open business in MI

[u_liv_1_x]

Hello all,

I have an export company in Canada, but most of my vendors are in the US!

I started the process to register a US based company, for two reasons:

1-Due to the ever increasing complexity of United States export regulations,
some US vendors refuse to sell to any business outside the US, even if I'm asking them to ship within the US!
2-it is getting harder for me to ship stuff out of the USA on my name because I don't have EIN, and not being a US company.

I'm starting a US company in Michigan as a Canadian. And will operate the business from Canada, as almost all of my business is done over the phone, Emails and bank transfers, so basically no need for me to be personally in the US on a daily basis except when I need to go to the Bank or ship some rush orders by courier!

I understand it is legal to start a US business as a Canadian, so no problem on the IRS side, as long every thing is done right and taxes paid and filled right. But it gets touchy when it comes to Immigration!

is there any kind of VISA for such thing?
is it okay to say on the border I'm going to the bank or going to ship something because I own a company here? will that get me in trouble opposed to going shopping excuse?

Mar

[nishant]

If you are not US citizen or green card holder, you cannot do business and earn income while on US soil without a visa.

You can start a canadian company and open its subsidiary in US.

[u_liv_1_x]

thank you nishant!
But I'm not earning income in the US!
I'm earning the income in Canada and use the US company for only placing orders and exporting goods!

[nishant]

You cannot start a company incorporated in US if you donot have a visa.

Read through details of E visa if you have sufficient funds under investor category.

[Steven]

What you're doing sounds legal to me on B-1, however bang "B-1 entry" and "B-1 NAFTA" into a search engine and check the regulations and it will tell you exactly what you can and cannot do as a business visitor. However, responding to orders and taking orders is allowed as B-1.

The real problem is that you have to use a C-corp as a non-resident, make it a wholly-owned subsidary of your Canadian corp and try not to create a profit in the US, transfer the money to Canada as US corporation taxes are higher than ours, especially compared to the CCPC rate.

Bear in mind you don't actually need to create a US corporation either, you can simply register your Canadian corp. (or business) in the US and get an EIN that way. Remember to file an 1120-F (or 1040NR) and Form 8833 every year. You can have a US address for your Canadian corp. for business purposes, not sure what your vendors will think but on paper to them it will appear to be US-based as it has an EIN and a US address.

However hiding your US profits using a transfer won't work this way because there's only one corp, so everything goes on the 1120-F and you have to pay US corporation taxes.

Depends on how your business works, e.g. if you have no profit because your salary is high enough, or if you have little profit for the same reason the corporation tax isn't too bad.

Basically if it's a small business it's simpler from a paperwork standpoint to register your business in the US, if it gets too big (above the CCPC rate or you have too much income to take it all as salary) then it makes sense to create a C-corp in the US, but that will create more paperwork.