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Betsy Wise
By: betsy_wise
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How to Start a Business as an Immigrant in the US

Learning how to start a business in the USA for non-citizens is a common question among those who come to the country searching for better opportunities and want to follow the path of opening their small businesses.

Immigrants or not, anyone wanting to launch a business must first learn what’s required before proceeding.

Do you know what documents you need or how to find resources to educate yourself on finances?

Maybe you already earn money and need to pay taxes but have no idea how.

This post will provide detailed information on starting a business and answer any nagging questions you may have.

Furthermore, once you start a business, you’ll want to secure funding to keep growing your enterprise. We’ll talk about business loans for immigrants, too.

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Impact of immigrant businesses in the USA

Believe it or not, immigrants are a vital segment of the entrepreneurial population in the United States. Without their contribution to the economy and the market, America would not be what it is today.

According to a 2019 report by National Geographic, immigrants and their US-born offspring account for founding 44 of the top Fortune 500 companies. Some of those companies include Amazon, Apple, and Proctor & Gamble, which indicates it’s possible to succeed in America.

JP Morgan Chase recently reported a Stanford Graduate School of Business study. Latino entrepreneurs are starting a business as immigrants faster than other segments of the population. Based on their growth, by 2050, Latino-owned businesses will make up 29% of the US population.

Immigrant-Founded Companies Are In Every Industry Across The Fortune 500

Bar chart of companies founded by immigrants

So it is not a question of if you could have success as an entrepreneur, it is a question of when you’re going to achieve that success.

Let’s learn how to start a business in the USA for non-citizens.

Starting a business as an immigrant in the US

When you first learn how to start a business in the USA for non-citizens, make sure you find resources for legal help. Free or low-cost legal services are available to address various legal issues.

If your immigration status is not ready, you can’t receive a social security number. You should first apply for an ITIN (Individual Taxpayer Identification Number) or an EIN (Employer Identification Number).

Having that number is your first step to starting a business as an immigrant. Then, you can legally register your own business, open a business bank account, pay income tax, and even build a credit history when making purchases.

It’s even possible to get a business loan with an ITIN.

Remember that the rules and laws to start a business can vary per state and town. At first, understanding what’s required is challenging. But it’s essential to know the requirements, get your documents in order, and adhere to the regulations.

Small business immigrants face specific challenges that other entrepreneurs don’t. For instance, there’s usually a language barrier if immigrants aren’t fluent in English and might be unaware of cultural norms.

Many immigrants haven’t built a support network in their new country to help answer questions about starting a business.

Commonly, they are uncertain about US regulations, taxes, and advertising and may have insufficient funds to start a business. And in many unfortunate cases, they face discrimination and may have trouble finding a suitable business location to rent.

You can build wealth even if you don’t have legal immigration status.

To offset these concerns, it’s important to offer goods and services from your native country. You’ll feel more confident and have an edge in the market because you’re passionate about what your business offers.

Find an English tutor to learn all the particularities of the language and become a member of the Latino Business Association or a similar group dedicated to helping foreign immigrants.

Requirements to open a company in the USA

Anyone desiring to start a business can use this detailed list to complete the necessary steps and start earning money as an entrepreneur, even immigrants:

Create a business plan

Like anyone taking a road trip, you don’t know where you’re going unless you have a map. That’s true when starting a business. Make the plan as detailed as possible, including sections on marketing analysis, management, a description of your goods and services, marketing and sales, financial projections, and other pertinent details related to your business model.

Determine your business operations

Where will you operate your business? Do you need to rent space, buy a mobile unit (dog grooming, food truck, or handyman), or use your home’s basement (fitness trainer, bookkeeper, freelancer)? Where you operate your business determines the local, state, and federal requirements.

How to register a company in the USA

Decide what type of business structure is the best. Familiar business entities include sole proprietorship, c corporation, limited liability company, and several types of corporations.

Your structure determines how much taxes you pay, the required legal documents, and your personal liability. An accountant can advise you which business entity works best for your type of business.

Look into getting business insurance to protect you against accidents, natural disasters, and lawsuits. Shop prices and benefits and reassess your needs as the business grows.

Unless you operate your business as a sole proprietorship and use your social security number (or your ITIN), you should apply for federal and state tax ID numbers.  You’ll also use the ID numbers to pay taxes, hire employees, and file tax returns.

Secure a business license and any permits required by local, state, and federal authorities to run your business. For example, you need a license to transport animals, sell alcoholic beverages, operate a commercial fishery, or drill for natural gas or oil on Federal land.

Choose a business name

Make sure another brand doesn’t use your business name already. It should reflect what your business is about or your brand. Register your business name with state and local governments.

Selecting your teamwork

Decide if you need to hire employees. How many do you need? How much will you pay them? It’s vital to answer all these questions before you start looking. You can hire one or more employees or use independent contractors.

Choose an accounting system

Even if you keep your books yourself, it’s important to keep your financial affairs. Accounting software can help you set up a budget and chart of accounts and streamline your finances.

Looking for funding options

Determine how much funding you need to start and sustain your business

Decide whether you need help. When you start a business, you may need help with several things. You may need to hire a small business coach or an advertising expert.

Finding someone to help out financially is also essential; researching small business loans is encouraged to grow a business.

Regardless of which identity number you use, open a bank account to keep your personal and business expenses separate.

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Business opportunities in the USA for foreigners

There are many business opportunities in the USA for foreigners, especially if you have an entrepreneurial spirit.

The food truck boom

Many cities in the US are seeing a surge in the popularity of food trucks, which offer everything from gourmet sandwiches and tacos to crepes and cupcakes. Aspiring entrepreneurs can take advantage of this trend by starting their own mobile food business, whether a taco stand or ice cream truck.

The pet care industry

Americans love their pets, spending billions of dollars on food, toys, grooming, and other pet-related products and services. The pet industry is now bigger than the airline industry! As a foreigner with an affinity for animals or a background in animal care, you could capitalize on this trend by starting a pet-related business, such as a pet daycare or grooming service.

The health and fitness craze

Many Americans strive to improve their physical health and wellness through exercise, weight loss programs, and healthy eating habits.

As a foreigner interested in fitness and nutrition, you could capitalize on this trend by starting a business that helps people live healthier lives, such as a personal training service, health food delivery service, or fitness app.

The growing demand for home services

With more and more Americans working long hours and juggling family responsibilities, there is an increasing demand for businesses that offer home services, such as housecleaning, lawn care, and errand running.

As a foreigner with experience in these industries or a passion for helping people out around the house, you could start your own home services business and capitalize on this trend.

Business in the tourism industry

The US is one of the most popular tourist destinations globally, and there are several different ways to get involved in this sector.

For example, many people open bed and breakfasts or small hotels near popular tourist attractions. Others may work as tour guides, helping visitors to navigate their way around the country.

International trade and investment

The US has one of the largest and most diversified economies, and as such, it represents an attractive market for goods produced abroad.

For example, many American companies import electronics from China and other Asian countries to use in their manufacturing processes.

Similarly, US agriculture is a major export sector, with products such as soybeans and wheat shipped around the world.

Visas you could apply for

If you don’t live in the US but would like to, the U.S. Department of State requires that you obtain a US visa to do so, there are a few visa options you can consider.

The U.S. Immigration Law defines the appropriate visa you can acquire. When applying for this option, you must declare why you want to come to the US.

Choices are tourism or visit, business or employment, study or exchange, traveling through the US to another country, and coming to the US as an immigrant.

When applying for a visa, you may also indicate whether you have a spouse already a US citizen. You can get a visa for other reasons: to marry a US citizen, immigrate based on employment, or learn about the Diversity Visa Lottery.

The type of visa you can apply for depends on your reasons for coming.

Business owners who find the right business visa can boost their businesses. L-1 visas are for foreign business owners who want to expand their operations in the US for at least one year.

Additionally, E-2 visas are for individuals who demonstrate how they will run a profitable business in the US.

You may also be able to qualify for an H1-B visa offered to temporary workers with technical skills.

Discover the average cost of starting a business

Financing for immigrant business owners

After you arrive in the US, get settled, and start a business as an immigrant, it’s not uncommon to need funding. As you know, it’s challenging to keep your business going unless you have sufficient capital.

The JP Morgan Chase report above indicates that 40% of non-citizen Latino businesses fail to obtain business financing. Only half of the Latinos surveyed had received outside funding.

Finding someone that believes in you and your small business is not impossible. Here at Camino Financial, we know it is to be an immigrant who needs money to grow a small business. That’s why we offer loans specially designed for immigrants living in the U.S.

Why not apply for a business loan with us?

Because we have fewer loan requirements than most lenders, the application and funding processes are quicker. We take your financial concerns seriously and enforce our motto, “No Business Left Behind.” We take steps forward with you so your business grows!

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