What is a Non Resident Business: Everything You Need to Know
A non-resident business entails a person who primarily resides in a certain jurisdiction or region but maintains interests in another area. 3 min read
2. Citizenship by Investment
3. Benefits of Delaware
A non-resident business entails a person who primarily resides in a certain jurisdiction or region but maintains interests in another area. In the region where that person primarily resides, that person will be designated by officials as a non-resident. The classification would be determined in each area based on certain parameters in the form of the time residing in the region during the year.
The classification is centered on where the individual resides and does not include citizenship. For instance, many people live in a certain state but have business interests in a separate region and generate income from that area. If a non-resident garners income that’s taxable in a different region, that person must file a different tax return within the area compared to the resident of the region. In other instances, a non-resident usually pays more to attend a university in a state where that person does not live.
Non-residents may create a legal entity in the United States, but foreigners are usually not aware of such an allowance. They may think that creating a company requires that they be U.S. citizens. Access to the U.S. market is important to success for many companies internationally. The most important way to gain access to the U.S. market is via an American business. The U.S. market provides some of the largest markets at low tax rates.
In addition, another benefit of creating a business in the U.S. would be the tax advantages. Also, owners would gain access to the following:
- Public markets
- Venture capital
Moreover, your company would get a boost in reputation in the nation and other areas of the world. Once a company enters the public domain, it can be recorded on the U.S. stock market, and the public may buy shares in your company. Another benefit of beginning a company in the U.S. would be the liability protections it entails. Further, it would be easy to obtain a work visa in the U.S., but this is not guaranteed.
Even though non-residents must undergo the same procedures as people living in the country when creating a business, they must meet certain limitations and conditions that are restricted to people of foreign status. Foreigners must do the following that citizens cannot:
- Pay international taxes
- Get a visa
- Create a bank account
Foreigners can create a corporation or limited liability company (LLC). With that, the S corporation is solely exclusive to residents or U.S. citizens because non-residents cannot be shareholders within a company. However, foreigners can be shareholders of a C corporation, and it is an attractive option to foreigners despite the drawback of double-taxation.
Citizenship by Investment
Citizenship by investment occurs when a person gets citizenship in another nation through the investment of a certain amount in that nation. Many nations such as Cyprus, Russia, and Austria allow such a transaction. In the U.S., a certain type of citizenship is also available through investment, which is a solid option if you intend to reside in the U.S.
It is also called “green card through investment” by U.S. Citizenship and Immigration Services. Foreign investors who choose to invest $1 million or $500,000 in certain areas with high employment levels, could be granted a conditional residency permit, including spouses and children under the age of 21.
U.S. companies receive incorporation via the state and federal levels. Nevada and Delaware are known for less regulations, which makes them appealing to foreign investors. With that, incorporating a company in such a jurisdiction does not give you exemption from obligations within states that carry high costs, such as California. Therefore, you would fare better by registering your legal entity in the state that you intend to operate. Most importantly, Delaware is the number one state with the best business laws, followed by Nevada.
Benefits of Delaware
Delaware is primarily recommended since state officials do not impose state income taxes on corporations. Moreover, Delaware is also recommended due to the state’s corporate laws being consistent, and Delaware has its own court called the Court of Chancery. The Court of Chancery is a court centered on hearing business cases, with judges hearing the cases, instead of juries.
To learn more about a non-resident business, you can post your need, or post your job on UpCounsel’s website. UpCounsel’s lawyers will provide more information on foreign investment and how you can gain residency if you are not a citizen. Moreover, they will guide you through the incorporation process in any state if you have never created a corporation before.