I just recently applied for a LLC in the USA and I am a foreign citizen. I understand I must obtain a EIN from the IRS but will first need to obtaina ITIN # in order to file a SS-4 form. My question is regarding the W7 form needed to obtain the ITIN #. In section 1, there are a few options which I am supposed to check. I have trouble selecting the correct one: 1. Non resident alien required to obtain a ITIN to claim tax treay benefit. 2. Non resident aliean filing a US tax return 3. Other Which one should I select if I am looking to obtain a EIN just so I can open a corporate bank account in the US? The nature of my business in forums. Thank you.
Well... There are a lot of restrictions actually. For example... you are NOT allowed to work for your company. Not even managing it. It really depends what your current status is. If you are a student on a F-1 visa - forget it you may get deported.
Im currently not in the USA nor do I plan to be. I will be operating this business from my home country. Let's skip the status and restrictions part.. that is something I already know and have taken care off. The question I am concerned with is the filling of the W7 form. Thanks
Well, I have a INC in the US and operating out of the US. If you do not have any employees in the US, you do not need the TIN or EIN number. I did get it for the sake of opening a corporate bank account in the US and no banks would entertain me as I am trying to apply remotely and not on US soil. It is going to be difficult to find a bank which would allow you to open a bank account. You really need to fly into the US, bring your documentations before opening one. At least that is my experience.
Can you help me with the first part of the W7 form? I am assuming you had to file this to obtain a ITIN number and then a EIN number. I am in the same situation as you with no employees. What did you put in the first section of the W7form? Thanks Also, you mentioned you do not need a TIN or EIN number if I do not have any employees in the US. Is this not required to file your taxes in the state you incorporated? Can you use your own countries bank account to conduct business with your US corporation?
I think it is the 2nd one that fits your situation. Or select 3, and indicate that you are seeking to obtain an EIN for a foriegn owned LLC. Basically, if you form an LLC in the US, you will be required to file a tax return for the LLC, so in that sense #2 applies. What do you mean, you are not allowed to work for your company? Of couse you are. I am not aware of any legal restrictions that would prevent the original poster from working for their LLC. Do you have a reference for that claim, otherwise I will assume you are making it up.
Hi browntwn, Since I am trying to obtain a EIN for future tax return purposes, is it still okay for me to check number 2 without attaching any tax papers? Also, do you know if you can use your home counties bank account for a corporation or LLC in the US? Thanks
I am US based, so I have no specific experience with this particular situation regarding the W-7. I do have 2 LLC's and have formed many corporations for others. One of my LLC's has no EIN number, and just operates off my SSN. The other LLC, has it's own EIN. I did not have to complete the W-7. I think I just completed a SS-4. As far as bank account, I am not aware of anything that would require you to maintain a US bank account versus a foriegn one. I would not hesitate to open a foriegn bank account for my LLC if I thought it was needed. I do not think any additional documentation would be required for selecting #2, but see what the form instructions say. Many of these tax forms have nice detailed instructions. *** I am not sure what state you are applying for the LLC in. Mine are all California. The rules for LLC's vary from state to state. Where are you setting yours up?
Hi Browns, I am setting up mine in Delaware. I need to file the W7 form to obtain a INIT number in order to get my EIN number. Since I am a foreign citizen, the INIT is the only option. Thanks
I used Bizfilings for my Delaware incorporation and got them to submit the TIN form anyways, I am not sure what the specifics are since it was about 10 years ago.
Certain visa statuses in united states (student F1, work permit H1-b) prohibit you from working for ANY company (including ones your own). Since this is not the case of the OP, I will not go in details on that.
You do not need an ITIN in order to be issued an EIN (I got my ITIN 6 months after my EIN), BUT it is very advisable to retrieve the ITIN for yourself. You will find very difficult to have anything done for your company without background and credit check for the owner(s) - yes, it's ridiculous how the US system in general doesn't respect the separation of juridical and physical persons, unlike many other countries like mine (Brazil). In fact there are _some_ possibilities for a non-citizen to get a full SSN (without work permit). Quoting the Social Security Administration:
Although as I stated in my last post you need not an ITIN in order to be issued an EIN, let's then give some non-binding business advice that you should check with the incorporation firm and their lawyer (as giving out legal advice in the US without being a lawyer is also ridiculously illegal): a one-member LLC is disregarded for business federal taxes as a business entity. All the earnings of the LLC have to be declared in your personal income tax, instead. By personal income tax, it depends whether your country has setup a non-double taxation agreement with the US. If they have one, then you have to follow that agreement (it changes from agreement to agreement, but basically depending on the nature of the the work it may be taxed on the source or on the territory, so it may be set to pay the US taxes or pay your home country taxes). If they have no tax agreement, then you have to pay the taxes in both places. BUT, if your company is 100% virtual - you don't have physical presence in the US other than your registered agent, you don't have employees or real estate assets under the company name, all your business is done through your home on the internet; then you have not an "income generator fact" inside the US that is tax-qualifying, so you need not to pay federal income tax in the US at all, but only at your home country (if this is your case, check with the incorporation firm/lawyer, because then you should fill the SS4 differently, as a disregarded entity). Most of the states (but not all) will also only charge state sales/income tax if the sale was physically done in the state (if you operate your business from that state effectively). For the ITIN you need to checkmark #3 and state the exact reason you need it: because you are owner/member of a US based LLC incorporated in the state of XXXXXX and need it for tax filing purposes. As for the home country bank: depends on your home country legislation about accounts in foreign currency. But in a general sense wouldn't be recommended, because if you are sued in the US for any reason, the "corporate veil" would surely be pierced by a judge and would let you in real trouble.
I got my Itin 7 years ago so I don't remember the whole process, but I got help and filled all the papers in the local U.S. embassy. So go in the U.S. embassy in your country to receive help, the embassy should be have also a list of accountants and lawyers in your country specialized in the U.S. law and tax. Running an U.S. company from another country is not easy like online incorporation company let you believe, you need to find a good accountant or you risk to get in trouble with the taxation system. Remember you need to pay personal and coporation tax in the U.S. also if your are in a foreign country. For the bank account you can check this bank pnb.com I used it with my U.S. company and was the best for a foreign citizen.