Background & Challenge
Client: Five OutBound
Industry: IT Consulting & Business Solutions (Data Engineering, Cloud Solutions, Staffing, and Advisory Services)
Location: International (outside the U.S.)
Today, Five OutBound is a growing IT and consulting company, providing a wide variety of cloud adoption, data engineering, software consulting, and staffing solutions to clients across the globe. With the digital transformation that is occurring in various industries, companies in the United States are among the most consumers of such services.
Despite their international presence, the company still faced challenges in establishing a credible presence in the United States. Some of the challenges included:
- Difficulty in signing contracts with U.S. clients who prefer working with domestic entities.
- High chance of losing clients due to the lack a U.S. business bank account
- Non compliance with U.S. tax law due to lack of the U.S. EIN (Employer Identification Number)
- Restricted to payment processors such as Stripe
In order to remove these vulnerabilities, Five OutBound removed these vulnerabilities by letting Bizstartz set the U.S. business infrastructure.
The Problems
The problems that Five OutBound faced are problems many other international founders and service providers face when trying to break into the United States market.
Deep rooted Restrictions
Many states across the United States are open to foreign LLCs. But the licensing process and additional documentation can get illusive without professional help.
IRS EIN Application for Foreign Owners
However frustrating it may be, there are numerous processes that need to be undertaken when trying to get EIN, especially as a non-resident foreigner. Oftentimes, people are required to file IRS form SS-4 and people get confused due to the lack of SSN or ITIN. Any minor blunder can result in weeks or even months of delays.
Obtaining payment gateways (especially Stripe)
Payments from Stripe can be a little tricky because you have to have a business form, and a bank account registered for a Foreign LLC in the United States in order to get approval. Many people who apply for it, only face rejection.
Obtaining a bank account
Obtaining a Bank account is tricky because foreign LLCs or non interstate companies need to follow KYC and AML checks which is along the lines of more traditional banking approaches. Sometimes foreign owners are required to be in the country to get a Foreign LLC which can be troublesome.
Time Sensitivity
Time is a major issue Five OutBound was trying to address. Every minute spent waiting, could be a minute lost in making use of an opportunity in the United States market.
The problems we solved
At BizStartz, we help clients from other countries establish and expand their businesses in the US from the ground up. For Five OutBound, we created a tailored strategy.
1. Formation of the LLC
- We help Five OutBound strategize on which state to register their LLC out of the rest and takes in factors like cost, ease of compliant, and approval rates for bank accounts.
- All legal formation documents once and for all prepared and filed and then an approval was granted without unnecessary delays.
- A reliable registered agent was appointed to make sure the company meets all the legal requirements for U.S. state regulations.
- The company documents and the LLC Official Certificate of Formation along with the rest of the client documents were sent to the client.
2. Application for EIN
- For the company, we filled out and submitted IRS Form SS-4 and made sure all the information was in synch with the documents used to register the LLC.
- Because the owners were foreign nationals. we processed the additional documentation requirements (such as identity verification).
- Since Five OutBound can operate, hire, and pay US taxes, they were successfully issued the EIN.
3. Opening a US bank account
- We used our affiliations and fillings with other banks and influencer techniques to help ease the process.
- We walked the client through the KYC procedures and notarizations and identity checks, and achieved all “compliance” objectives.
- In a few weeks, Five Outbound had a fully functional US business checking account capable of receiving payments in USD directly from the client.
4. Stripe account approval
- With the LLC, EIN, and US bank account, we then moved to apply for a Stripe account.
- We made sure all documents, like the LLC registration, EIN and bank paperwork, were aligned as best as possible. This is an important step, even small discrepancies like the company name or address can cause a denial.
- We supported them with Stripe’s verification x requests did compliance check as well.
- The account was successfully approved, and Five Outbound could now also receive credit card payments from clients within the USA and overseas.
Along with the account came certain expectations. Five Outbound was to pay due fees on time and in full. Five Outbound was also liable for accounting and financial reporting compliance within the Stripe system.
Timeline & Milestones
- Weeks one and two. Planning, consultation and LLC formation were all completed at the end of week 2.
- Week three. The application for an EIN was approved after submission.
- Weeks four and five. Account opened after KYC compliance checks.
- Week six. Stripe account approved and company’s financial setup integrated.
A process which would normally take months of processing and repetitive attempts, was successfully completed in a few weeks due to the step-by-step ensured and organized framework.
Results & Benefits
Upon completion of the requirements, Five OutBound was able to achieve:
1. U.S Legal Entity (LLC)
Gained full access to the U.S. market with an established reputable legal business framework which facilitates trust with American clients.
2. EIN (Tax Identity Number)
Gained access to U.S legal tax identity enabling smooth processing of tax returns to the IRS.
3. U.S. Business Bank Account
Gained direct access to American Financial system which eases client payments, and enhances financial management.
4. With Stripe, Five Outbound has
the ability to instantly approve payments with real-time wiring to U.S. Bank accounts.
5. Better Brand Image
With an established presence in the U.S. Five Outbound was able to gain more clients easily, thus strengthening the company’s credibility and business opportunities.
6. Growth Opportunities
Having completed these initial steps, the company is now able to grow rapidly in the U.S market.
Key Takeaways & Best Practices
- Select the appropriate state: Not all American states are the same for foreign-owned LLCs. Choosing the appropriate state can save time and resources.
- Maintain uniform documentation: Bank and Stripe approvals require legal document approvals with no discrepancies, or else there will be delays.
- Be Ready for IRS Compliance: Rest assured, IRS will always ask for additional documents. Prepare to submit supporting documentation, which will save time.
- Collaborate with professionals: DIY strategies run the risk of rejection or simply wasted time. Expert help guarantees smoother approvals.
Client Testimonials
Conclusion
For overseas businesses, moving into the U.S can feel like a herculean task. However, with the right partner, the whole process can feel easy, streamlined, and completely stress-free.
Setting up a LLC, applying for an EIN, opening a bank account, and even integrating payment systems don’t have to mean hours of painstaking work.
We at Bizstartz help entrepreneurs like Five OutBound from overseas take advantage of the U.S. market. We help them expand their business globally.
👉 Advance your expansion and get in touch with Bizstartz to get your process started.
