Starting a business in the United States as a non-resident is more accessible than ever, thanks to digital tools, remote-friendly platforms, and services like Stripe Atlas. However, the U.S. tax system remains one of the most complex in the world.
For foreign founders, that complexity begins the moment you form your company and grows with each milestone, from hiring and invoicing to selling your product.
This guide walks through the full tax and compliance journey of a non-resident founder building a U.S. startup, from the day you file formation paperwork to your first customer sale. Along the way, we highlight key IRS forms, deadlines, and the role Bookmate plays in keeping your business compliant.
Step 1: Forming Your U.S. Business Entity
Most non-resident founders choose between a U.S. LLC or a Delaware C-Corp. Each has different tax obligations.
- LLC (Limited Liability Company): Often taxed as a pass-through entity. If foreign-owned, it must file Form 5472 and a pro forma 1120 annually.
- C-Corp (C Corporation): Treated as a separate tax entity. Must file Form 1120 and pay corporate tax. Easier for raising capital.
Bookmate helps founders decide the right entity type based on goals, tax residency, and long-term plans. We ensure the formation is not just done legally, but done smartly.
Step 2: Getting Your EIN and Bank Account
Once your business is formed, the next step is to obtain an Employer Identification Number (EIN) from the IRS. This number is required to open a U.S. business bank account, sign up for payment processors, and file taxes.
- Form SS-4 is submitted to the IRS to get your EIN.
- Many founders try to do this manually and run into delays or rejections. Bookmate handles EIN applications swiftly and correctly.
Step 3: Registering for U.S. Taxes
Foreign founders may need to file various federal and sometimes state-level tax documents. This depends on the type of entity, the nature of income, and where your company operates.
- LLCs with foreign ownership must file Form 5472 and a pro forma 1120, even with no income.
- C-Corps must file Form 1120 regardless of revenue.
- If your company has U.S.-source income, you may also need to file and pay federal income taxes.
Bookmate ensures all necessary forms are filed on time and accurately, helping founders avoid common penalties.
Step 4: Selling Your First Product or Service
Once your startup begins selling, whether it's SaaS, ecommerce, or services, you have new tax triggers.
- U.S.-source income becomes reportable and possibly taxable, depending on where your customers are located.
- Sales tax may apply if you sell physical goods. Even digital products may be taxable in certain states.
- Payment processors like Stripe or PayPal may withhold a portion of income if tax documents are not on file.
Bookmate provides monthly accounting and tax support to monitor revenue and ensure proper reporting from day one.
Step 5: Hiring Employees or Contractors
Hiring introduces additional tax and reporting responsibilities, especially for U.S.-based employees.
- For U.S. employees: You must register for payroll taxes, file W-2 forms, and pay employment taxes.
- For foreign contractors: You may need Form W-8BEN or W-8BEN-E for compliance.
Bookmate helps structure payments and manage compliance for both domestic and international teams.
Step 6: End-of-Year Filing and Reporting
Every U.S. company must file annual federal returns. Even if you have no income, the IRS requires certain forms.
- LLCs with foreign owners: Form 5472 and pro forma 1120
- C-Corps: Form 1120, regardless of profit
- All foreign-owned businesses: May need to file Form 1042 if withholding applies
Filing the wrong form or missing a deadline can result in fines of $25,000 or more. Bookmate’s flat-rate tax service handles year-end filings with no surprise fees.
Step 7: Handling Founder Taxes Personally
Many non-resident founders are surprised to learn they may have to file personal U.S. tax returns.
- If you take a salary from your U.S. company, you may need to file Form 1040-NR.
- If your LLC has U.S.-source income and you are the owner, you may also need to report that income personally.
Bookmate provides guidance on when personal filings are required and helps you stay compliant in both the U.S. and your home country.
Step 8: Preparing for Growth and Investment
If you plan to raise funds, you will need clean financials and up-to-date compliance.
- Investors require C-Corp status, usually in Delaware
- Your cap table and equity grants must be properly documented
- You may need audited financials or reviewed statements for due diligence
Bookmate’s accounting plans ensure your books are clean, your cap table is clear, and your taxes are in order before you approach investors.
Why Tax Planning Matters from Day One
Foreign founders often assume taxes only become relevant once they make money. In reality, U.S. tax obligations begin the moment you form your entity. Missing the first year’s forms, even with no revenue, can damage your business.
Bookmate takes the stress and uncertainty out of U.S. taxes. We specialize in working with global founders who are building American companies. From choosing the right entity to filing your first 1120, 5471, or 1040-NR, we ensure your startup stays compliant at every stage.
Talk to Bookmate Today
If you're a non-resident founder thinking about starting or growing a U.S. startup, don't let taxes slow you down. Book a free consultation with Bookmate and get personalized guidance for your journey.
And remember, every tax situation is unique. For reliable support and peace of mind, visit trybookmate.com.
