Many foreigners that emigrate to the United States want to start a business, either because they ran a business back home or they want a fresh start in their new country. Many decide not to even try because they think it is required to have a social security number to do so.
Thankfully, it is very possible for foreigners to run a successful business in the United States. The first step to start your business is submitting an ITIN application.
A substitute for an SSN?
An ITIN is an “Individual Taxpayer Identification Number”, which must be used by foreign nationals that don’t have nor can apply for a social security number. More importantly, an ITIN allows foreign nationals to create business entities, earn income, receive necessary business licensing and pay taxes.
In order to get an ITIN, you must go through the IRS (Internal Revenue Service).
Making an ITIN Application is as easy as 1-2-3
Just like a social security number, there are a number of steps you must go through to get an ITIN:
- Fill out Form W-7– This form is what you will fill out to request an ITIN. As with any other forms, you simply need to fill out the required information and attach required documentation depending on your specific circumstances.
- Submit your tax return– You must submit a tax return when applying for an ITIN. This can be tricky, as you actually need to fill out your Form W-7 in order to file your taxes. However, if you know that you want to apply for an ITIN, you can fill out your Form W-7 and file for your taxes at the same time.
- Verify Your Identity– The IRS will want to check that you are who you say you are before issuing you an ITIN. You can do this by submitting a copy of your driver’s license from the U.S. or your home country, a passport, visa or a foreign military card.
Once you submit Form W-7 and the required tax return and identity verification documents to the IRS, you simply have to wait for your ITIN to be processed.
My business just opened, what do I do now?
Once you finally open your business, you are going to eventually want to expand in some capacity. There are many ways to go about this, but unless your business is turning a hefty profit, it is going to be hard to expand your business without a little bit of outside help.
That is where a business loan comes in.
You can apply for a business loan at many different places including banks, the federal government, and even private organizations. Of course, a business loan should not be taken lightly, and there are a number of pros and cons that you should consider as a business owner:
+ While lenders may have conditions and requirements on obtaining a loan, you as the business owner ultimately have the final decision on how to operate your business and use the funds.
+ Business loans tend to have lower interest rates than credit cards and other financial options.
+ The interest payments on your business loan are tax deductible.
– Many business loans require a large amount of information from businesses including their modus operandi, tax returns, information about your predicted costs and profits, etc.
– Business loans require a look into your business’s credit score, which may affect your credit rating.
– Most business loan lenders require a form of collateral in case you do not pay off your loans, usually assets that can be liquidated quickly like cash or bonds. This can make it more expensive initially.
Do you have a business in the U.S. or are you thinking of starting one?
Well, now you know how to do so, so don’t let the lack of a social security number stop you from making your business dreams a reality.