A Practical Guide for Newcomers

Starting a business after moving to the USA can be both exciting and challenging, as newcomers navigate a new environment and unfamiliar regulations. From identifying viable opportunities to understanding the steps required to operate legally, preparation is crucial for a smooth launch.

Learning the essential actions to take when starting a business in the USA helps new arrivals build a solid foundation and avoid common obstacles. This article gives an overview of the key steps involved so aspiring business owners can begin their journey with clarity and confidence.

1) Choose the US state for business formation

Selecting the right state to form a business is an important decision for anyone moving to the USA. Each state has its own laws, requirements, and fees, which can impact how the business operates and what it costs to maintain.

Some states, like Delaware, Nevada, and Wyoming, are popular for their business-friendly regulations and low fees. Others may offer advantages based on tax rates, privacy, or legal protections for business owners. It is important to compare how each state handles issues such as annual fees, formation costs, and ongoing reporting.

Where the business owner lives or plans to operate also matters. Forming a business in a different state can create extra filing requirements and administrative work. Many new business owners choose their home state for simplicity unless there is a clear benefit elsewhere.

Careful research into each state’s requirements and costs can help ensure the business is set up under the best possible conditions. State websites and official resources provide guidance about registrations, compliance needs, and local taxes.

2) Select your business legal structure (LLC, corporation, etc.)

Choosing the right legal structure is an important step for anyone starting a business in the USA. The business structure affects taxes, liability, and other legal obligations.

Common options include Limited Liability Company (LLC), corporation, sole proprietorship, and partnership. Many new business owners select an LLC for its flexibility and personal liability protection. Corporations, including S and C corporations, offer more options for raising capital but have stricter regulatory requirements.

Sole proprietorships and partnerships are easier to set up but do not provide liability protection. Each structure has different tax implications and administrative requirements.

Business owners should consider factors such as the number of owners, plans for growth, and desired level of legal protection when deciding. Consulting with a legal or tax professional can help determine the best fit for their needs.

3) Register your business with state authorities

After choosing a legal structure, the next step is to register the business with the appropriate state authorities. The business structure will determine the specific registration process and forms required. In most states, registration is handled through the Secretary of State’s office.

A business name must be selected and checked for availability. This ensures that no other registered entity in the state is using the same or a confusingly similar name. Once verified, an application is submitted with the selected name and required information.

Corporations, LLCs, and certain partnerships usually need to file formation documents such as Articles of Incorporation or Organization. Sole proprietorships often do not need to register at the state level unless operating under a trade name.

State-specific fees apply and can vary widely. Sometimes, additional licenses or permits may be necessary depending on the type of business and location. Timely and accurate registration with state authorities helps protect the business and meets key legal requirements for operating in the USA.

4) Obtain an Employer Identification Number (EIN) from the IRS

An Employer Identification Number (EIN) is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify a business for tax purposes. Most new businesses in the United States will need an EIN, even if they do not have employees.

An EIN is required to open a business bank account, apply for licenses, and file federal taxes. Corporations, partnerships, and certain types of sole proprietorships are all required by law to have one. Some banks and vendors may also ask for an EIN before doing business.

The application process is straightforward and free. The most common way to apply is online through the IRS website. The application only takes a few minutes and provides an EIN immediately after completion.

Applicants can also apply by fax or mail using IRS Form SS-4. International applicants have the option to apply by phone. Make sure to keep the official EIN confirmation letter for business records and future reference.

5) Apply for necessary licenses and permits

Before operating a business in the USA, owners must secure all required licenses and permits. These requirements depend on the business type, location, and industry.

Federal, state, and local governments may each have their own licensing rules. Some businesses need specific federal permits, especially if they handle alcohol, firearms, or transportation.

At the state and local levels, common permits include health permits, building permits, and sales tax licenses. Business owners should check with the relevant agencies to identify everything needed.

Failing to get the correct licenses can lead to fines or even closure. It's important to gather all necessary documentation before submitting any applications.

Processing times and fees for permits vary. Business owners should start this step early to avoid delays.

6) Open a US business bank account

Opening a business bank account in the US keeps business and personal finances separate. This is important for tracking expenses, managing taxes, and building a professional presence.

To start, most banks require documents such as the business's formation paperwork, a federal Employer Identification Number (EIN), and personal identification. The business address and contact details are usually needed as well.

Some banks may require a small opening deposit, but amounts vary. Account options can differ, so it's helpful to compare banks and choose an account that fits the business’s needs.

The account owners and any authorized signers must be listed. Having a US-based phone number or address may be required by some banks.

A US business bank account helps the business accept payments, pay expenses, and manage day-to-day finances more efficiently. It also adds legitimacy when dealing with clients and vendors.

7) Develop a comprehensive business plan

A well-prepared business plan is critical for anyone starting a business in the USA. It serves as a roadmap for how the business will operate, grow, and handle potential challenges.

The plan should include a clear description of the business, market analysis, and the products or services offered. This helps clarify the company’s objectives and how it plans to reach customers.

Financial projections are important. Investors and banks often require detailed information on expected expenses and revenue. Laying out these details can help identify potential funding needs.

The plan should also cover the business structure, marketing strategy, and daily operations. Outlining each area gives a realistic view of how the business will run.

Including measurable goals and timelines can help track progress. Having all of this information in one document supports better decision-making and increases the chance of success.

8) Conduct market research relevant to your industry

Anyone starting a business in the USA should begin with market research focused on their chosen industry. This involves gathering facts about potential customers, competitors, and market trends. It helps identify opportunities and possible challenges.

They can use surveys, interviews, and online research to collect feedback directly from target customers. Exploring demographic data gives insight into who might be interested in their product or service. This information can guide early business decisions, like pricing and marketing strategies.

Analyzing competitors is another important step. New business owners should look at the strengths and weaknesses of similar companies in their market. This allows them to find gaps they can fill or ways to differentiate their offerings.

Industry reports and government statistics provide a reliable source of current trends and demand. They should also research local regulations and any cultural factors that could affect their business approach. By focusing on verified data and thoughtful analysis, entrepreneurs can better understand their industry before launching.

9) Secure funding through loans or investors

Once a business plan is in place, securing funding becomes the next step. Many new business owners in the USA turn to loans, grants, or private investors for financial support.

Traditional bank loans require proof of creditworthiness and a solid business plan. Some also look into loans backed by the Small Business Administration, which may offer favorable terms for newer residents.

Investors are another option. Venture capital firms or angel investors provide funding in exchange for equity or a future return. Applicants usually need a strong pitch to attract investment.

Crowdfunding platforms are growing in popularity. These allow entrepreneurs to raise smaller amounts from many people, often in exchange for early access to products or other rewards.

Each funding source comes with its own requirements and risks. It is important to thoroughly review options and understand the responsibilities involved. Seeking advice from financial professionals can help ensure a sound decision.

10) Apply for an entrepreneur visa if needed (E2, L1, etc.)

Non-citizens planning to start and work for a business in the USA usually need an appropriate visa. Two common options for entrepreneurs are the E2 and L1 visas.

The E2 visa is for those who invest a substantial amount of money in a US business. To qualify, the business must be real and operating, and the applicant must be from a treaty country.

The L1 visa allows company owners or managers to transfer from an existing business abroad to a new or existing US branch. The applicant must have worked for the foreign business for at least one year within the last three years.

These visas do not grant permanent residency but provide a way to legally work and manage a business in the United States. Requirements and eligibility vary, so applicants should review official guidance or seek legal advice.

Legal Considerations for New Immigrant Entrepreneurs

Immigrant entrepreneurs in the USA must address both immigration status and business formation requirements. Attention to these legal steps reduces risks and increases the chances of a smooth start.

Understanding Visa and Work Authorization

A person’s immigration status determines if they can legally work and run a business in the United States. There is no specific visa solely for entrepreneurs, so immigrants often rely on existing options. Common choices include the E-2 Treaty Investor Visa, L-1 Intracompany Transferee Visa, and, in select cases, the EB-5 Immigrant Investor Program. Eligibility for these visas depends on factors such as country of origin, level of investment, and business plan.

Working without proper authorization can result in penalties or removal from the country. Before starting a business, it is important to check which visas allow for self-employment or direct business management. Some visas, like F-1 or B-1, typically do not permit work authorization and may not be suitable for starting a business.

Registering a Business Entity

All entrepreneurs in the USA must register their businesses at state and sometimes local levels. Choosing the right entity type—such as a sole proprietorship, partnership, limited liability company (LLC), or corporation—affects taxes, liability, and registration requirements. Non-citizens can generally form entities like LLCs or C Corporations, even if they do not have permanent residency or citizenship.

Important documents may include Articles of Incorporation or Organization, Employer Identification Number (EIN) application, and local permits. An EIN is needed to open a business bank account and pay taxes. Some states may have additional requirements or restrictions based on the owner’s immigration status, so it is advisable to review local laws carefully.

Building a Strong Foundation in the U.S. Market

Establishing a business in the U.S. requires understanding local laws and creating real connections within the community. Focusing on these aspects can help new entrepreneurs operate more smoothly and earn early trust from customers and partners.

Adapting Business Practices to U.S. Regulations

Compliance with U.S. federal, state, and local laws is critical from the start. New business owners need to register the business with the appropriate state agency, obtain an Employer Identification Number (EIN), and meet licensing requirements for their industry.

Labor regulations, tax codes, and consumer protection laws may differ drastically from other countries. Paying attention to rules on employee rights, workplace safety, and data privacy is essential, as penalties for non-compliance can be significant.

Key regulations business owners should address include:

Business Structure: Choose an appropriate legal structure (LLC, corporation, sole proprietorship, etc.)
Tax Obligations: Register for federal and state taxes, and understand sales tax requirements.
Permits and Licenses: Acquire necessary permits at state and local levels.
Employment Laws: Learn about wage standards, anti-discrimination rules, and required insurances.

Consulting with legal or tax professionals familiar with U.S. business law is often a smart early investment.

Networking and Community Integration

Forging local connections helps new businesses access resources, build credibility, and learn about market preferences. Joining local chambers of commerce, attending regional business events, and participating in industry trade groups are effective first steps.

Getting involved in community activities can lead to important referrals and collaborations. Building relationships with nearby business owners or participating in local mentorship programs provides insight into customer expectations and business norms.

Practical ways to integrate include:

Community Events: Sponsor or attend gatherings relevant to the business’s target audience.
Business Associations: Become a member of industry-specific organizations or local business alliances.
Online Networks: Use platforms like LinkedIn or business-specific forums to connect with local professionals.

Consistent participation helps business owners understand the local landscape and gain visibility in their new market.

10 Steps to Starting a Business After Moving to the USA