Starting a new business is never easy, and immigrants face unique challenges that can make the process even more difficult. However, it can be done, and the sheer number of immigrant-owned businesses is a testimonial.
If you are an immigrant seeking to launch your own business, these eight tips can help you get started.
1. Consider Forming an LLC or C-corporation
One of the first steps in the process of starting a new business is to choose a company structure. As The Houston Chronicle explains, LLCs and C-corporations can be operated from outside the United States and do not have any residency or citizenship requirements, making these structures an ideal choice for many immigrants.
Both structures provide limited liability protection. C-corporations also benefit from perpetual existence, meaning that if the owner dies or goes bankrupt, the corporation can continue to exist. However, because owners must pay a corporate-level tax and then also pay income tax on dividend earnings with a C-corporation, the LLC structure has tax benefits.
2. Register Your Business in a State With Immigrant-Friendly Rules
Per Metro, states such as New York, Delaware, Montana, California, Nevada, Wyoming and South Dakota are popular choices for immigrant-owned businesses because of their favorable policies regarding foreign-owned businesses. Other factors to consider include taxes and corporate privacy. If there isn’t a compelling operational reason to locate your business in a specific state, choose the state that offers the most benefits for entrepreneurs.
3. Obtain an Individual Taxpayer Identification Number
All businesses must have a taxpayer number. Because immigrants do not have Social Security numbers, they must apply for an ITIN by completing form W-7. You also need an Employer Identification Number, which you can apply for online.
4. Choose the Right Visa
You don’t have to have to be a citizen or have a visa or a green card to start a business in the United States, but you need one if you intend to work in the United States or secure financing for your business. There are many types of visas to choose from. Three of the most popular for entrepreneurs are the EB-1, E-2 and E-1. The EB-1 is the most beneficial because it allows holders to live and work in the U.S. indefinitely; however, Path2USA explains it is also the most difficult to obtain.
5. Secure Your Funding in Advance
Most start-up businesses require a substantial investment. Investigate your financing options before you get started. You don’t want to put a lot of your own money into the business, only to find out you can’t get the financing you need to be successful.
Small Business Administration loans are open to naturalized citizens, lawful permanent residents, lawful non-permanent residents and refugees or asylees. Many immigrants have difficulty qualifying for financing through traditional brick-and-mortar banks, so you may want to consider online lenders.
6. Create a Winning Website
You’ll need a strong web presence to help market your business and consistently bring in customers. If you aren’t savvy in web design and marketing, not to worry. DigitalWires is a full-service website design and web hosting digital marketing company.
7. Familiarize Yourself with Payroll
Payroll is a tricky area for all business owners. To that end, it’s important to have a clear understanding of how to manage your payroll. In time, you may be able to outsource this task to a bookkeeper or an accountant, but while it’s in house, it’s important to streamline this process yourself. To ensure timely payments tap into tools for payroll that include tax calculations, automatic deposit, timesheet computations and time tracking. This will make for one less headache as a new business owner.
8. Stay in Touch With Family
Being far away from friends and family back home can be an isolating experience. It can be helpful to occasionally bring your family to the U.S. for a visit or to go back to your home country to see friends and family. To keep things affordable, make some price comparisons through online services. If your loved ones are in Manila, for example, CheapOAir allows you to price various flights. If traveling isn’t an option but you want to send a balikbayan box, you can similarly compare shipping services.
Along those lines, many people open businesses in the U.S. with the intention of financially supporting loved ones in their home country. If you need to send money to family overseas, consider using an online transfer service. Explore rates and options, since they vary in accordance with the service, amount being sent, destination, and so forth.
If you can’t make the trip, you can also stay in touch by using technology, such as video calls, text messages and social media — all of which are free options.
Starting a business as an immigrant comes with unique challenges. However, the benefits that come with owning your own business can make it worth overcoming the obstacles.