5 Things to Do Before You Start a Business Abroad as a US Resident

5 Things to Do Before You Start a Business Abroad.

Only few things can be compared to how excited you can be when you launch a new startup from any part of the planet. Most especially if you just joined a new industry.

This content isn’t just important for individuals who wish to start a business within U.S but others who wish to expand or start a new business outside the U.S states as a citizen of the United States of America.

Venturing into any new field requires that you get familiar and conversant to viable information surrounding your business model. Just like how who want to go into a new business must take his time to study the market as an entrepreneur, you also need to study how to run an international/abroad business. This doesn’t matter if you are already a blockbuster in that business field in the U.S, it becomes a new thing entirely if you want to start up same business in other countries outside the United States.

As a guide to starting a business abroad as a U.S citizen, we shall be looking at on this page some top things to do before you start a business abroad as a U.S citizen.

Top 5 Things to Do Before You Start a Business Abroad as a US Resident

Seek for Advice from an Experience Tax Professional

One of the first thing to look out for is to seek consultation from a registered financial expert in tax matters and reporting for ex-patriate. Basically, expatriates are popularly referred to as people living outside their home country.

This councilor will aid your processes by enlightening you on all there is to know about the working abroad as well as filling other necessary or required tax forms.

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Confirm Immigration and Visa Requirements

Sure you wouldn’t want to travel outside the U.S to start up a new business and get deported back or perhaps, having to face any form of maltreatment. This is why checking immigration and visa requirements is a very important step that needs not much to be left out.

Depending on your purpose of visit to any foreign country, there are various categories/types of visa to be issued as license to leave freely in that country. Also, countries in the world have full autonomy to decide visa requirements issued for foreigners which is why checking for immigration and visa requirement for the country you want to launch your new startup is very important.

The first process to take in regards confirming visa requirements is hiring a travel agent or visit the immigration embassy of the country you intend working in as a U.S citizen. Take for instance you want to launch your business in South Africa from U.S, you can either do all process via an agent or visit the South African embassy in the United States.

Set up Banking and Financial Matters

Money laundering is no doubt an international problem and individual countries from all over the world keep coming up with new policies to tackle the high right of money laundering throughout their states.

Just like foreigners who wants to access full time banking system in the U.S., operating a full functional banking system in non-U.S. countries is even difficult (though not impossible) because of new financial policies of the United States which is aimed at reducing financial crimes as well as to prevent tax evasion (an act of running away from paying taxes) by keeping money abroad.

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Take for instance, the new law by the Foreign Account Tax Compliance Act (FATCA) requires that all U.S citizens must report all possession of financial assets owned by them outside the United States of America. This simply means that all U.S citizens having a bank account outside U.S for local transactions in that country must report their balances to the Internal Revenue Service (IRS) in U.S for values crossing $50,000 alone. For start, you will need to fill Form 8939 issued by the Internal Revenue Service (IRS). On the other hand, U.S tax payers are not required to fill form 8939 mentioned earlier or even, filling a tax return for the year irrespective of the amount they have in their foreign account balances.

Designate a Registered Agent in the United States (US)

Running a U.S based business abroad is 100% possible however, one will be needing the service of an agent in the U.S to take part in some of the activities you won’t be able to due to location barriers.

This is because you will need someone who will be receiving and dealing with personal and business mails including, other subject matters surrounding the successful growth of your business. However, this is not mandatory as you can manage this from your end provided you have a legitimate business address in the state. Though most U.S states suggest that you have an agent with a confirmed address (not PO BOXP) who can receive legal documents on your behave.

Learn and Understand the Foreign Earned Income Tax Exclusion

Benefitting foreign earned income tax exclusion may require that you get familiar with the basic principles as well as requirements and eligibilities of the program. This will sure help you to comply with the restrictions and limitation of the program.

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For instance, knowing what types of income that can be excluded may help you in planning and execution of couple of factors surrounding your business. Currently, earned income from salary, wages, professional fees and others are eligible for exclusion in the program. Earned income from dividends or other form of investment with ROI are not eligible for exclusion in the foreign earned income tax exclusion.

As mentioned earlier, understanding how the program works will assist you in knowing earned income that are eligible for exclusion as well as other restrictions and limitation for the program.

Key Takeaways

  • Seek consultation/advice from an experience tax professional in tax matters and reporting for expatriates.

  • Ensure you possess all required immigration papers and visa as seen eligible by the country’s embassy.

  • Establish and ensure you set up a banking and financial matter by following all criteria as seen fit by FATCA law. You are also required to fill form 8939 if you are not a U.S tax payer and your international balance/assets exceed $50,000.

  • Designate an agent with a valid address in the U.S to carter and process most of your business and personal mails. First you need to confirm as every U.S. state have various requirements.

  • Understanding the foreign earned income tax exclusion as it will be an important part of filling your taxes.


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