By Prince
1. Choose your company structure :

Most foreign nationals, says Hartnig, choose to establish a C corporation, which can expand by offering unlimited stock and is typically more attractive to outside investors, even though its profits are taxed twice, first at the corporate level, and then as dividends to shareholders. For corporate shareholders, the advantages are usually clear: Corporate shareholders typically qualify for a lower dividend rate. And so long as the U.S. company doesn’t primarily hold real estate, the corporate parent won’t pay capital gains when it sells the U.S. affiliate. Even individual foreign owners are probably best off with a C corporation, says Hartnig, since the structure will shield them from direct I.R.S. scrutiny. “Foreign individuals are very, very hesitant to put their names on the U.S. tax rolls,” he says. 

2. Choose a state for registering your company :

The company’s business should determine where it locates. If one state dominates its market, it’s best off incorporating there – there’s no way to avoid obligations of doing business in, say, California, a famously high-cost jurisdiction, by registering in Nevada or Delaware, two famously low-burden states. On the other hand, if the business will not be concentrated in any particular state, most advisers will probably recommend Delaware incorporation, followed by Nevada. This is in part because of Delaware’s “flexible” corporate law that offers generous protections to shareholders and directors, and also due to its outsider-friendly rules. (Besides not requiring either a local physical address or bank account, Delaware makes its corporate law website available in 10 languages.) It’s also, at least in part, a matter of inertia: Tax advisers are so familiar with Delaware’s welcoming ways that many haven’t bothered to learn the requirements of more far-flung states.

3. Register your business :

The forms and other requirements for forming a business entity vary somewhat by state. Here’s how incorporation works in Delaware, which serves as a simplified model for many states:

The company principals choose a unique name. They select a registered agent that is able to receive legal documents for the company. (A company with a physical address in the state can serve as its own agent, but this is not true in other states, like California.)The company fills out a one-page certificate of incorporation that identifies the corporate name; the name and address of its registered agent; the total amount and par value of the shares the corporation is authorized to issue and the name and mailing address of the incorporator. Fees start at $89 and increase principally based on the amount of stock issued or capital raised.

4. Obtain an employer identification number :

An employer identification number is necessary not just to hire workers, but to open a bank account, pay taxes or often to get a business license. Apply for the EIN for free directly with the IRS, and avoid the many online services with government-sounding internet addresses that charge for this service. But unless the U.S. company’s principal officer (who the IRS calls the “responsible party”) has already obtained a separate Taxpayer Identification Number from the agency, it can’t apply for an EIN online – it must apply by mail or FAX, and where the form asks for the Taxpayer Identification Number, enter “foreign/none. ... eigner.asp