What is the difference between forming a company and registering to do business?

Formation is where the company is created. Registration is where it's authorized to operate. A company might form as a Delaware corporation, then later open an office, hire employees, or store inventory in Texas. At that point, it likely needs to register in Texas as a foreign entity too. The word "foreign" causes a lot of confusion. In U.S. state entity law, it usually means foreign to that particular state. A Delaware company registering in Texas is "foreign" in Texas, even if every owner is American. A German, Canadian, or Singaporean company registering in Texas is foreign there too. The terminology is confusing, even for sophisticated founders.

What is foreign qualification?

Foreign qualification is the process of registering an entity in a state other than the one where it was formed. It usually involves an application, a registered agent, a certificate of good standing from the formation state, and state fees. Skipping foreign qualification can create real problems: penalties, back fees, tax complications, and limits on the company's ability to sue in that state until the issue is fixed.

Should we form a new U.S. company or register our existing foreign company to do business in the United States?

This is often the first serious structural question. A foreign company entering the U.S. market generally has two choices: form a new U.S. subsidiary, or register the existing foreign company to do business in one or more states. Many foreign companies prefer a U.S. subsidiary because it can simplify banking, contracts, hiring, and customer relationships, while helping separate U.S. liabilities from the parent company. But a subsidiary isn't automatically better. It brings its own tax, accounting, and governance issues. Registering the foreign parent directly can make sense where U.S. activity is limited or temporary. It can also expose the foreign company more directly to U.S. lawsuits, tax filings, public records, and state compliance obligations. The first question isn't always "Where should we form a U.S. company?" Sometimes it's whether a new U.S. company should exist at all.

What is the best state to form a U.S. company?

There's no universal answer here. Anyone who tells you otherwise is probably selling online incorporation packages. Delaware is often the baseline for companies expecting venture capital, outside investors, stock options, or a future sale. Texas or Florida may make more sense for a company that will actually operate there. Wyoming can work for some smaller, closely held businesses where low annual costs and limited public disclosure matter more than investor familiarity. The right state is the one that fits the company's ownership, tax situation, financing plans, and actual U.S. operations.

Should every foreign company form in Delaware?

Delaware is popular for good reasons. It has sophisticated corporate law, a respected business court, and a legal framework investors and lawyers know well. If you're planning to raise U.S. venture capital or issue equity to employees, Delaware should be high on your list. But Delaware doesn't make other states disappear. If the company forms in Delaware while its office, warehouse, employees, or inventory are in California, Texas, New York, Florida, or Washington, it may still need to register and comply in that state too. That can mean paying Delaware and the state where the business actually operates. Duplicate compliance isn't efficiency.

Do customers, employees, or inventory in a state mean we have to register there?

Customers alone usually don't require a company to register in every state where it makes sales. If that were the rule, interstate commerce would be unworkable. The analysis changes once the company has a real operational footprint somewhere. Offices, employees, leased property, warehouses, inventory, and regular local business activity are far more likely to trigger registration. Tax is a separate question. A company might not need to register as a foreign entity in a state but still owe sales tax, payroll tax, income tax, or franchise tax there. Entity registration and tax registration overlap, but they aren't the same thing. Many companies get into trouble by assuming they are.

Does forming in Delaware help us avoid taxes in other states?

No. Delaware isn't a tax shield for business activity happening somewhere else. If a Delaware company has employees in Washington, inventory in California, enough Texas sales to trigger sales tax obligations, or income sourced to New York, those states may still want filings, taxes, or registrations of their own. One of the most common mistakes foreign companies make is forming in Delaware, assuming they're done, and then discovering that the real compliance burden sits in the state where the business actually operates.

What about Wyoming and Nevada?

Online incorporation companies love Wyoming and Nevada. That doesn't mean either state is right for your company. Wyoming can suit some small, closely held businesses that want low annual costs and limited public disclosure. But it isn't a privacy shield, and it's usually the wrong choice for a company seeking institutional investors. Nevada markets itself as business-friendly, but the marketing often runs ahead of the substance. Plenty of companies choose Nevada because they read something online, not because Nevada fits their business. If the company's real operations are in California, New York, Texas, Washington, or another state, forming in Wyoming or Nevada won't make that state's registration and tax obligations go away.

Should a foreign founder choose an LLC or a corporation?

An LLC sounds simple. For foreign owners, it may not be. For U.S. owners, LLCs can be flexible and tax-efficient. For foreign owners, they can create tax filing, withholding, and accounting headaches. A foreign-owned single-member LLC that is disregarded for U.S. income tax purposes may still have federal reporting obligations, including Form 5472 and a pro forma Form 1120. Multi-owner LLCs raise partnership tax issues on top of that. Foreign-owned LLCs aren't always the wrong choice, they just shouldn't be the automatic one. If the company expects U.S. venture capital, outside investors, stock options, or a future sale, a Delaware C corporation is often cleaner. If the company will stay closely held by foreign owners with no outside investment expected, the LLC-versus-corporation decision should be made with both legal and tax advice. This is exactly the decision where bad advice gets expensive later, get it wrong here, and you're not just fixing paperwork; you're living with the wrong tax and ownership structure.

Can a foreign owner use an S corporation?

For most foreign founders, no. S corporations aren't designed for foreign ownership. They generally can't have corporations, partnerships, or nonresident alien shareholders. There are also limits on the number and type of shareholders an S corporation may have. This matters because domestic small-business blogs constantly praise S corporations for their pass-through tax treatment. Foreign founders who copy that advice can walk straight into an eligibility problem.

Can a non-U.S. person own a U.S. company?

Yes. Non-U.S. individuals and foreign companies can generally own U.S. LLCs and corporations. There's usually no citizenship or residency requirement just to own the company. Ownership isn't immigration status. A founder can own a U.S. company without being allowed to live or work in the United States. Working for the business from inside the United States is a separate immigration question. Some industries raise additional issues for foreign owners. Defense, telecommunications, aviation, banking, export-controlled technology, cannabis, government contracting, and other regulated sectors may involve licensing, sanctions, or national security restrictions. For most ordinary businesses, foreign ownership is straightforward. For regulated ones, ask before you file.

Do we need a U.S. director, officer, manager, or owner?

Most states don't require directors, officers, or LLC managers to be U.S. citizens or U.S. residents. That doesn't end the issue. Banks, payment processors, licensing agencies, and some regulated industries may have their own practical expectations around U.S.-based decision-makers, even when state law doesn't require one. And if a foreign officer wants to direct the company's U.S. operations from inside the United States, that's an immigration issue, not a corporate formation issue.

Does forming a U.S. company help me get a U.S. visa?

Not by itself. Forming a U.S. company may be part of an immigration strategy, but it doesn't give the founder the right to live or work in the United States. A foreign founder may be able to own a U.S. company from abroad. But coming to the United States to run that company, manage employees, sell to customers, or perform services usually requires separate immigration analysis. Depending on the founder's nationality, role, investment, company structure, and business plan, there may be visa options worth exploring. The company formation should be coordinated with that immigration strategy, not treated as a substitute for it.

Do I need a U.S. address to form a U.S. company?

Not necessarily. Most states require a registered agent with a physical address in the formation state. The registered agent receives legal and official notices for the company. A registered agent address isn't the same as a real business address. Banks, payment processors, tax agencies, landlords, customers, and vendors may all ask where the company actually operates. A registered agent satisfies one filing requirement. It doesn't create a real U.S. office.

A U.S. company generally needs an Employer Identification Number to open a bank account, hire employees, file tax returns, and operate normally. Foreign-owned companies often need one even if they have no U.S. employees. The IRS online EIN system isn't always available to foreign applicants. The online application generally requires a U.S. or U.S. territory business location and a responsible party with a valid taxpayer identification number, such as an SSN, ITIN, or EIN. If the company can't use the online system, it may need to apply by phone, fax, or mail. That takes longer, but it's routine.

Can I open a U.S. bank account remotely?

Sometimes, but banking is often where the process actually gets hard for foreign founders. Traditional U.S. banks frequently want detailed ownership information, identification documents, proof of business activity, and sometimes an in-person visit from a company officer. Some banks are more flexible than others, but questions and delays are normal. If a traditional bank won't open the account remotely, specialized fintech platforms may be more realistic. The best route depends on the company's ownership, country of origin, business model, expected transaction volume, and risk profile. Don't form the company on Monday and assume the bank account will be open by Tuesday.

What federal ownership reporting applies after formation?

As of this writing, federal beneficial ownership reporting rules treat U.S.-created entities and foreign-formed entities differently. Under current FinCEN guidance, entities created in the United States don't have to report beneficial ownership information to FinCEN. Foreign-formed entities are different. A foreign company registered to do business in a U.S. state may still have a BOI filing obligation if it meets the current definition of a reporting company and doesn't qualify for an exemption. Because the BOI rules have changed more than once, verify the current rule before filing, registering, or assuming no report is due.

What if my company has no U.S. office or employees?

A company with no U.S. office or employees may have more flexibility in choosing its formation state. Delaware, Wyoming, or another state may make sense, depending on ownership, tax planning, investor expectations, banking needs, and where future U.S. activity is likely to occur. But "no U.S. office" doesn't mean "no U.S. compliance." Sales tax, federal tax filings, import/export rules, industry regulations, payment processing rules, and banking requirements can all still apply.

What if we plan to hire employees in the United States?

The employee's work state matters. Hiring can trigger foreign qualification, payroll tax registration, workers' compensation, unemployment insurance, wage and hour rules, paid leave obligations, and other employment law requirements. These generally follow where the employee actually works, not where the company was formed. A Delaware company with employees in California isn't, in any practical sense, just a Delaware company. It's also a company dealing with California employment and tax compliance.

What if we plan to store inventory in the United States?

Inventory can change the analysis fast. Storing goods in a U.S. warehouse, fulfillment center, third-party logistics facility, or Amazon FBA location can create state registration, sales tax, franchise tax, or other compliance obligations, depending on the state and the specifics of the operation. Foreign companies often assume that no office and no employees means no U.S. footprint. That isn't always true. Inventory alone can be enough to create a meaningful presence.

What ongoing compliance comes after formation?

Formation isn't the end of the process. It's the start of the company's compliance life. A U.S. company may need to keep up with: annual reports, franchise tax filings, registered agent renewals, federal tax returns, state tax registrations, sales tax accounts, payroll registrations, business licenses, corporate minutes and ownership records, and accounting records and contract updates. A company operating in more than one state may have obligations in each state. This is another reason the initial structure matters.

Can we change our state of formation later?

Yes, but "later" usually means more expense and more paperwork. Depending on the states involved, you may need a domestication, conversion, merger, or new entity structure. Any of those can affect contracts, tax filings, bank accounts, licenses, cap tables, and investor documents. It's almost always cheaper to make a thoughtful decision up front than to clean up a bad one later.

What happens if we form in the wrong state?

The business probably won't collapse because it formed in the wrong state. The more likely result is an expensive administrative mess. Fixing the mistake can mean paying lawyers and accountants to unwind or restructure the entity, registering retroactively in the right state, paying back fees or penalties, updating tax filings, revising contracts, and explaining the cleanup to banks, investors, or buyers. Bad entity planning usually doesn't blow up all at once. It causes friction everywhere, often for years.

Can I file the paperwork myself online?

Typing a name into a state portal takes 10 minutes. That's the trap. Online formation platforms make the filing look effortless while ignoring the harder questions: tax classification, ownership structure, registered-agent setup, banking path, investor expectations, state registrations, and cross-border tax planning. For a simple domestic business with one owner and no cross-border issues, filing online may be fine. For a foreign-owned company entering the U.S. market, the filing is usually the least important part of the decision.

What should a foreign company decide before forming a U.S. entity?

Before filing anything, work through the questions that actually matter: where will the company operate, who will own it, will it seek U.S. investors, will it hire U.S. employees, will it store inventory in the United States, will it sell directly to U.S. customers, will it need a U.S. bank account quickly, will it import goods, hold licenses, or operate in a regulated industry, and how will profits move between the U.S. company and the foreign parent or owners. Those answers should drive the formation decision, not the trendiest state, not the cheapest filing fee, and not whatever an online incorporation site happens to be pushing that week.

Table of Contents

U.S. Company Formation for Foreign Companies: Entity, State, Tax, Banking, and Registration

In many states, forming a company takes a day. For a foreign company entering the United States, that filing is the easy part.
The important decisions come first. Will the foreign parent conduct the U.S. business itself, or will a subsidiary do it? Which entity and tax classification fit? Where should the company form, and where else must it register? How will it bank, hire, hold inventory, pay taxes, and stay current? Those answers should follow the business plan. Nearly every U.S. structuring problem we are asked to fix for a foreign company traces back to a question no one asked before filing.

Foreign Parent, U.S. Subsidiary, or Neither

Start by deciding whether you need a U.S. entity at all. A foreign company can sell to U.S. customers from abroad or use an independent U.S. distributor that buys and resells products on its own account. Either approach can work for market testing, though both raise contract, tax, and regulatory questions. One is whether a U.S. representative’s activities create a taxable presence for the foreign company.

Companies working informally with a U.S. partner should also determine whether their agreement or conduct creates an unintended partnership. U.S. partnerships can arise without a written partnership agreement or state filing. Our broader guide to doing business in the United States addresses this and other operational issues.

A foreign company that operates here directly must register in each state where its activities constitute doing business. Direct registration can work for a defined project of limited duration, but it brings the parent into the U.S. legal and tax system. U.S. contracts, lawsuits, licenses, tax filings, and state disclosures attach to the foreign company. A lawsuit arising from the U.S. operation is a lawsuit against the parent. Most foreign companies establishing substantial U.S. operations use a U.S. subsidiary. The subsidiary gives banks, employees, insurers, customers, and vendors a U.S. company to deal with. If properly maintained, it also separates the parent’s assets from the liabilities of the U.S. business.

That separation depends on adequate capitalization, separate bank accounts and books, documented intercompany dealings, and consistent treatment of the parent and subsidiary as distinct companies. A parent guarantee exposes the parent on the guaranteed obligation, and careless operations can weaken the liability protection the subsidiary was intended to provide. A subsidiary also brings tax, accounting, governance, and compliance obligations. The decision should account for tax treatment in both countries, treaty eligibility, funding, profit repatriation, and the expected size and duration of the U.S. operation.

LLC or Corporation?

State law determines an entity’s legal form. Federal tax law determines how it is taxed. The owner’s home country can classify the same entity differently, producing unexpected tax and treaty consequences.

An LLC offers flexible ownership and management. For foreign owners, however, it can create withholding, reporting, and treaty problems that do not arise in a purely domestic structure. Some countries classify U.S. LLCs differently from the United States. That mismatch can produce inconsistent tax treatment or defeat treaty benefits the owner expected to receive.

A foreign-owned single-member LLC is ordinarily disregarded for U.S. income tax purposes. “Disregarded” is a tax classification, not an exemption from federal reporting. When the LLC has reportable transactions with its foreign owner, including certain contributions, payments, and distributions, it must file Form 5472 with a pro forma Form 1120. A late, incomplete, or improperly filed Form 5472 carries a $25,000 penalty, followed by additional penalties if the failure continues after notice from the IRS. We regularly meet owners who assumed a disregarded entity with no U.S. income had nothing to file. A multi-member LLC is taxed as a partnership unless it elects corporate treatment. Foreign ownership adds withholding, return, and partner-reporting obligations.

A C corporation usually fits a company expecting institutional investment, multiple classes of equity, employee options, or an eventual sale. Investors and their counsel know the structure and its documents. The standard objection is double taxation: once at the corporate level and again when profits are distributed. For a subsidiary owned by a foreign parent, the second layer commonly takes the form of withholding on dividends, often reduced by treaty. That makes treaty analysis more useful than a generic discussion of double taxation. An S corporation is unavailable if a nonresident alien, corporation, or partnership is a shareholder. The IRS eligibility rules make most online S corporation advice irrelevant to foreign-owned companies.

Our separate article, Choosing the Right U.S. Business Entity: LLC vs. Corporation, examines these choices in greater detail. Foreign owners should coordinate U.S. and home-country tax advice before deciding.

Where to Form

The state of formation is where the entity is created. Foreign qualification is the separate process of registering that entity to do business in another state. A Delaware corporation that opens an office in Texas is domestic in Delaware and foreign in Texas. A German company registering directly in Texas is foreign there as well. In U.S. state business law, “foreign” usually means formed outside the state, not necessarily outside the country. The right formation state depends on where the company will operate, how it will be taxed, and whether it expects outside investment. A closely held company operating in one state seldom gains much by forming elsewhere and then registering again where it conducts business. We usually recommend forming in the state of operation unless a specific legal, tax, or investment reason points elsewhere.

Delaware deserves serious consideration for a company expecting venture capital, private equity, complex stock rights, employee equity, or a sale. Its corporate law is deep and familiar, and its Court of Chancery specializes in business disputes. A Delaware company operating in California, Texas, New York, Florida, Washington, or another state still must comply with that state’s registration, tax, employment, and licensing laws. Delaware’s franchise tax can surprise founders who authorize millions of shares and then receive a large bill calculated under the authorized-shares method. The assumed par value capital method can substantially reduce the bill when its requirements are met.

Wyoming and Nevada suit some closely held businesses. Neither provides a universal tax or privacy solution. A company formed where it has no operations can end up paying two sets of annual fees, filing reports in two states, and retaining two registered agents.

Where Else the Company Must Register

Every state defines “doing business” under its own law. Offices, employees, leased property, warehouses, and sustained local operations often require foreign qualification. Interstate sales and isolated transactions often fall within statutory exceptions, but each state draws its own lines.

Employees create obligations where they work. Hiring in a state can require foreign qualification, payroll-tax registration, an unemployment-insurance account, workers’ compensation coverage, workplace notices, and compliance with local wage and leave laws. Remote work does not avoid these requirements. A Delaware corporation whose only U.S. employee works from an apartment in Los Angeles operates under California employment law. Worker classification follows the actual relationship. Calling someone an independent contractor in an agreement does not settle the issue.

Inventory creates another set of connections. Goods stored in a warehouse, third-party logistics facility, or marketplace fulfillment center can trigger sales-tax nexus, income or franchise taxes, permits, and sometimes foreign qualification. Marketplace providers move inventory among states, which can create obligations in jurisdictions the seller did not select. A company without a physical presence can also cross a state’s economic-nexus threshold through sales alone. Marketplace-facilitator laws can shift collection duties to a platform without eliminating every seller registration or filing obligation.

Foreign qualification usually requires an application, a registered agent, evidence of good standing in the formation state, and a filing fee. If the legal name is unavailable, the company must use an alternate name in that state. Operating without required qualification can lead to back fees, penalties, and, in many states, an inability to maintain a lawsuit until the default is cured. That problem often surfaces when the company needs to sue a customer who has not paid.

Registration should be reconsidered whenever the company adds employees, inventory, an office, or sustained activity in another state. When the company leaves a state, it should withdraw formally and close related tax and licensing accounts.

Entity registration and tax nexus require separate analyses. A company can owe tax in a state where it need not qualify, or need to qualify where it owes no income tax.

Ownership, Governance, and Intercompany Agreements

Formation documents establish the entity but leave most ownership and governance rules unresolved. An LLC operating agreement should identify the owners and managers, voting rights, capital commitments, distribution rules, transfer restrictions, and signing authority. It should also address deadlock, departure, death, incapacity, and dispute resolution. Those provisions are of little help if drafted after a disagreement begins.

Succession provisions matter even in a single-member LLC, particularly when the owner, heirs, or company assets are in different countries. We have represented a family dealing with a difficult foreign probate problem after an LLC owner died without an operating agreement or succession plan. Our article on U.S. LLC operating agreements discusses the issue further.

A corporation needs bylaws, organizational resolutions, subscription or stock-purchase documents, a stock ledger, and a clear record of director and officer authority. A company expecting investment should maintain an accurate capitalization table from the beginning rather than reconstructing one during due diligence.

When a founder, employee, or contractor receives restricted stock or other substantially nonvested property for services, a Section 83(b) election can carry important tax consequences. The election must be filed no later than 30 days after the property is transferred. The IRS now provides Form 15620 for Section 83(b) elections, though the recipient should obtain tax advice before filing.

Foreign-owned companies also need to document relationships with their parents and affiliates. Capital contributions, shareholder loans, management services, intellectual-property licenses, manufacturing arrangements, and distributions all require documents that match the companies’ actual conduct.

The most common failure we see is money wired from a parent to a subsidiary without documentation. Months later, no one can say whether the payment was a loan or a capital contribution. That characterization matters to the IRS, the bank, investors, and anyone seeking to reach the parent in litigation.

Intercompany transactions must use appropriate pricing. For penalty protection and audit defense, companies commonly prepare contemporaneous documentation supporting that pricing under U.S. transfer-pricing rules.

Names, Registered Agents, and Addresses

A state’s approval of a company name confers no trademark rights. It confirms only that the name satisfies the state’s entity-filing rules. Before committing to a name, check availability in the formation state and each state where the company expects to register. Then search federal and state trademark records, domain names, and businesses already using similar names. The USPTO trademark database is the proper starting point, although a database search alone does not resolve every infringement question.We have seen companies delay registration in a new state and lose the ability to use their legal name there after another business obtained an intervening approval.

A company operating under a trade name different from its legal name also needs an assumed-name or DBA registration where required.

Every state where the company is formed or qualified requires a registered agent with a physical address in that state to receive lawsuits and official notices. The registered-agent address is not the company’s business address. Banks, tax authorities, payment processors, landlords, customers, and licensing agencies want to know where the company actually operates. Listing a friend’s apartment, an unexplained virtual office, or the registered agent’s address as the operating location creates inconsistencies among bank applications, contracts, insurance certificates, and government filings. Compliance departments notice those inconsistencies.

EINs and Banking

Nearly every U.S. company needs an Employer Identification Number to file tax returns, open accounts, hire employees, and conduct ordinary business. The entity should be formed before the EIN application is submitted. The IRS online EIN system is available to a domestic organization with its principal place of business in the United States or a U.S. territory when the responsible party has an SSN or ITIN. An eligible online applicant receives the number immediately.

An international applicant with no U.S. legal residence, principal place of business, principal office, or agency can apply by telephone and ordinarily receives the EIN during the call. The Form SS-4 instructions state that fax applications are generally processed within four business days and advise mailed applicants to apply four to five weeks before they need the EIN. A U.S.-based applicant that cannot use the online system must use fax or mail rather than the international telephone procedure.

The responsible party should be the individual who owns or controls the company, not a formation service, registered agent, or nominee selected for convenience. An EIN identifies the company to the IRS. It provides no state registration, immigration status, or assurance that a bank will open an account.

Banking is frequently the slowest part of the process. We regularly hear from foreign companies only after a U.S. customer has issued a purchase order and requested ACH information the company cannot provide. Banking should begin as part of the formation plan, not after the first payment is due.

A U.S. financial institution must understand who owns and controls the company, what the business does, and how money will move through the account. FinCEN’s February 2026 exceptive-relief order removed the requirement that a bank identify and verify beneficial owners every time an existing legal-entity customer opens another account. Verification still applies when the relationship begins and when risk-based review calls for updated information. Because the relief is permissive, banks remain free to continue their existing collection practices.

Requirements vary by institution. A foreign-owned company should expect to provide formation documents, ownership records, governing documents, the EIN confirmation letter, identification for owners and signers, evidence of signing authority, and a coherent description of its business and expected payment flows. Names, addresses, ownership percentages, and authority should match throughout the package. Some banks open accounts remotely. Others require an owner, officer, or authorized signer to appear in person. Fintech platforms serve some companies, subject to their eligibility and risk rules.

A straightforward application can be approved within one or two weeks after the bank receives the EIN and a complete set of company and ownership documents. Foreign-owned companies should nevertheless allow several weeks. Complicated ownership, regulated activities, unusual payment flows, and in-person requirements can extend the process considerably.

Tax and Ownership Reporting

Entity choice, ownership, and operations determine the company’s tax and filing obligations. The analysis can include federal income and information returns; state income, franchise, sales, and payroll taxes; withholding on cross-border payments; transfer pricing; and taxation in the owner’s home country. A foreign parent operating directly in the United States must determine whether it is engaged in a U.S. trade or business, whether it has a permanent establishment under an applicable treaty, and whether the branch-profits tax applies.

A U.S. subsidiary presents different questions involving dividends, interest, royalties, service fees, and other related-party payments. Funding and repatriation should be planned before money moves. A payment intended as a loan, capital contribution, dividend, royalty, or service fee needs documents and accounting treatment consistent with that characterization.

Under FinCEN’s rule effective August 14, 2026, entities created in the United States and their owners are exempt from federal beneficial-ownership reporting under the Corporate Transparency Act. Entities formed under foreign law that register to do business in a U.S. state or tribal jurisdiction remain reporting companies unless an exemption applies. A foreign reporting company files information about its foreign beneficial owners, but not its U.S. beneficial owners. A foreign entity registering now has 30 calendar days after receiving notice that its registration is effective to file its initial report. Because these rules have changed repeatedly, companies should check FinCEN’s current BOI guidance before forming or registering.

Federal relief did not displace state disclosure laws. Effective January 1, 2026, New York requires nonexempt LLCs formed under foreign-country law and authorized to do business in New York to file initial and annual beneficial-ownership disclosures. Exempt companies must file attestations of exemption. Companies authorized before January 1, 2026, have until the end of 2026 to make the initial filing. The New York Department of State provides current forms and instructions. These reporting changes do not reduce bank due diligence. Ownership and management information also appears in tax filings, licensing applications, state reports, and ordinary business records.

What Formation Does Not Cover

A formed company still needs the licenses, contracts, insurance, intellectual-property rights, and immigration authority required for its business. Some industries demand additional review, including defense, telecommunications, aviation, financial services, government contracting, export-controlled technology, and cannabis. Importers and manufacturers should address customs classification, duties, product safety, labeling, warranties, indemnification, and product-liability insurance before the first shipment arrives.

A foreign company acquiring an existing U.S. business faces another layer of review. The Committee on Foreign Investment in the United States can review foreign investments involving control and certain noncontrolling investments in businesses dealing with critical technology, critical infrastructure, or sensitive personal data. The Treasury Department’s CFIUS regulations summary explains the principal categories.

The U.S. company should confirm that it owns or licenses the intellectual property it uses. Contractor and affiliate rights, in particular, often require written assignments or licenses. A business built around software, designs, inventions, proprietary content, or a brand should complete those documents early, while everyone remains cooperative. Ownership of a U.S. company provides no right to work in the United States. A founder can own the company from abroad, but working for it while physically present here requires separate immigration analysis.

Structure and immigration also interact. An E-2 treaty-investor visa requires the enterprise to have the necessary treaty-country nationality. An L-1 transfer requires a qualifying corporate relationship between the foreign employer and the U.S. entity. A structure chosen without considering future immigration needs can foreclose both routes.

Ongoing Compliance

Formation begins the company’s compliance life. Depending on its structure and activities, the company will need to track annual state reports, franchise taxes, registered-agent renewals, federal and state tax filings, sales and payroll taxes, licenses, ownership records, intercompany agreements, and approvals required by its governing documents. A company operating in several states has some version of this list in each jurisdiction. Its compliance calendar should cover every state where it is formed, registered, taxed, licensed, or employing people.

Registered-agent services forward official notices. Responsibility for the company’s legal and tax compliance should belong to a named person inside the business or to a retained outside professional.

Get the Structure Right Before Filing

Good formation work starts with facts: who will own and manage the company, where its people and property will be located, whether it will raise outside capital, how money will enter and leave the United States, what its bank will require, and which entity will own the intellectual property and sign the contracts. Once those questions are answered, the filings are usually straightforward.

Most formation problems trace to a fact nobody surfaced beforehand: an employee already working in another state, inventory stored in a fulfillment center, money moving between related companies without documentation, or ownership records that contradict a bank application. Companies often come to us after forming in the wrong state, choosing an unsuitable tax classification, listing a formation service as the responsible party, or signing a template operating agreement nobody has read. Many of these problems can be repaired through corrected filings, conversion, domestication, or a late tax election. Repair becomes more expensive once a bank, investor, tax authority, buyer, or opposing party discovers the problem.

Formation services handle state filings. Foreign companies entering the United States need a structure that also works for taxes, banking, contracts, employees, investment, and operations. Harris Sliwoski’s Foreign Direct Investment team helps international companies plan and establish their U.S. operations.