Advantages of creating a business entity in United States and our experience forming an LLC with Incfile and availing ITIN with Seva Ltd.

There are several advantages to opening a business entity in the United States, including:

1. Large Market: The United States is the world’s largest consumer market, offering vast opportunities for businesses of all sizes.
2. Ease of Doing Business: The United States is ranked among the top countries in the world for ease of doing business, with a well-developed legal system, efficient bureaucracy, and strong intellectual property protections.
3. Access to Capital: The United States has a deep and sophisticated financial system, offering access to capital from a wide range of sources, including venture capital firms, angel investors, and public markets.
4. Skilled Workforce: The United States has a highly skilled and educated workforce, with a strong emphasis on innovation and entrepreneurship.
5. Political Stability: The United States is a stable democracy with a long history of political stability, making it a safe and secure place to do business.
6. Favorable Tax Environment: While tax rates can vary depending on the state and type of business, the United States generally has a favorable tax environment for businesses, with a variety of tax incentives and deductions available.
7. Access to Resources: The United States has a wealth of resources, including land, minerals, and energy, which can be beneficial for businesses involved in manufacturing, agriculture, and other industries.

Overall, the United States offers a highly favorable environment for businesses, with a combination of market size, ease of doing business, access to capital, skilled workforce, political stability, tax benefits, and access to resources.

Our experience in forming an LLC with Incfile

First of all, decide the structure of your entity. Just like in India we have options like sole proprietorship, partnership, private limited company, so is the case in United States with the following entity types:

1. Limited Liability Company (LLC): Recommended for residents from India willing to explore US market while residing in India.
2. S-Corporation
3. C-Corporation
4. Non Profit Corporation

Know more about them here: Choose the right type of entity for starting your new company!

Once you decide on the entity type, next step would be to choose from which US state you incorporate your chosen entity.

With Incfile, you can check the state fee for company incorporation (15 Cheapest States to Form an LLC in the U.S), if your chosen business name available or not, and incorporate for free. You will be just charged the state fee for the first year.

What’s more, you need a mandatory Registered Agent Address that will be taken care for free for the first year by Incfile.

Once you have your LLC created (or incorporated), another mandatory step would be as a foreigner to apply for IRS Individual Taxpayer Identification Number (ITIN). Without it, you cannot have your bank account in the name of LLC. Also, you would need to file tax returns each year. So you will definitely need an ITIN before that in order to maintain your LLC in active state. This ITIN application can be done by yourself for free by mailing your W-7, tax return, proof of identity, and foreign status documents to:

Internal Revenue Service
Austin Service Center
ITIN Operation
P.O. Box 149342
Austin, TX 78714-9342

https://www.irs.gov/individuals/how-do-i-apply-for-an-itin

You either need to mail your original documents or certified copies from the issuing agency. Mailing your original passport might not be something many will be comfortable with. Again issuing certified copies is a bureaucratic process that will test your patience while dealing with bureaucracy as in passport offices in India.

Unfortunately, Incfile do not assist with the ITIN number, they only assist with the EIN number (meant for US residents and not foreigners) which is $70.

Given the third option of making an appointment at a designated IRS Taxpayer Assistance Center not relevant for most use cases, I decided to go with the second option of applying for an ITIN in-person using the services of an IRS-authorized Certifying Acceptance Agent as this will prevent from having to mail proof of identity and foreign status documents. Availed services of Seva Ltd. in this regard.