Business Setup

1. Select the State of Incorporation

• States such as Texas, Delaware, California, and Georgia are commonly considered, depending on where the business will actually operate and its purpose. Rather than deciding based on taxes or filing costs alone, it's advisable to weigh the following factors together.

• The state where the business premises will actually be located

• The region where employees will work

• The primary area of business activity

• Tax and ongoing maintenance costs

• Plans to raise investment

• Business licensing and regulatory requirements

• Texas: Widely used as a U.S. entry point for manufacturing, logistics, energy, semiconductors, and other industries. Because the Texas Franchise Tax applies in place of a general state corporate income tax, the decision to incorporate there should be based on the actual business plan and tax review — not simply on the assumption that "there's no state corporate tax."

• California: Often considered when the actual business premises will be located in California; taxes and various regulatory and maintenance costs should be reviewed together.

• Delaware: Its well-developed corporate law and governance framework make it a common choice for companies planning to raise outside investment, manage multiple shareholders, or operate a complex corporate structure. It is not necessarily the most advantageous state for every company, and if the actual business is conducted in another state, separate registration in that state may be required.

• Georgia: A region where Korean companies have been actively expanding, particularly in automotive, battery, manufacturing, and logistics. Decisions to incorporate there can take into account the location of business premises, hiring, logistics infrastructure, and potential state and local incentives.

2. Decide on the Entity Type (LLC or Corporation)

• This decision reflects the business purpose, ownership structure, outside investment plans, U.S. hiring plans, and any plans to assign employees from the Korean parent company.

3. Choose and Verify the Company Name

• Check with the relevant state authority for name conflicts.

4. Designate a Registered Agent

• A Registered Agent must be designated within the state of incorporation to receive legal documents; service costs vary by provider and by state.

5. File Formation Documents (Articles of Organization / Incorporation)

• LLC: Articles or Certificate of Organization

• Corporation: Articles or Certificate of Incorporation

• Document names and filing procedures can vary by state.

6. Apply for an EIN (Employer Identification Number)

• A federal tax identification number issued by the IRS.

• Used for tax filings, hiring employees, and banking.

• There is no application fee for the EIN itself from the IRS.

• Not every foreign applicant can apply online; depending on the applicant's circumstances, other methods such as fax or mail may be required.

• A company involving a foreign individual without an SSN can still obtain an EIN through certain procedures.

7. Draft an Operating Agreement (LLC) / Bylaws (Corporation)

• Prepare the internal documents needed to govern ownership and decision-making within the company.

8. Open a Business Bank Account

• After formation, consider opening a U.S. business bank account to operate the business.

• Generally requires the EIN and formation documents.

• KYC and internal review standards vary by bank, and some banks require the representative or beneficial owner to visit the U.S. in person.

• Some financial institutions offer remote account opening, but not every company can open an account without visiting the U.S.

9. Report the Overseas Direct Investment

• If a Korean entity or resident is contributing capital to the U.S. entity, the applicable foreign exchange regulations may require an overseas direct investment report and ongoing compliance, depending on the investment structure.

• The specific reporting method and required documents vary depending on the investor, the form of investment, and the bank involved, so this should be confirmed before remitting funds.

10. Additional Business Licenses and Tax Registrations to Check

• Depending on the business location and industry, the following additional registrations may be required.

• State or city business registration

• Sales tax registration

• Payroll-related registration

• Industry-specific licenses or permits

Note: If You're Planning to Assign Employees, Check This from the Incorporation Stage

• If you plan to assign employees from the Korean parent company to the U.S. entity, it's advisable to review the U.S. entity's ownership structure and its relationship with the Korean parent from the incorporation stage. For L-1, a qualifying corporate relationship between the Korean parent and the U.S. entity is important; for E-2 Employee, the U.S. company's ownership structure and nationality can be key requirements.

• Rather than incorporating first and considering visas afterward, it is generally more efficient to decide on the corporate structure with future assignment plans and job roles already in mind.

• Foreign individuals or foreign companies without U.S. citizenship or permanent residency can generally form an LLC or Corporation.

• Forming a U.S. entity does not automatically grant the right to stay or work in the United States.

• To actually work in the U.S., you must separately obtain a visa or status suited to the purpose of the work and the company's structure, such as L-1 or E-2 Employee.

• The EIN is an important identifier for the U.S. entity's taxes and operations.

• The Registered Agent must be maintained continuously if required by the state of formation.

• U.S. entities may have various ongoing filing and compliance obligations, such as federal and state tax filings, annual reports, and franchise tax, depending on the entity type and state.

• If the actual place of business differs from the state of formation, additional registration such as foreign qualification may be required in that business location.

• When investing from Korea into the U.S. entity, related foreign exchange procedures such as the overseas direct investment report must be confirmed.

• Opening a U.S. bank account may require a visit to the U.S. depending on the financial institution's KYC and internal review standards.

• If you plan to assign employees from the Korean parent company in the future, it is advisable to review the ownership and governance relationship between the Korean parent and the U.S. entity from the incorporation stage.

※ BOI Reporting Guidance

Typical U.S. entities formed today are currently exempt from FinCEN's Beneficial Ownership Information (BOI) reporting requirement.

However, a foreign-formed entity that registers to do business in the U.S. may still trigger a BOI reporting obligation, so applicability should be confirmed separately based on the entity's structure.

Yes. Non-U.S. persons can form either an LLC or a Corporation, and an EIN (the federal tax ID) can be obtained without a Social Security number. A U.S. address or phone number is not required either, and the filing can be handled through an attorney or agent.

An LLC offers flexible operation and is favoured by smaller businesses and start-ups; its pass-through taxation flows to the owner’s personal income tax. A Corporation (C-Corp or S-Corp) suits larger operations and outside fundraising, especially a C-Corp, but is subject to corporate income tax and to double taxation when dividends are distributed.

The usual candidates are Texas, Delaware, Wyoming, Nevada, California, and New York. Delaware is corporation-friendly with low taxes and is popular with start-ups and foreign founders; Texas has no state corporate income tax, relatively low fixed costs, and strength in logistics, manufacturing, and energy. California carries higher taxes but is chosen when the actual place of business is there.

Formation approval takes about two weeks, the EIN is issued in about a day when filed online, and opening a business bank account takes about a week, for roughly three weeks in total. The timeline varies with how quickly documents are ready and whether a bank visit is required.

No. Incorporation and immigration status are separate: a visa or status appropriate to your purpose must be pursued on its own track. If capital comes from Korea, an overseas direct investment report must be filed before the contribution and the funds remitted within one year of that filing, and after formation the company must meet state obligations such as annual reports and franchise tax.

DaeYang works through the practical steps: choosing the state and entity type, clearing the company name, appointing a registered agent, filing the formation documents, obtaining the EIN, drafting the operating agreement or bylaws, opening the business bank account, and filing the Korean overseas direct investment report. The same team then carries the work into post-formation operations, visa strategy, and tax planning.