How to incorporate a US Corporation from outside the USA? by M. Girish

Someone shared this today, thought it may be useful for entrepreneurs looking at US.

When we started,we decided to incorporate in the USA because that seemed to be best option for a SAAS company that wanted to handle recurring payments from international customers from day 1. Our preferred payment gateway will work only with US bank accounts and it is easier to get a US bank account if you are a USA corporation.We are based out of India and the options for accepting dollar payments with recurring billing were seriously limited and expensive.The only option seemed to be Paypal but again we were not sure if we could link Paypal with our Indian bank accounts for USA payments.

Since there were not many resources available on the web for incorporating a US corp from abroad I thought I will share our story for the benefit of future entrepreneurs.

Ofcourse there are many other ways to do this – but this is how we did it.

1. Incorporation – in the State of Delaware as a Delaware C Corp.

If you ask “Why Delaware” ? – We couldn’t find anything convincing for “Why not” ?

Total cost for incorporation – $1278

Break up

Lawyer Fees – $1005(Ryan Roberts at http://startuplawyer.com/) I would highly recommend Ryan. He was very professional and knowledgeable and very easy to work with thru email and skype. He charged us a flat fee for the full service startup incorporation package and this included

Memorandum of Association, Articles of Association, Restricted Stock Purchase agreements, Technology Transfer agreements, Proprietary Information agreements etc.

Incorporation fees – 148 (Delaware C Corp)

Registered Agent fees – $125 (This is a yearly fee) (Bloomberg Excelsior Business Services)

(A registered agent service is mandatory to incorporate a delaware corporation if you live outside Delaware)

2. Employer ID Number (EIN – TAX Number)

Every business in the US needs a EIN number. (also known as Tax ID number) After Incorporation docs are ready, fill form SS4 and call the IRS Philadelphia center directly at

(800) 829-4933. (This is the only office in the US that processes EIN for US business that are incorporated from foreign countries.

They will give you the EIN on the phone. It may be helpful if you have a fax nearby at the time of calling. (You can fax the filled SS4 form to them so that you don’t have to spell out all the details on the phone)

3. US Physical Address

You need a physical US address for receiving business documents .There are several mail service forwarding providers charging different rates.

My choice was Virtualpostmail.com – a web 2.0 company who seemed to be miles ahead of others in what seems to be a very traditional industry. I chose the $20 plan.

They scan mails and send an email, you can choose emails that needs to be opened and the contents scanned or just forward those mails to any other international address.

Before you can operate your account you need to submit a notarized form 1583 from USPS to authorize Virtual Post mail to open mails on your (and your companies behalf)

4. US Bank Account

You need a Business checking account with a US bank. If you already have a personal bank account with a US bank you can try calling them to open a business checking account. I think this is the best option. I tried calling Wells Fargo and the person on the phone told me that I cannot open a bank account with Wells Fargo and that I had to physically go to Delaware and try opening it from Wachovia. I am sure this person was wrong and I think it should be possible with Wells Fargo. I love the bank but somehow could not get my business account opened there.

If you do not have a US bank account but if you are visiting USA in the near future, you can just walk in to a bank with the incorporation documents of your company and open an account.

I posted a question regarding this in Quora (www.quora.com) and a very nice gentleman who was an advisor to many startups contacted me and referred me to Silicon Valley Bank(http://www.svb.com) (who are considered very startup friendly) and I was able to open the account from India itself.

Initially I found it amusing when I was asked to pitch my business idea or send a presentation of my business plan in order to open a business checking account. But I guess Silicon Valley bank offers so many other services to startups but our needs were pretty simple. But SVB has been great till now in terms of responsive support.

5. Merchant Account

The most popular alternatives are Paypal and Authorize.net (they have many resellers) You can go to http://feefighters.com/ to compare providers and choose one that works for you. I skipped the options provided by feefighters and went directly with Braintree Payment solutions even though they were slightly more expensive compared to others as I had read good things about them and I did not understand all the hidden fees etc.

Braintree provides me a merchant account, a payment gateway, a PCI compliant vault to store customer Credit card data and can process recurring subscription billing.

We thought we will worry about the fees when we are making millions of dollars and losing considerable money on fees :)

6. Business Credit Card

I applied for a mastercard credit card through Silicon Valley Bank – the card is secured with a money market account – basically secured with cash in my bank account.

7. US Phone Numbers

We have a free Google Voice number and a Skype Out number which is $50 per year.

The google voice number forwards the calls to our skype number.

We are considering 1-800 numbers from Grasshopper after we launch.


Thats pretty much all you need to get the business side of things setup. The only other thing you need is a good product for which customers are willing to open their wallets and swipe their credit cards. (Oh. Ok. Maybe for some of you thats not a requirement for a successful startup! more  

Thank you for sharing. Ajay more  
Very useful info more  
Great info. Thanks for sharing. Really useful.

Thanks and Regards,

Samir Datt
www.forensicsguru. com

Sent via Mobile Device.

Ajay Shah <support@localcirclesmail.com> wrote:

>---REPLYABOVETHISLINETOPOSTACOMMENT-AjayShahAjayShahpostedamessagein"DoingBusinessandEntrepreneurshipinDelhi/NCR".Subject:HowtoincorporateaUSCorporationfromoutsidetheUSA?byM.Girish.Someonesharedthistoday,thoughtitmaybeusefulforentrepreneurslookingatUS.Whenwestarted,wedecidedtoincorporateintheUSAbecausethatseemedtobebestoptionforaSAAScompanythatwantedtohandlerecurringpaymentsfrominternationalcustomersfromday1.OurpreferredpaymentgatewaywillworkonlywithUSbankaccountsanditiseasiertogetaUSbankaccountifyouareaUSAcorporation.WearebasedoutofIndiaandtheoptionsforacceptingdollarpaymentswithrecurringbillingwereseriouslylimitedandexpensive.TheonlyoptionseemedtobePaypalbutagainwewerenotsureifwecouldlinkPaypalwithourIndianbankaccountsforUSApayments.SincetherewerenotmanyresourcesavailableonthewebforincorporatingaUScorpfromabroadIthoughtIwillshareourstoryforthebenefitoffutureentrepreneurs.Ofcoursetherearemanyotherwaystodothis–butthisishowwedidit.1.Incorporation–intheStateofDelawareasaDelawareCCorp.Ifyouask“WhyDelaware”?–Wecouldn’tfindanythingconvincingfor“Whynot”?Totalcostforincorporation–$1278BreakupLawyerFees–$1005(RyanRobertsathttp://startuplawyer.com/)IwouldhighlyrecommendRyan.Hewasveryprofessionalandknowledgeableandveryeasytoworkwiththruemailandskype.HechargedusaflatfeeforthefullservicestartupincorporationpackageandthisincludedMemorandumofAssociation,ArticlesofAssociation,RestrictedStockPurchaseagreements,TechnologyTransferagreements,ProprietaryInformationagreementsetc.Incorporationfees–148(DelawareCCorp)RegisteredAgentfees–$125(Thisisayearlyfee)(BloombergExcelsiorBusinessServices)(AregisteredagentserviceismandatorytoincorporateadelawarecorporationifyouliveoutsideDelaware)2.EmployerIDNumber(EIN–TAXNumber)EverybusinessintheUSneedsaEINnumber.(alsoknownasTaxIDnumber)AfterIncorporationdocsareready,fillformSS4andcalltheIRSPhiladelphiacenterdirectlyat(800)829-4933.(ThisistheonlyofficeintheUSthatprocessesEINforUSbusinessthatareincorporatedfromforeigncountries.TheywillgiveyoutheEINonthephone.Itmaybehelpfulifyouhaveafaxnearbyatthetimeofcalling.(YoucanfaxthefilledSS4formtothemsothatyoudon’thavetospelloutallthedetailsonthephone)3.USPhysicalAddressYouneedaphysicalUSaddressforreceivingbusinessdocuments.Thereareseveralmailserviceforwardingproviderschargingdifferentrates.MychoicewasVirtualpostmail.com–aweb2.0companywhoseemedtobemilesaheadofothersinwhatseemstobeaverytraditionalindustry.Ichosethe$20plan.Theyscanmailsandsendanemail,youcanchooseemailsthatneedstobeopenedandthecontentsscannedorjustforwardthosemailstoanyotherinternationaladdress.Beforeyoucanoperateyouraccountyouneedtosubmitanotarizedform1583fromUSPStoauthorizeVirtualPostmailtoopenmailsonyour(andyourcompaniesbehalf)4.USBankAccountYouneedaBusinesscheckingaccountwithaUSbank.IfyoualreadyhaveapersonalbankaccountwithaUSbankyoucantrycallingthemtoopenabusinesscheckingaccount.Ithinkthisisthebestoption.ItriedcallingWellsFargoandthepersononthephonetoldmethatIcannotopenabankaccountwithWellsFargoandthatIhadtophysicallygotoDelawareandtryopeningitfromWachovia.IamsurethispersonwaswrongandIthinkitshouldbepossiblewithWellsFargo.Ilovethebankbutsomehowcouldnotgetmybusinessaccountopenedthere.IfyoudonothaveaUSbankaccountbutifyouarevisitingUSAinthenearfuture,youcanjustwalkintoabankwiththeincorporationdocumentsofyourcompanyandopenanaccount.IpostedaquestionregardingthisinQuora(www.quora.com)andaverynicegentlemanwhowasanadvisortomanystartupscontactedmeandreferredmetoSiliconValleyBank( target="_blank" href="http://www.svb.com">http://www.svb.com)(whoareconsideredverystartupfriendly)andIwasabletoopentheaccountfromIndiaitself.InitiallyIfounditamusingwhenIwasaskedtopitchmybusinessideaorsendapresentationofmybusinessplaninordertoopenabusinesscheckingaccount.ButIguessSiliconValleybankofferssomanyotherservicestostartupsbutourneedswereprettysimple.ButSVBhasbeengreattillnowintermsofresponsivesupport.5.MerchantAccountThemostpopularalternativesarePaypalandAuthorize.net(theyhavemanyresellers)Youcangotohttp://feefighters.com/tocompareprovidersandchooseonethatworksforyou.IskippedtheoptionsprovidedbyfeefightersandwentdirectlywithBraintreePaymentsolutionseventhoughtheywereslightlymoreexpensivecomparedtoothersasIhadreadgoodthingsaboutthemandIdidnotunderstandallthehiddenfeesetc.Braintreeprovidesmeamerchantaccount,apaymentgateway,aPCIcompliantvaulttostorecustomerCreditcarddataandcanprocessrecurringsubscriptionbilling.Wethoughtwewillworryaboutthefeeswhenwearemakingmillionsofdollarsandlosingconsiderablemoneyonfees:)6.BusinessCreditCardIappliedforamastercardcreditcardthroughSiliconValleyBank–thecardissecuredwithamoneymarketaccount–basicallysecuredwithcashinmybankaccount.7.USPhoneNumbersWehaveafreeGoogleVoicenumberandaSkypeOutnumberwhichis$50peryear.Thegooglevoicenumberforwardsthecallstoourskypenumber.Weareconsidering1-800numbersfromGrasshopperafterwelaunch.Thatsprettymuchallyouneedtogetthebusinesssideofthingssetup.Theonlyotherthingyouneedisagoodproductforwhichcustomersarewillingtoopentheirwalletsandswipetheircreditcards.(Oh.Ok.Maybeforsomeofyouthatsnotarequirementforasuccessfulstartup!ReplyReplytothisemailtopostacomment.Postedto:IfyoubelievethatthispostisinappropriateforthisCircle, ClickHeretoreportit.Thisemailwassenttoskd@forensicsguru.com.Ifyoudon'twanttoreceiveemailsfromLocalCirclesinfuture,pleaseUnsubscribe.LocalCircles,Inc.,1556HalfordAve.,Suite290,SantaClara,CAUSA95051.107UrbtechMatrixTower,PlotNo.B-4,Sector-132,Noida,India,201304.PrivacyPolicy. more  
Post a Comment

Related Posts

    • State of the economy

      Good insights on what could be done to address the economy but given the collection challenges of gst and direct tax how can the govt boost rural give away.

      By Sudesh Rai
      /
    • GST

      20% of tax GST tax payers account for 80% of tax . the GST filing should be simplified to a large extent. I am also a registered GST member without appreciable turn over. The gst form can not be u...

      By Subramanian Venkataraman
      /
    • Is GST about to hurt genuine businesses - well it seems like

      The Govt is implementing new restrictions in availing input tax credits. So far, businesses have been claiming input tax credit based on their own invoices. For instance businesss &lsqu...

      By Vishal Khanna
      /
    • Banks shut on 11 days this month

      How do we as a country call ourselves open for business when our banks are closed 1/3rd of the time. 2 October Gandhi Jayanti 6 October Sunday 7 October Navami 8 October ...

      By Sudesh Rai
      /
    • Duty Cuts on Chinese Imports - 80% items

      I read the headline India may cut duties on 80% chinese imports. At a time when the entire domestic industry is under tremendous slowdown there cant be a policy that allows India to get ...

      By Rohit Jain
      /
    • China Sellers on ecommerce

      This is how they sell. Selling by live streaming on 40 different sites at the same time. Where is the Indian ecommerce seller - probably in some Govt office dealing with an inspector and making him...

      By Sujata Singh
      /
    • Smart Move

      Very smart move by FM. Firms can now choose to pay a higher rate & claim tax breaks or pay a lower rate with no tax breaks. Maybe many of the big firms crying about high tax rates will suddenly...

      By Naina Mittal
      /
    • Big boost bh Govt

      Cut in corporate tax to 22% is the boldest taxation reform by the govt. Will reignite corporate investment, bring back animal spirits in the economy, boost the stock market, stabilise the rupee. Th...

      By Sridhar Mohan
      /
    • Looking for Factories for Export to USA

      Looking for factories of Leather goods, belts, PU Shoes for exports to USA, the buyer is coming next week to Delhi, Kanpur and Agra

      By Kush Agarwal
      /
    • Tax Filing dates for companies

      Can the current deadline of tax filing date of sept 30th be extended to Nov 30th. Companies as well as proprietorship business are under lots of stress most behind on cash flow and reven...

      By Sudesh Rai
      /
    • This is not just moving from cars to app taxis

      Some people are saying no one wants to buy a car because people are taking ola/uber these days. This seems to be deeper. Ashok leyland sales halved in august 2019 sales fell for 5t...

      By Vishal Khanna
      /
Share To
Enter your email & mobile number and we will send you the instructions

Note - The email can sometime gets delivered to the spam folder, so the instruction will be send to your mobile as well

Please select a Circle that you want people to invite to.
Invite to
(Maximum 500 email ids allowed.)