How To Create And Run A US Company Completely Digitally (Online)

usa company online

Opening a new company in the US doesn’t have to be stressful. You can also do it entirely online. You don’t need to travel there and visit local administrators or get an office. The United States has luckily made this process easy and time-efficient. 

Steps to set up a new business in the United States

1. Meet the official requirements 

There are a few hoops you’ll need to jump through. Every company needs a Registered Agent, a business address, and an EIN. If you hire an agency, you won’t need to lift a finger. They’ll cut the red tape for you. 

2. Set up the company 

Choose a company name, fill out all the required documents, pay the starting capital, and employ the necessary people. You can do it alone, or you can hire a company to do it for you. 

3. Open a bank account 

To run a business in the United States, you’ll have to open a local bank account. You can use one of the brick-and-mortar banks or open a digital bank account remotely.

Who can start a company in the United States? 

The rules are the same for everybody. Meaning that the procedure is identical for an American citizen as they are for a foreigner. 

You don’t need to have a green card to start a business in the US or buy an American company, and you’ll be listed as the director of the company or the CEO. But to work in the United States, you’ll indeed need a work permit, which means that you’ll also need a green card. 

So, to recap, you can own a business and reap the benefits in terms of profits, but to actually work here, you’ll need a green card. 

Which state should I choose? 

This is a dilemma that’s easy to answer. If most of your business will be conducted in a particular state, open a company there. Otherwise, if you will be doing business in multiple states or none at all, choose Delaware or Nevada for your incorporation. 

If you scroll down on company websites, you will see that a great deal of them are from Delaware. That’s not a coincidence, of course. In fact, around half of the S&P 500 is incorporated in Delaware! 

Delaware has corporation-friendly laws with ample protections to shareholders and directors. Another huge benefit is that you don’t have to have a local bank account or physical address. For out-of-state (or country) entrepreneurs, that’s a big deal. 

Also, if the business doesn’t lead its operations in Delaware, the state’s corporate income tax may not apply. Instead of paying that income tax, those Delaware corporations pay a franchise tax (from $175 per year). 

You can find all the information about forming a company in Delaware in 10 languages. I find that pretty unique, especially in the US. 

How long does it take to open a company in the United States? 

This varies widely from state to state, but for instance, in Delaware, you can get up and running in an hour. For $1,000. In two hours, it will cost you $500, the same day from $100-$200, and the next day $50-$100. See their full list of fees

What type of company should I open? 

There are three types of companies that people from outside of the US are creating: 

  • Limited partnership (LP) 
  • Limited liability company (LLC)
  • Limited liability company (LLC)

When two or more partners go into business together, they can form a limited partnership. One of them is a general partner, and they effectively run the business. Other partners are then limited partners that are only liable up to the amount of their investment. 

To create an LLC means a lot less paperwork and a more straightforward process than creating a corporation. The main drawback is that LLC members have to pay a self-employment tax, including a 12.4% tax for Social Security and a 2.9% tax for Medicare. 

C corporations limit the personal liability of the directors and shareholders, but taxing of profits from the business is at both corporate and personal levels, creating a double taxation situation. 

Ultimately, it’s up to you (and your partners) to decide what kind of company you want to form in the US. Think about your and your country’s requirements, as well as tax implications. 

What do I need to do for ongoing state compliance? 

Your state requires an annual report and other ongoing compliance. You can manage this yourself, but missing these deadlines can result in fines or the loss of your liability protection. 

Official Requirements 

Company name 

Every company or LLC has to have a unique name that includes the phrase “corporation,” “limited,” “incorporated,” or “company” – for C Corp, and “limited liability company,” LLC, or L.L.C., for LLCs. 

Registered Agent 

A Registered Agent accepts legal documents on behalf of your business. Most states, including Delaware, require the company to have a Registered Agent with a physical address in that state. If the business has a physical location in the state, it can act as its RA. 

Business Address 

Some states require you to have a physical or mailing address in the state where you’re opening a company. It’s also necessary to open a US bank account. Delaware, for instance, doesn’t have that requirement as you have to have a Registered Agent in the state anyway.

Employer Identification Number (EIN) 

Simply put, EIN is a tax ID for your LLC. Neither a US address, an Individual Tax Identification Number (ITIN), or Social Security Number (SSN) is needed to apply for the EIN. You can apply for it online, by fax, or by mail. 

LLC Operating Agreement 

Some states also require an LLC Operating Agreement. This legal document describes the ownership and member duties of an LLC. 

Bank account 

The last requirement is to get a US bank account. You can open one by traveling to the US to a physical branch or simply open a digital account from the comfort of your home (outside the US). 

Digital company incorporation 

We picked the two of the best and arguably most popular online incorporation companies out there – ZenBusiness and Incfile. Between them, they’ve helped open hundreds of thousands of LLCs, corporations, and nonprofits. 

Have a look at what their packages look like, visit their websites, and choose the one that suits you the most. We included Delaware prices below, as we’re mainly concentrating on that state in this guide. 

ZenBusiness 

zenbusiness
  • It starts at $49/y 
  • Fast and simple 
  • Completely online
  • LLC and C Corp
  • Worry-Free Compliance service 

ZenBusiness covers all 50 states and makes it easy to form an LLC or a corporation. They offer three formation plans with slight differences depending on the company type: 

  • Starter ($49/y) 
    • Prepare and File LLC 
    • Standard Filing Speed
    • Annual Report Service
    • Operating Agreement Template
    • 100% Accuracy Guarantee 
  • Pro ($199/y) 
    • Starter plan +
    • Worry-Free Compliance
    • Banking Resolution Template
    • Employer ID Number (EIN) 
  • Premium ($299/y) 
    • Pro plan +
    • Business Website 
    • Business Domain Name 
    • Domain Name Privacy
    • Business Email Address 

The above prices don’t include state fees that are, in the case of Delaware, $89. The Starter plan takes approximately 2-3 weeks to fulfill; the Pro plan takes 5-8 days, and the Premium – 2-5 days. The filing times may also be delayed due to state processing slow down or closures. 

Incfile 

  • It starts from $0 (only pay the state fees) 
  • LLC, S Corp, C Corp, Nonprofit 
  • Completely online 
  • Transparent fees 

Incfile has helped launch over 500,000 businesses since 2004. They have a very organized website that guides you through business types and Incfile incorporation plans. Their three plans have a one-time payment and include (prices for Delaware): 

  • Silver ($110) 
    • Preparing & Filing the Articles of Organization
    • Unlimited Name Searches 
    • FREE Registered Agent Service for a year 
  • Gold ($259) 
    • Silver package + 
    • EIN Business Tax Number 
    • IRS Form 2553 
    • Operating Agreement 
    • Banking Resolution 
    • Lifetime Company Alerts
    • Online Access Dashboard
    • Unlimited Phone & Email Support 
    • Business Banking Account 
    • Business Tax Consultation 
  • Platinum ($409) 
    • Gold package + 
    • Expedited Filing 
    • Domain Name + Business Email

The Silver package is, in fact, free as it only includes a $110 state fee that goes straight to Delaware. 

Also, as you can see, all three plans include a free Registered Agent service for an entire year. Afterward, it will cost you $119 a year. The service consists of the following: 

  • Online dashboard 
  • Handling all of your documents 
  • Automatic mail forwarding 
  • SMS and email notifications 

All applications are processed the following business day and sent to state approval. For an additional $50, you can expedite the (Delaware) state filing time. And it’s even free on the Platinum plan. Otherwise, you’re looking at the standard three weeks. 

Digital banking 

Obtaining a US bank account used to be the most challenging step in this whole incorporating process. Luckily, you can now open a local US account from anywhere in the world. We’re having a closer look at some well-known and respectable digital banks with millions of satisfied customers worldwide. 

Mercury 

mercury bank
  • Built for startups 
  • No monthly fees 
  • No minimum deposits 
  • Free Allpoint ATM withdrawals 
  • Company analytics 
  • FDIC-insured 

Mercury is a new kind of digital bank platform aimed at providing business accounts to tech companies and growing start-ups that get a bank account with no monthly fees but with API access, virtual cards, team management, and more. 

E-commerce businesses can connect to any payment processor like PayPal, Shopify, Amazon, or Stripe. 

To open a Mercury bank account, your company has to be formed and registered in the US. Still, you, the founder, can be located anywhere in the world. That’s what we need. 

The great thing is that Mercury doesn’t charge fees for anything but specific advanced features such as mass payments on API and treasury management. Everything else is free: no account minimums, overdraft fees, monthly fees, account opening fees, wire fees.

Mercury is geared towards tech companies, so it might not be the best fit for some other businesses, especially ones that frequently deal with physical cash. 

If there are no fees, how does Mercury make money then? Mercury (and most other digital banks) make money when your debit cards are used. When you make a transaction, a small interchange fee is applied. 

The best thing is that you do not pay it, but it’s paid by merchants that accept the cards. Read our Mercury review

Revolut 

revolut
  • For companies and sole traders 
  • It starts from $0 
  • Multi-currency accounts 
  • Free international and local payments 
  • Spend in over 150 currencies at the interbank exchange rate 
  • Issue cards to employees 
  • Accept payments on your website 
  • Access on the web or via the app 
  • Loans and overdrafts 
  • Integrates with accounting tools 

Revolut Business was launched in 2017 in a bid to slash banking expenses for companies, sole traders, and freelancers. With Revolut, businesses can hold accounts in 30+ currencies, enabling them to seamlessly send and receive international payments. 

You can also create an unlimited number of accounts for each team member, such as each office or client. Setting spending limits and controlling payments and transfers made by your team members is a breeze. Revolut is proud to have more than 500,000 businesses with their business account. 

Not only can you have multiple Revolut Business accounts, but you can merge them under one login as well while still keeping your businesses separate. 

Read our Revolut Business review

Wise 

wise
  • For companies and freelancers 
  • No monthly fees 
  • Multi-currency account 
  • Cheap transfers 
  • Ability to invoice customers 
  • Spend anywhere with no hidden fees
  • Xero integration 
  • Business Mastercard 
  • Receive and hold 55+ currencies 

Since its launch in 2011, Transferwise, now known as Wise, has become a global favorite among transfer services, with over 10 million transfers completed to 80+ different countries. 

Their Business account was made with the global market in mind, allowing invoices and wages to be paid in tens of currencies with real exchange rates. You get your own UK, Eurozone, Australian, New Zealand, and US bank details for a small, one-time setup fee – without a local address. 

Sending money with Wise or making international payments is straightforward and similar to other financial institutions that do the same service. You need to have some basic information that you’ll have to share with Wise to transfer the money successfully. 

Wise business cards are customizable so that you can put a spending limit and turn on or off contactless, online, and in-store payments for each individual business card. That way, you can control your employee spending. 

The Wise Business app scores highly with users. Its clean, bright interface makes it easy for users to review all their transfers and recur a payment with a click. It is Apple Pay, and Google Pay enabled, and you can now add card details via your camera instead of entering them manually. 

If you don’t already have an invoicing or accounting tool, Wise lets you make one-off payments, recurring payments, and even mass payouts with excellent rates with their batch payments tool to create and send up to 1,000 payments with just one transfer. 

If you have employees or freelancers at home or abroad, it’s easy to send them domestic and international payments. And the best thing is that they’ll get paid in their local currency without recipient fees. 

The recipient doesn’t need a Wise account to get their money. It goes right to their local bank account. And all you need is the recipient’s bank account details or email address. 

Read our Wise for business review

Pros and Cons of running an American company

Pros 

  • Access to new markets 
  • Fees 
  • Taxes 
  • Protection of intellectual property

Creating a company in the US is undoubtedly exciting and can lead to many more business opportunities and ventures. You have a capitalist market of 300+ million people in front of you. 

And if you play your cards right, this could lead your new company or subsidiary to whole new heights. 

As you could already see, opening a company in the United States, and Delaware in particular does not cost a lot of money. Even when you count all the state fees required to open a company, you still won’t spend much money. 

The country and even individual states provide tax benefits and incentives not only to US businesses but also to foreign-owned businesses. You can even get tax credits and lower real estate taxes for foreign investors. 

If you’re looking to protect your intellectual property rights, the US and the patent office strictly enforce the law and give you infringement protection. 

Cons 

  • Annual cost for Registered Agent 
  • Exchange rates could eliminate profits 
  • Competitive market 
  • Visa 

So, what are the drawbacks then? Although the fees associated with creating a US company are generally low, there are some costs that you’ll have to endure year after year. One of those is the Registered Agent. You’ll end up paying $100+ each year to maintain this service. 

If you are sending profits to your home country, you could be losing money on exchange rates. Although one of the digital banks on our list – Wise, offers really favorable exchange rates for many currencies, it would still be wise to turn on FX rates notifications in the app when the best rate is found. 

Those that want to do business on American soil will find that there’s competition around every corner. That’s good for consumers, but it might be overwhelming for a startup. 

And the last one – a visa or a green card. You see, you can be the owner of the business no problem, but if you want to work for the company in the US, you’ll need to get a work visa. 

The bottom line 

We hope we showed you that creating and running a business in the US doesn’t have to be (too) complicated. Get started with any of the companies in our guide that offer incorporation services and get a digital bank account, and you’re on your way to making money with your new company. 

Be sure to check out our other guides on opening a digital company in countries like Singapore or Portugal if you’re open to more possibilities. You can also find reviews of the best digital banks in the US and around the world.