Subsidiary outside India as a security in favor of an Authorized Dealer or a public financial institution in India or an overseas lender, for
availing of fund based or non-fund based facility for itself.

17. QUESTION
5. Fund from foreign country is allowed under FEMA for which entity type:
a. LLC
b. C Corporation

18. Compliances In USA
 The need for compliance with government requirements only gets more important after forming a corporation or LLC.
 Very often the corporation or LLC was set up in the first place to help protect personal assets and provide tax-deductible benefits for
owners and employees.
 Corporations and LLCs have both internal and external ongoing requirements.
Federal Income Taxes- This is Typically based on earned Income. Taxes will vary for every business and paid accordingly.
S- Corporation Election- – In order to enjoy the best-possible tax savings for your business, you need to have the right tax
Classification. Many C corporation and LLCs elect to file for S Corporation status because of the advantages and once- a-year
tax filing requirement.
LLC Tax Status Election- When you form an LLC, it is automatically assigned a “default” tax status unless you choose otherwise. One-member
LLCs are generally taxed as sole proprietorships, and those with multiple members are taxed as Partnership.
CompliancesattheFederalLevel

19. Continue…
Articles of Incorporation :When you form a corporation, you file the Articles of Incorporation with the state to show
that you have incorporated. This is also referred to as a “Certificate of Incorporation.
Articles of Formation : – When you form an LLC, you file the Articles of Formation with the state to show that you
have formed it. This document is also referred to as “Articles of Organization,” “Certificate of Organization,” or
“Certificate of Formation.”
Annual Reports : States in which your corporation or LLC is formed or qualified to do business generally require
you to file an annual report. By filing an annual report, you’re providing the Secretary of State with updated
information about your business.
Foreign Qualification: In order to do business legally in states other than your home state, you’ll need to register your
company in those states
CompliancesattheStateLevel

20. Do You Have
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Questions? An Informative SessionOn:
"Foreign Company to be Setup in USA
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21. NEXT STEPS:
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more, asking questions or signing
up for one of our groups or
trainings,
Stay in the meeting after the end
OR schedule some time to talk:
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Phone: +18507882090