Starting a business takes work. US laws and regulations mean you’ll need to educate yourself about your particular industry and then jump through a few hoops before you can start earning your first million.
Starting a company means you’ll need to know the type of business structure you’ll use. For example, will you be in a partnership or will you do it alone?
Your business structure will affect how you register your business, pay your taxes, establish your liability, conduct your banking and file documents with local, state and federal government entities.
Business structures in the US include:
Sole proprietorship. A sole proprietorship has a single business owner with complete control over business and profits, as well as personal liability for debts. A business owner can use their personal name for the business or operate under a separate name.
Partnerships — LP, LLP and LLLP. Two or more people can enter into a partnership, wherein each person is responsible for the actions — and debts — of the others.
Limited liability companies — LC, LLC, Ltd., Co. and PLLC. LLCs take their name from one big pro: limited liability that protects you personally. While they operate like a hybrid partnership–corporation, they don’t necessarily adhere to the rigid structure of a corporation. LLCs also don’t place personal financial obligation on its members.
Corporations —Corp., Inc. and PC. Corporations too offer personal financial protection to their shareholders and limited liability, but at the cost of having to adhere to a tight structure. Corporations also require more time and money to set up than other entities do.
Each business structures has different rules. For instance, to form what’s known as an S-corporation, the company cannot have more than 100 shareholders, and each must be a US citizen or resident alien, among other requirements.
The US Small Business Administration can help you determine the insurance you’ll need to protect yourself and your business. Take the time to research the needs of your specific business.
For free mentorship from experienced executives, consider contacting the nonprofit SCORE. For basic answers about business insurance, consult services like LegalMatch and LegalZoom.
For smaller businesses or for specific business spending needs, credit cards can be a financing option. Here are two types of business credit cards:
0% APR business credit cards. With a 0% APR business credit card, you can make interest-free purchases for a limited time. However, you’ll need to pay off your balance before the end of the introductory period.
Balance transfer business credit cards. Balance transfer business cards let you move an existing credit card debt to your new balance transfer card. These cards often feature intro APR periods on balance transfers, letting you save big on interest.
You’ll need to set up a US business bank account to manage your finances. However, finding the right account will depend on your business spending requirements and structure. For example, are you looking for a high-interest account to build a savings balance, or do you want minimal fees to look after your everyday transactions? Will you need a branch nearby, or are you happy handling your transactions through online banking?
With so many account options, there are plenty of business banking solutions to choose from. The same goes for business credit cards.
You can safely and affordably manage your business payments — with lower fees and stronger exchange rates — by comparing the services of a money transfer specialist.
What documentation will I need to set up my business?
Articles of incorporation. If you’re looking to form a corporation, you’ll need to file your articles of incorporation with your state. This set of documents marks your intent to create a corporation with details as to your services or products, how you run your company and any stock you’ll issue, among other information. You might benefit from a professional early to keep the legality of the articles aboveboard.
The scope of your business. A solid business plan can help secure funding early on and provides a road map to better guide your ambitions.
Where do I file my information?
Depending on the size of your business and your industry, you may need to file with federal, state and local agencies. The Small Business Administration provides useful information to businesses about when, where and why you might need to register with more than one agency.
Should I hire a professional to help me?
Though you aren’t required to hire a professional to start your business, an expert in your field could help prevent future problems. Research your industry thoroughly to determine if you can benefit from the extra input. If you’re an industry expert yourself, you might be comfortable skipping this one to chip away at already steep startup costs.
How to start a business as an immigrant
Many immigrants in search of the American dream hope to start up and grow their very own business into a thriving enterprise. If you have that can-do, entrepreneurial spirit, the possibilities within the US business sphere provide many opportunities for business success.
Before coming to US, you’ll need to ensure that you have the correct business-specific visa in place. There are two broad visa categories for entrepreneurs:
Immigrant visas. For those who intend to move the US permanently.
Nonimmigrant visas. For those who intend to return to their home country.
Visas specific to those who intend to see permanent residency include:
If you have proof of outstanding abilities in science, art, education, athletics or business, this visa can help you start a business in your field. But you must show that you are among the best of the best in your specialty.
Once you’ve nailed down your plan, it’s important to select the right type of business structure. The US is a huge market to put a foot in and expand out of, so don’t be afraid to start building your customer base locally.
Frequently asked questions
Yes, though you might get away with an outline of a business plan. Most small businesses fold within the first five years. A solid plan provides clear direction, potentially improving your chances of long-term success.
Many types of loans and alternative sources of financing are available. Compare your options among many lenders to find the most affordable financing you’re eligible for.
How much you’ll pay in taxes depends on your business structure, the state you operate in and other factors. The Small Business Administration’s site provides useful tools that can simplify the taxes you can expect to pay and when.
The US has many business regulations on the books. And each industry has its own specific rules and regulations, which constantly change with politics and reforms.
Before buying a business in US, research the rules and regulations of your specific industry or market to avoid potential problems.
In general, if you’re here with a green card or an appropriate visa — such as the E-2 Investor Visa — you should be able to buy or invest in a business in US.
In fact, if you have a healthy amount of money to invest, you may be able to obtain what is known as a Green Card Through Investment. To start, you’ll need to invest $1 million or at least $500,000 in a rural or high unemployment area. If you meet other criteria, the US Citizenship and Immigration Services may grant you and your family conditional permanent residency.
Adrienne Fuller is the head of publishing at Finder US. With a decade of experience creating guides in finance and education, she aims to deliver the accurate and transparent information she wishes she had when she made some of life's important financial decisions. For the past 3 years she has been the publisher of money transfers, helping readers save when they send money all over the globe. She has a BA from Colorado College and loves to hike with her two Catahoula dogs around her home in San Diego.
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