USA compliance for global entrepreneurs

Entity formation and state selection: Nonresidents can form and own US LLCs and corporations remotely; state-level incorporation is required (states = primary regulator for entity formation). Common choices: Delaware (investor-friendly legal framework for C-corps), Wyoming/Nevada (cost/privacy benefits), home-state registration required if "doing business" there (which can trigger foreign registration requirements and penalties). Registered agent requirement: virtually all states require a registered agent and a U.S. street address for service of process. State-specific ongoing filings: annual reports/statement of information and state franchise taxes or annual fees vary by state (Delaware franchise tax for corps, California annual Statement of Information and franchise tax, New York biennial/annual filing depending on entity, Texas annual franchise tax, Florida annual report). Publication requirements exist in some states/localities (e.g., limited historic examples) — check state SOS. Federal tax, withholding, and reporting for foreign owners: Obtain appropriate taxpayer identification numbers: EIN for entities and ITIN for individuals without SSNs when needed. IRS offers online EIN application but foreign responsible parties may need to file Form SS-4 by mail/fax per IRS guidance. Tax filings depend on structure and source of income: U.S.-effectively connected income is taxed in the U.S.; common forms include Form 1040-NR (nonresident individuals), Form 1120-F (foreign corporations engaged in US trade/business), Form 1120/1120-S for US entities; Form 5472 (information return) is required for certain foreign-owned US corporations/foreign-owned disregarded entities per IRS rules. Withholding obligations: payers must withhold on certain U.S.-source fixed or determinable annual or periodic income to foreign persons; tax treaties can modify withholding rates. FBAR/FATCA: U.S. persons (and certain entities) must report foreign financial accounts (FBAR) and FATCA has separate filing obligations; these are enforced by Treasury/IRS. FinCEN / Corporate Transparency Act (BOI): FinCEN’s BOI rules require "reporting companies" to file beneficial ownership information unless an exemption applies. Definitions and deadlines changed through 2024–2025 rulemaking (examples: some domestic entities exempted; foreign entities registering to do business in the U.S. may be reporting companies). Reporting timelines differ by the date of formation/registration; FinCEN guidance and the Small Entity Compliance Guide provide required fields (name, DOB, residential address, ID number, image of ID for beneficial owners) and timelines (e.g., certain groups had an April 25, 2025, deadline for prior registrations; entities created/registered on or after Jan 1, 2024 generally have 30 calendar days after effective notice to file). FinCEN also clarifies that providing BOI to states or financial institutions does not satisfy FinCEN filing. Banking and KYC / OFAC: U.S. banks perform strict KYC, KYB, AML and will require EIN, entity formation documents, beneficial owner information and often in-person verification or U.S. presence for foreign-controlled entities; policies vary by bank and have tightened since 2020. OFAC sanctions screening is required for international transactions and onboarding; banks and companies must screen counterparties against OFAC lists and may need licenses for prohibited transactions. Employment and immigration considerations: Ownership does not equal work authorization. Founders who want to work in the U.S. must follow immigration pathways (USCIS guidance includes nonimmigrant parole and investor-related pathways; options include E-2 (treaty investor, where available), L-1 (intra-company transferee), H-1B/O-1 for sponsored roles, and the International Entrepreneur Rule/parole routes where eligible). Documentation and evidence differ by pathway. For hiring U.S. employees: comply with I-9 requirements, federal payroll taxes (FICA, FUTA), employer withholding and deposit rules, and state-level unemployment insurance and withholding registrations. Sales tax, marketplace facilitators, and nexus: Sales/use tax is state-administered (no federal VAT). Economic nexus thresholds mean remote sellers or marketplace sellers may have to register and collect sales tax once sales or transaction thresholds in a state are exceeded; marketplace facilitator laws often shift collection responsibility to the marketplace operator. Rules and thresholds vary by state — rely on each state’s Dept. of Revenue (examples: CA CDTFA, NY tax, TX Comptroller) and commercial tax engines (Avalara, TaxJar) for operational details. Licensing and regulated activities: Federal licenses required for regulated sectors (alcohol, firearms, investment advisers, communication/transport). State and local business licenses, professional licenses, and industry-specific regulation (healthcare, crypto, banking, cannabis) may impose additional registration and compliance. Data privacy and consumer protection: California’s CPRA/CCPA is the most mature state-level privacy framework; other states (e.g., Virginia, Colorado, Connecticut) have privacy laws with varying obligations. Global entrepreneurs selling into the U.S. must consider state privacy rules, breach notification laws, and federal sectoral rules where applicable. Practical compliance checklist & recommended calendar (high level): Pre-formation: decide entity type (LLC vs C-Corp) based on funding and tax strategy; choose formation state; retain registered agent; check industry licenses. Formation (Day 0–30): file formation documents with state SOS; obtain EIN (online or SS-4 for foreign responsible party); register for state tax IDs where required; open U.S. bank account (prepare KYC/beneficial owner docs); check FinCEN BOI filing obligations and file if required. First 90 days: register for sales tax where nexus is present; set up payroll and I-9 compliance before hiring; verify OFAC screening for customers/vendors; implement basic data privacy and recordkeeping policies. Ongoing (annual/quarterly): file federal and state tax returns and estimated payments; file state annual report/franchise tax; maintain corporate records and meeting minutes; update FinCEN BOI report within required timeframes for ownership changes; regular AML/OFAC/KYC reviews; renew licenses.