How to Set Up a Business in the US – A Practical Checklist
Starting a business in the U.S. is an exciting venture that can unlock countless opportunities, especially for entrepreneurs from around the globe. However, it can also feel overwhelming if you’re unfamiliar with the steps involved. Here’s a practical checklist to guide you through the process and help you navigate the key steps effectively.
But before that i will you my experience with my C-Corp back in 2022. Let’s go.
How i formed my C-Corp
When I started the process of forming my U.S. company in 2022, I thought I had a pretty good handle on things. I’d done my homework and knew it was common for businesses to incorporate in Delaware—even if they operated in other states. What I didn’t realize was just how different and confusing the system could be compared to Europe.
In Scandinavia, setting up a company is lightning fast. You register online, and within a few days (sometimes hours), you’re up and running. In the U.S., it’s more like a series of hurdles. After incorporating in Delaware, I learned that because I planned to operate in California, I’d need to register there as a foreign (out-of-state) entity. So, even though Delaware is the business hub, you’re still dealing with multiple states, multiple systems, and, of course, multiple fees.
I used Firstbase to handle my incorporation. Honestly, it seemed like a solid choice at the time. Their website made everything look sleek and easy, and as someone new to the U.S. business scene, I thought it would simplify things. The reality? It was… okay. The process worked, but it felt disorganized, and the service wasn’t exactly stellar. There were delays and miscommunications, and I often found myself wondering if I’d made the right choice. Looking back, it got the job done, but not without a lot of head-scratching on my end.
It also didn’t help that after incorporation, I had to wait a couple of weeks before I had all the necessary documents to move forward. No opening a bank account, no applying for an EIN—it all felt like a hurry-up-and-wait situation. When I finally got my paperwork, I started with Mercury Bank, which was convenient for foreigners. But transitioning to Chase later on felt like a grown-up move, with better perks and the comfort of walking into a branch if needed.
The whole experience taught me that starting a business in the U.S. isn’t impossible—it’s just a lot more layered than in Europe. For anyone looking to incorporate, take your time to research your options, and if you’re going to use a service, make sure they have strong support. Above all, expect things to move a bit slower than you’re used to, but trust me, it’s worth it once everything is in place. Back to the checklist.
1. Decide on Your Business Structure
Your business structure determines your legal and tax obligations. The most common structures for U.S.-based businesses are:
- Sole Proprietorship: Simple, but the owner is personally liable.
- Limited Liability Company (LLC): Offers liability protection and is relatively straightforward to set up.
- Corporation: Ideal for businesses planning to raise significant capital or work with investors.
- Partnership: Suitable for businesses with two or more owners.
💡 Tip for foreigners: Most international entrepreneurs choose an LLC or a Corporation for its simplicity and liability protection.
2. Choose a State for Incorporation
The U.S. allows you to incorporate in any state, regardless of where you plan to operate. Popular states include:
- Delaware: Known for its business-friendly laws and efficiency.
- Wyoming: Low taxes and no state income tax.
- California or New York: Often chosen by businesses operating locally in these regions.
💡 Pro Tip: Delaware is often the go-to choice for international entrepreneurs because of its robust legal framework for businesses.
3. Register Your Business
To register your business, you’ll need to:
- Choose a unique name.
- File incorporation documents with the state.
- Pay any associated filing fees.
💡 Tools to Use: Services like Stripe Atlas or Doola, Firstbase or Clerky can help simplify the process for non-U.S. residents.
4. Apply for an EIN (Employer Identification Number)
An EIN is a unique number issued by the IRS for tax purposes. Even if you don’t plan to hire employees, you’ll need an EIN to open a U.S. business bank account.
💡 How to Apply: You can apply for free on the IRS website.
5. Open a U.S. Business Bank Account
A business bank account is essential for managing your finances and building trust with customers and suppliers.
When I first moved to the U.S., I used Mercury Bank. It’s an excellent choice for foreigners because it allows you to set up an account online, even if you’re not physically in the U.S. However, as my business grew, I transitioned to Chase Bank for its broader range of benefits, such as better rewards, credit options, and physical branch access.
Other great options include:
- Relay: Great for managing multiple accounts and expense tracking.
- Bluevine: Offers competitive interest rates on account balances.
💡 Pro Tip: Start with Mercury or Relay for convenience, then upgrade to a traditional bank like Chase or Bank of America as your needs evolve.
6. Get the Necessary Licenses and Permits
Depending on your industry, you might need federal, state, or local licenses. For example:
- Food businesses often require health department permits.
- Online businesses may need a sales tax license.
💡 Check with: Your state’s Secretary of State website or a business lawyer for specific requirements.
7. Set Up a Reliable Payment System
To accept payments, you’ll need a payment processor. Popular options include:
- Stripe: Ideal for online businesses.
- PayPal: Widely recognized and trusted.
- Square: Excellent for physical retail and small businesses.
8. Protect Your Business with Insurance
Business insurance can shield you from risks like lawsuits, property damage, and employee injuries. Common types include:
- General liability insurance.
- Professional liability insurance.
- Workers’ compensation insurance.
9. Establish a U.S. Business Address
Even if you’re not physically in the U.S., you’ll need a business address for legal correspondence.
- Use a virtual office service like Opus or Regus to establish a U.S. address.
- Alternatively, services like Earth Class Mail can provide a mailing address and scan your mail for online viewing.
10. Stay Compliant with U.S. Laws
Compliance involves:
- Filing annual reports and taxes.
- Renewing licenses.
- Maintaining proper business records.
💡 Tip: Consider hiring a U.S.-based accountant or using accounting software like QuickBooks or Xero to stay organized.
Final Thoughts
Setting up a business in the U.S. is a rewarding journey, but it requires attention to detail and a clear understanding of the legal and financial landscape. Starting with tools like Mercury for banking and Stripe for payments can make the process smoother.
Once your business is up and running, focus on growth and networking. The U.S. offers incredible resources for entrepreneurs, so make the most of them!
What’s your experience starting a business in the U.S.? Let us know in the comments!
