Business Setup
Guide to U.S. Business Entity Formation (Based on LLC & Corporation)
Types of Business Entities That Can Be Established
LLC (Limited Liability Company)
Limited Liability Company (LLC), similar to a Korean limited company, allows flexible management Preferred for small businesses and startups, Pass-through taxation subject to individual income tax
Corporation (C-Corp, S-Corp)
Corporation type. Preferred for large-scale businesses and attracting outside investment (Especially C-Corp), subject to corporate tax; double taxation occurs on shareholder dividends
Basic Incorporation Process
1. Selecting the State
Common choices include Texas, Delaware, Wyoming, Nevada, California, New York, etc.
Example: Delaware — corporate-friendly, low taxes, preferred by startups and foreigners
- Example: California — preferred if the business is physically located there (higher taxes)
- Example: Texas — no state corporate tax, relatively low fixed costs, strong in logistics, manufacturing, and energy industries
2. Decide on Business Entity Type (LLC or Corporation)
3. Choose and Verify Business Name
Check for name availability on the state government’s website
4. Designate a Registered Agent
Required legal representative within the state to receive official documents
Typically costs $100–$300 per year
5. File Incorporation Documents (Articles of Organization / Incorporation)
LLC: Articles of Organization
Corporation: Articles of Incorporation
Usually can be filed online with the state government
6. Apply for EIN (Employer Identification Number)
Issued by the IRS (U.S. tax identification number)
Free and can be applied for online
No need for U.S. address or phone number (can be done via attorney or agent)
7. Prepare Operating Agreement (LLC) / Bylaws (Corporation)
8. Open Business Bank Account
U.S. bank account is necessary
Usually requires EIN
9. Report Overseas Direct Investment (at domestic bank)
Reporting obligation before capital contribution; funds must be remitted within one year of reporting
Requires business plan and securities acquisition report, etc.
※ Optional: Business licenses and tax registrations
Some states/cities require business registration (e.g., LA business license)
Processing Time
| Procedure | Duration |
|---|---|
| Business Formation Approval | Approximately 2 weeks (may vary depending on document preparation) |
| EIN Issuance | 1 day (if applied online) |
| Bank Account Opening | About 1 week (depends on bank and whether in-person visit is required) |
| Total Processing Time | Around 3 weeks |
Important Notes
Corporations can be established without U.S. citizenship or permanent residency (LLC, Corporation)
EIN is mandatory (can be issued without an SSN)
Registered Agent designation is required
U.S. bank account opening is necessary (can be done online): possible to open an account from Korea without visiting the U.S.
U.S. tax and reporting obligations apply (penalties for non-compliance)
Visa for stay or employment is separate and required (incorporation alone does not grant visa status)
Reporting to Korean authorities for overseas investment is required (in compliance with foreign exchange regulations)
Compliance with annual reporting, franchise tax, and other state-specific obligations is necessary