Numerous digital entrepreneurs and established businesses are considering the United States as a location for company establishment for a variety of reasons, including tax savings and the opportunity to enter the U.S. market. Nevertheless, non-residents may encounter difficulties when attempting to establish a U.S. bank account, which is a critical component of business operations.
Why Do You Need A U.S. Bank Account For Your U.S. Company?
For the purpose of managing financial transactions, paying employees, receiving payments from U.S. clients, or receiving settlements from payment gateways like Stripe or PayPal, it is essential to have a U.S. business bank account. Having a local account also assists in the reduction of currency exchange fees and the maintenance of seamless operations in the U.S. market.
The absence of a U.S. bank account may result in your company experiencing challenges with payment processing or even delays in significant business transactions, which can restrict its development and expansion.
Why It Is Hard To Open U.S. Bank Account For Non-Residents?
The process of opening a bank account for your U.S. company as a non-resident owner can be complex, predominantly due to the regulatory measures that U.S. financial institutions have implemented:
- KYC Requirements: In order to establish accounts, U.S. institutions are legally mandated to verify the identities of both individuals and businesses. Non-residents may not possess a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN). This frequently comprises these numbers.
- Verification of U.S. Presence: Numerous banks require non-resident companies to provide either a tangible U.S. address or evidence of U.S. operations, which is not always readily available.
- In-Person Requirement: In order to establish an account with certain U.S. institutions, the business owner must be physically present. This can be a challenge for non-residents who are based abroad.
In spite of these obstacles, there are viable alternatives and feasible solutions to contemplate.
How To Open U.S. Bank Account For Your Non-Resident Company
As a non-resident proprietor, you can establish a U.S. bank account for your business by following these steps:
1. Incorporate a U.S. Entity
The establishment of a U.S.-based business entity is the initial step in the process of establishing a U.S. bank account. The formation of a C Corporation or an LLC is a common option. The incorporation procedure entails the selection of a U.S. state, the registration of your business name, and the submission of the necessary paperwork.
The business-friendly regulations, tax benefits, and relatively simple formation processes of certain states, such as Delaware, Wyoming, and Nevada, make them particularly popular among non-residents.
2. Obtain an Employer Identification Number (EIN)
Upon the incorporation of your company, you will be required to obtain an EIN from the IRS. Your company’s EIN serves as a federal tax identification number and is essential for the establishment of a bank account in the United States.
Non-residents may apply for an EIN online through the IRS website, regardless of their lack of a Social Security Number. The procedure is simple; however, it may require several weeks to obtain your EIN.
3. Gather the Necessary Documentation
In order to establish a business bank account in the United States, you will be required to submit a collection of documents. Typically, these consist of:
- Articles of Incorporation: Evidence that your business is legally registered in the United States.
- EIN Confirmation: The letter or document that you received from the IRS confirming your EIN.
- Operating Agreement or Bylaws: This document delineates the ownership and management structure of your organization.
- Proof of Address: Banks frequently necessitate a business address in the United States. This may refer to either a company’s physical location or a virtual address service.
- Personal Identification: A valid passport and, if applicable, an additional form of identification, such as a driver’s license.
Depending on the state or type of business entity you have established, certain institutions may also request supplementary documentation.
4. Find a Right Bank
Not all banks in the United States are equally willing or able to accommodate non-resident enterprises. Consequently, it is crucial to conduct a thorough investigation prior to selecting a bank. There are several variables to evaluate:
- International-Friendly Banks: There are numerous digital banks that are designed to accommodate international clients or startups with non-resident proprietors. These institutions may provide greater flexibility in terms of in-person requirements and documentation. If you would like to receive a list of such banks, please complete our contact form with your information, and we will deliver it to you via email.
- Account Fees and Services: Evaluate the availability of other business services, such as currency exchange or international SWIFT transfers, as well as the varieties of accounts offered, monthly fees, and wire transfer costs.
5. Use a U.S. Registered Agent
If you do not possess a tangible address in the United States, you may utilize a registered agent service. A third party, known as a registered agent, is accountable for receiving official correspondence on behalf of your company. The majority of these services also offer a U.S. mailing address, which can satisfy your bank’s physical presence requirements.
Final Thoughts
Opening a U.S. business bank account as a non-resident may appear to be an overwhelming task; however, it is feasible with appropriate preparation. The key actions outlined in this article will assist you in opening an account and completing it within a few weeks.