Business Setup
U.S. Business Entity Formation
3 Things to Review Before Forming a U.S. Entity
With a U.S. entity, structure comes before formation.
Before choosing between an LLC and a Corporation, or deciding which state to form in, you need to look at your actual business location, ownership structure, tax position and employee transfer plans together. DaeYang Immigration reviews U.S. entity formation in connection with visas and taxes.
- LLC / Corporation
- State Selection
- EIN Application
- Overseas Direct Investment Report
- Employee Transfer Visas
- Korea–U.S. Tax Review
Actual Business Location
We review the state of formation based on where the business will operate, where employees will work, the main sales regions, and licensing and regulatory requirements.
Ownership & Corporate Relationship
We review the entity type and operating structure together with the relationship between the Korean headquarters and the U.S. entity, the ownership structure and future investment plans.
Employee Transfer & Tax Planning
Potential employee transfers such as L-1 or E-2 Employee visas and the Korea–U.S. tax impact are considered from the formation stage.
Choosing an LLC or Corporation
LLCs and Corporations differ in operations, taxation, fundraising and ownership structure. Choose the entity type that fits your business purpose.
LLC
Relatively flexible internal operating structure
Used for small businesses and new U.S. market entries
Tax treatment depends on ownership structure and tax elections
Korean investors and companies should review Korea–U.S. tax impact
Corporation
Used for U.S. subsidiaries of Korean companies
Suited to outside investment and complex ownership structures
Corporate tax and dividend-level taxation need to be reviewed
S-Corp status is restricted for foreign individuals and companies
Integrated Review: Formation · Visas · Tax
Handling each task separately can mean having to rework the ownership structure or visa requirements later.
If you plan to transfer employees, check this from the formation stage.
For L-1, a qualifying relationship between the Korean headquarters and the U.S. entity is key; for E-2 Employee, the U.S. company's ownership structure and nationality requirements can be critical. Rather than forming the entity first and fitting the visa afterward, it is important to design the structure around the planned transferees and their roles.
Basic Incorporation Process
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.
This also covers how the Korean parent and the U.S. business will be related — for example, forming a U.S. subsidiary or operating a branch.
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
Processing Time
| Item | Typical Duration |
|---|---|
| Entity formation approval | A few days to a few weeks, depending on the state and filing method |
| EIN issuance | Varies depending on the application method and applicant's circumstances |
| Bank account opening | Varies depending on the financial institution and review process |
| Overall process | Varies on a case-by-case basis depending on entity structure, EIN, and banking |
Important Notes
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.
※ 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.
FAQ
Can a foreigner set up a U.S. company without a green card?
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.
Should I choose an LLC or a Corporation?
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.
Which state should the company be formed in?
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.
How long does U.S. incorporation take?
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.
Does forming a company grant the right to live or work in the U.S.?
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.
How does DaeYang Immigration Law Group help with U.S. incorporation?
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.
