Starting an e-commerce business in the U.S. is an exciting venture, and it’s one that you can embark on regardless of where you currently reside. Whether you are in Europe, Australia, Asia, the Middle East, Africa, or even within North America, this article is designed to guide you through the essential steps to legally establish your U.S.-based e-commerce startup. Here’s a checklist of the key actions you need to take, all of which can be done online from anywhere in the world.
1. Registering a U.S. Company
The first step in legally establishing your e-commerce business in the U.S. is to choose and register your business structure. In the U.S., you have several options, including Sole Proprietorship, Partnership, LLC (Limited Liability Company), S-Corp, C-Corp, or Corporation.
For e-commerce startups, especially those founded by non-U.S. residents, we recommend registering as an LLC. LLCs provide flexibility, limited liability protection, and are relatively easy to manage.
Choosing the Right State: Business registration in the U.S. happens at the state level. The state you choose to register in can impact your taxes, fees, and regulatory obligations. Here’s a quick recommendation:
- For U.S. resident LLCs: Consider South Dakota, Wyoming, or Alaska.
- For non-resident LLCs: Consider New Mexico, Ohio, or Arizona.
You can easily register your LLC in any state using online services like Bizee, which offer quick, efficient, and affordable registration.
2. Registering a DBA (Optional)
A “Doing Business As” (DBA) name is necessary if you intend to operate your business under a name different from the one registered with your LLC. Some states require a DBA registration, depending on where your LLC is registered.
A DBA allows you to market your business under a different name while maintaining the legal protections of your LLC. You can check whether your state requires a DBA and how to register it by referring to state-specific guidelines available in this Article.
3. Obtaining a U.S. ITIN (for Non-U.S. Resident Founders)
If you’re a non-U.S. resident, you will need an Individual Taxpayer Identification Number (ITIN) to comply with U.S. tax regulations. The ITIN is used by the IRS to monitor tax payments from individuals who do not qualify for a Social Security Number (SSN).
Having an ITIN also provides additional benefits, such as the ability to open a traditional U.S. bank account and access U.S.-reserved e-commerce platforms like TikTok Shop. For detailed guidance on obtaining an ITIN, refer to our comprehensive Article.
4. Getting a Sales Permit
Depending on the state where you register your LLC, you may need to obtain a sales permit. This permit allows you to collect sales tax from customers and remit it to the state. Additionally, it exempts you from paying sales tax on purchases from suppliers within the state.
For e-commerce businesses, it’s generally advisable to obtain a sales permit in the state where your LLC is registered. This ensures compliance with sales tax requirements and provides certain tax benefits. You can find state-specific sales permit requirements in this Article.
5. Getting a Reseller Certificate
A reseller certificate allows you to purchase goods for resale without paying sales tax to your suppliers. This is particularly important if your business model involves dropshipping, where you might need products delivered directly to customers across various states.
To obtain a reseller certificate, you’ll need to first register for a sales permit in your LLC’s state. Once you have your sales permit, you can apply for a reseller certificate using the SST Certificate of Exemption or MTC Uniform Sales & Use Tax Resale Certificate forms, which cover multiple states. However, note that some states (e.g., California, Florida, and Washington) do not accept out-of-state seller IDs, requiring you to obtain state-specific permits.
6. Getting a Business License (If Applicable)
Whether or not you need a business license depends on the industry you’re entering. While most product categories don’t require additional licensing, businesses in regulated industries, such as food or pharmaceuticals, will need to secure specific licenses or approvals (e.g., from the FDA). To determine the specific requirements for your industry, a simple Google search based on your product category can provide the necessary guidance.
7. Opening a U.S. Bank Account
You can open a U.S. bank account online, even if you do not reside in the U.S. Services like Wise make it easy to manage your finances and receive payments from U.S. customers.
8. Getting a U.S. Business Phone Number
A U.S. business phone number with interactive voice response (IVR) features can help you maintain professional communication with customers and partners. We recommend using Sonetel for an affordable and efficient U.S. business phone number.
9. Getting a U.S. Business Address
A U.S. business address is essential for receiving business correspondence, especially if you’re setting up accounts on platforms like Google My Business or Amazon Seller Central, which require a U.S. address for verification.
While services like Bizee provide a basic address for LLC registration, you may need a more comprehensive virtual office solution for broader business needs. Consider using Opus Virtual Office for a professional U.S. business address.
Conclusion
Establishing a U.S. e-commerce business involves several key legal steps, but with the right guidance and resources, it’s entirely possible to complete these tasks online from anywhere in the world. By following this checklist, you’ll ensure that your startup is legally compliant and set up for success in the U.S. market.
