Incorporating in the USA for foreigners

For a US company owned from abroad, the choice between business entities affects who pays taxes. Liability protection and tax treatment are separate questions. The comparison worth making is with the LLC, which is less a rival form of company than a different tax default: under the IRS classification rules, a single-member LLC is disregarded and a multi-member LLC is a partnership unless Form 8832 is filed, so the profit is reported by the members rather than by the company. S status would put that treatment inside the corporate form, but it is closed to any corporation with a nonresident alien shareholder. A foreign-owned US corporation is therefore a C corporation by operation of the rules, not by election.

Articles of incorporation, or a certificate of incorporation, record formation details rather than ultimate ownership: Delaware asks for the name, the registered agent, the shares and the incorporator, Virginia for less. The identity questions come from the other direction. An EIN application has to name a responsible party, a person rather than an entity, who owns or controls the business and manages its funds, and a bank opening the account has to identify each individual holding 25 percent or more of the company and one person who controls it. Where a company holds shares, those questions reach the people behind it. The ownership chain drives the file, not the number of states.

The registered agent entry is state specific. The agent is appointed to receive legal documents. Delaware, Virginia and Texas each decide separately who may hold the role; Virginia is the narrowest of the three, reaching only a resident who is an officer or director of the corporation or a member of the Virginia State Bar, or an entity authorized to transact business there, while Texas does not treat the appointment as made until the agent has consented in writing. Two things are misread here. The appointment is continuous rather than a formality at filing, and the EIN sits outside this list altogether, because it is federal and is applied for on its own.

The rates beside this text are not what a new corporation meets first. A domestic corporation files a federal income tax return whether or not it has taxable income, so a company that never trades still files. State obligations follow their own logic: Texas franchise tax is a privilege tax on the entity rather than on profit, and an entity under the no-tax-due revenue threshold still files a Public Information Report or an Ownership Report. The filing owners abroad miss most often is Form 5472, attached to the return once one foreign person owns, directly or indirectly, at least 25% of the corporation; the IRS instructions set the penalty for not filing at USD 25,000.