how to open a business in usa without an itin number

How to Open a Business in USA Without an ITIN Number

Foreign residents belonging to treaty countries desire to form business in the United States. Nevertheless, United States of America is one of the states which shares multiple benefits and provides lucrative opportunities to business owners. But forming an organization or a business in the United States is not as easy as one may think. For this reason, most of the people ponder over how to open a business in USA without an ITIN number.

Starting a business in the US is a challenge as the procedure involves a lot of technicalities and complex matters. People need to strive and put efforts to get a visa. E2 visa is required for individuals who are either willing to form a business or work as an employee in the United States. E2 visa qualifies them for employment and directing and developing the business in the United States. But having an E2 visa will not be enough. In order to pay off the taxes for their living and business, individuals will have to get Tax ID numbers too.

Tax ID numbers include Individual Taxpayer Identity Number (ITIN), Social Security Number (SSN), and Employer Identity Number (EIN). Most of the people have a misconception that they require an ITIN number to establish a business in the USA, that is why they are often found asking how to open a business in USA without an ITIN number. People asking this query must keep in mind that in order to establish an organization in the USA, they require an EIN number and not an ITIN number.

In order to know pertinent information regarding how to open a business in USA without an ITIN number, keep reading this blog.

If you need any help in opening a business in USA without an ITIN number, please call us at 407-344-1012, or email us at info@freedomtaxfl.com .

Understand About the Tax ID Numbers (TIN)

As mentioned previously, foreign principal investors who wish to form a business in the United States, require Tax ID numbers. Before we jump on to the explanation of how to open a business in USA without an ITIN number, you must first understand about the Tax ID numbers. These numbers are considered identification numbers issues by the IRS authority for the tax laws and tax purposes. The Tax ID numbers consist of nine digits. All individuals require at least one number for fulfilling tax purposes.

The Tax ID numbers are of three types which include Social Security Numbers (SSNs), Individual Taxpayer Identification Number (ITINs) and Employer Identification Number (EINs). The ITINs and SSNs are given to individuals principal investors while the ones who are concerned about how to open a business in USA without an ITIN number, should remember that they are given EINs to establish a business or corporation.

Let’s briefly review the three forms of Tax ID numbers in order to understand the clear insight of how to open a business in USA without an ITIN number.

·      Social Security Number (SSN)

Before moving to the details of how to open a business in USA without an ITIN number, you must know that a Social Security Number (SSN) is granted to individual tax payers who have an obligation to file tax returns. This is a nine digit number and is provided by Social Security Administration (SSA). The people who are permanent residents and citizens of the United States need to have it. Also, at times temporary aliens also require it.

Those who need an SSN, they need to fill form SS-5 and the United States Citizenship and Immigration Services (USCIS) gives them the permission to issue the SSN number. Though, obtaining it is also a difficult task, once you obtain it, you can easily file your tax returns. All those who are worried about how to open a business in USA without an ITIN number, should know that an SSN number is also not required to form a business.

·      Individual Taxpayer Identification Number (ITIN)

Those who want to have a clear understanding of how to open a business in USA without an ITIN number; they first need to understand what an ITIN number is. ITIN number is granted to those individual tax payers who need to file their taxes, because of being employed in the United States. So people who are so concerned about how to open a business in USA without an ITIN number, they should keep in mind that it is not required to open a business.

These numbers are comprised of nine digits. Though, the range of the number was extended as per the modifications in the law. Those who are willing to have to an ITIN number, they have to fill form W-7 to file returns. The individuals who are not eligible for the SSN numbers, they are given ITIN numbers by the Internal Revenue Service (IRS) in order to fulfill the tax obligations.

·      Employer Identification Number (EIN)

People trying to explore and wanting to learn the core concept behind how to open a business in USA without an ITIN number, should read this section carefully. An Employer Identification Number is a number comprised of nine digits. This number is also known as Federal Tax Identification Number. However, there is another common misconception among people asking how to open a business in USA without an ITIN number, that they require either an SSN or an ITIN number to obtain EIN number, well, it is not so. You require neither of them to acquire an EIN number.

As the name denotes, it is granted by the Internal Revenue Service to the employers i.e. people who are willing to start a business in the United States. Hence, people who are asking how to open a business in USA without an ITIN number, they should remember that an ITIN number is for individuals who are willing to get an employment and EIN number is for individuals who are willing to become an employer in the United States. So, keep this difference in mind.

Moreover, EIN numbers are required to open Limited Liability Companies, corporations, sole proprietorship businesses, trusts, NGOs, partnership businesses and even governmental agencies. So, those who are concerned about how to open a business in USA without an ITIN number, should know that they can open all types of businesses in the United States witn EIN numbers.

If you need any help in opening a business in USA without an ITIN number, please call us at 407-344-1012, or email us at info@freedomtaxfl.com .

Type of Business Foreign Investors Opt For in the United States of America – Limited Liability Company

When it to comes to forming a business in United States, a lot of questions pop-up in mind such as which type of business to consider? How much capital would be required to start a business? How to open a business in USA without an ITIN number? And the list continues.

Considering the type of organization to form in the United States, we have seen most of the people consider starting a Limited Liability Company in the United States. You may be wondering that it is considerable to form a sole proprietorship business. Though, a sole proprietorship business is a good choice, but a Limited Liability Company is better.

Understand about Limited Liability Company

Prior to going in the details, you must first clearly understand what an LLC is. A Limited Liability Company is a type of organization that follows a pass through taxation. This form of business has profits and losses depending on the personal income of taxes. If you are trying to explore the answer to the query, how to open a business in USA without an ITIN number, you should also know that most of the people consider forming Limited Liability Company because of lucrative advantages.

Benefits of a Limited Liability Company

As there are various profitable benefits, as a result business owners consider forming an LLC in the United States. Check them out below.

  • Firstly, an LLC is not considered as a separate entity for tax purposes by the Internal Revenue Service (IRS). This actually means that the IRS will not tax the LLC directly, initially. Though, the decision remains to the members on how they wish to get taxed.
  • Nevertheless, documents and legalities make the procedure very complex and complicated. Unlike C-corporations and S-corporations, a Limited Liability Company has less paperwork to start a business in the United States.
  • One of the most attractive features of an LLC is its limited liability. The members in an LLC are not personally liable to pay for the debts in case of judgments. This meaningful shield is neither provided in sole proprietorship nor partnership business.
  • The state level compliance is less as compared to other business structures in the United States.

Understanding the Insight – You Do Not Need an ITIN Number to Open a Business in USA

Those who are asking how to open a business in USA without an ITIN number, they are also a part of the common misconception that most of the people have; they think that foreign investors must have an ITIN number to establish a business but it is not true. Apart from this fact, some of them also think that they require either an SSN or an ITIN to start a business. One just requires an EIN number to start a business in the United States.

Furthermore, some of the people who already know that they require an EIN number; they believe that they need to have an ITIN or an SSN as a pre-requisite which is again not true. You need to have none, EIN number can be obtained with the help of a qualified consultant by signing form SS-4. Though, your consultant needs to be credible and must have an ITIN or an SSN number, to prove to the IRS authority. The process may take long as it quite complicated and complex due to several legalities. But it is worth the wait.

Now that you know the answer to the query, how to open a business in USA without an ITIN number, you may want to know what makes you eligible to obtain an EIN number, this leads to our next section.

Here’s What Makes You Eligible to Obtain an EIN Number

Those who have been pondering on how to open a business in USA without having an ITIN number, they may now have understood that they do neither require a SSN or an ITIN to form a business in the United States, however, they do require an EIN number to start their business.

Like everything, there is a set of requirements for people who wish to obtain an Employer Identification Number. You need to see if you meet those requirements or not. This will help you in knowing whether you qualify for it or not. So we have come up with some factors that will help you in determining the eligibility. Check them out below.

  • When your employees are compensated up to $600 or more than that
  • When you are operating a sole proprietorship business, partnership business or a corporation
  • When you are holding wages and other income taxes for the non-residents
  • When you need to file taxes for firearms, excise, alcohol, tobacco, and employment
  • When you have a tax deferred pension plan
  • When you are operating a non-profit organization, working on farmers cooperatives, estates -trusts, real estate mortgage investment conduits, and plan administrators

How to Open a Business in USA Without an ITIN Number? – The Procedure

Most of the people, be it residents or non-residents who start their business in the United States, need not obtain an SSN or ITIN number to acquire EIN number. So, they must not worry about how to open a business in USA without an ITIN number. We have already discussed about all the logics and rationale as a result, now you may be able to understand why it is so. Briefly, an ITIN is not the smart choice for forming a business in the United States and it is not acceptable either, which is why you need an EIN.

Before we move on to the procedure of how to open a business in USA without an ITIN number, you must first consider the important elements for an EIN number. Check them out below.

  • You should see the form of the business structure (S-corporation, C-corporation, or a an LLC)
  • You should see the residency status of an individual (non-resident or resident)
  • You should look into the association of attorneys for businesses
  • You should see the cofounders of the United States business

The elements discussed above will help you in gauging whether or not you require an EIN number. In order to know more about how to open a business in USA without an ITIN number, you must read on to this section very carefully.

Acquiring an EIN number is not very complex but it is just the documentation that makes the procedure time consuming. Once you have hired or are working with a seasoned consultant, you will hopefully not face any hurdles. They will ensure whether or not all your documentation has been done properly and if they meet the requirement or not. The steps below will help you in understanding how to open a business in USA without an ITIN number.

·      Step # 1: Hire a Seasoned Business Lawyer

The first and foremost step prior to forming a business in the United States is to hire a seasoned, professional, and of course a credible business consultant. A lawyer is the one who will look into all the matters on your behalf. They will be the one to represent your business as a third party designee. Choosing a business attorney is a challenge though, but you can look through their testimonials to make a smart decision.

·      Step # 2: Application Process

After choosing your professional business consultant, looking into the application process is quite essential. With the help of a lawyer, you can prepare your EIN number. Your seasoned attorney will help you in assembling all the documentation and paperwork, and prepare the application for your Employer Identification Number (EIN).

·      Step # 3: Contact the Internal Revenue Service (IRS)

Once your lawyer has prepared the application, they may need to get in touch with the Internal Revenue Service (IRS) for the foreign investors. Once they have contacted the IRS department, they will be required to either fax or post the signed form to the IRS office.

·      Step # 4: Acquiring EIN Number

Once the application sent by your lawyer is submitted and proved to be genuine by the IRS, the IRS will accept it. Later, your representative, lawyer will have to go and collect the EIN number on your behalf on the day they will be called.

Now that you know the complete procedure of how to open a business in USA without an ITIN number, you may have realized how much the role of a lawyer is essential in the entire process. This is why, you should consider hiring a lawyer or a firm who are seasoned, professional and have credibility in the market.

Also, you must keep in consideration that you hire a lawyer who either has SSN number or an ITIN number. If they do not have any, the process will not go smoothly. You will be given an EIN number because of their ITIN and SSN number. So ensure to choose lawyers wisely and smartly.

If you need any help in opening a business in USA without an ITIN number, please call us at 407-344-1012, or email us at info@freedomtaxfl.com .

Some Alternate Ways to Acquire an EIN number

The entire procedure to acquire an EIN number is mentioned above but there are some other ways through which you can acquire an EIN number. Those asking how to open a business in USA without an ITIN number now must have realized that ITIN is not essential, while an EIN is. Therefore, they should know some alternate ways to obtain the EIN number too. However, you must keep in mind that no matter what so ever way you follow; you will have to fill form SS-4 to get your EIN number. Let’s have a look at the alternate ways.

  • One of the best ways to apply for the EIN number is to apply online. You can send your application through the internet and get your EIN number by the issuer via internet. This type of application process is available to all type of entities in the US.
  • Though, applying for the EIN number via mail is an old method, but some of the people consider because the processing time is less.
  • Besides mailing and submitting online, you can also submit via fax. This is also quite traditional but is often chosen by individuals as it is one of the easiest ways.
  • Those who are confused can apply for the EIN number via telephone. International applicants who need an EIN number can call on this number, 267-941-1099 at any time and the IRS representative will help you in filling the form on telephone. However, they should call from Monday through Friday to inquire about their EIN number.

Final Word

EIN Number is necessary to form a business in the United States while lawyers are required to either have an ITIN or SSN number. We hope this blog was helpful in making you well versed about how to open a business in USA without an ITIN number. If you are still confused about the process or other details, you should take assistance from a professional consultant for hassle-free acquisition of EIN number. Good luck!

If you need any help in opening a business in USA without an ITIN number, please call us at 407-344-1012, or email us at info@freedomtaxfl.com .

 

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