Next Steps after Registering your own US Company as a Foreigner

This post is a follow up of  Starting your own US Company as a Foreigner. It explains what needs to be done once you have successfully registered your company. It focuses on US Corporations created by foreigners, although some things also apply to LLCs.

Checklist: You should have now in your hands:

  • Certificate of Incorporation (it may have different names in different states) signed by your incorporator (i.e., the person who registered the company for you)
  • Statement of Incorporator in which the incorporator name you as the owner of the corporation and terminates her/his powers. 

Right After Incorporation

After incorporation, the incorporators or first directors are required to call an organizational meeting of the directors. The purpose of this first meeting is to organize the corporation by adopting a number of resolutions that will allow the corporation to conduct its activities.

Gotcha: After registering your corporation, you will have to hold an organizational meeting of the initial shareholders and directors. It is important to observe these formalities and take corporate minutes of the required meetings. Failure to follow these formalities can place your corporate status in jeopardy.

Recommendation: Orrick offers here a great collection of documents and forms. Taking a look at the template minutes for the organizational meeting can serve you as a script of what needs to be done. These are the typical resolutions adopted in an organizational meeting (in bold the documents that you have to prepare for this meeting):
  • Election of officers: decide who will be president, secretary, treasurer, and possibly others
  • Ratify and adopt acts taken by the incorporator
  • Choose fiscal year
  • Aprove the Shareholders Agreement
  • Authorize the execution of the Common Stock Purchase Agreement
  • Authorize the obtention of any license and permit needed to run the business
  • Authorize a Banking Resolution to open a bank account

Vesting of Founders' Stock

A necessary ingredient to create a startup with a co-founder is trust. I mean, you wouldn't start a business with a partner you don't trust, right? So, when you start a business it is normal to be optimistic about the relationship with your partners.

Gotcha: Time may and will put your partnership on test in may occasions.

  • Write down a good Shareholders Agreement that foresees many of the problems which may arise during the life of your startup
  • Specify a vesting schedule for founders' stock in your Common Stock Purchase Agreement
What is this vesting schedule? It means that instead of the founders getting all their shares of common stock on Day 1, the founders get a proportional amount of the stock they are entitled for after each month of work at the startup, during a pre-scheduled period of time. So, if a founder leaves a startup after the first year, she gets only a proportional percentage of her stock, the rest goes back to the corporation. 

Here you can read more about why vesting is considered a must in startups, here you can see how the legal text looks like, and here (Clause 10 on page 8) you have a sample Common Stock Purchase Agreement where you can fill in the details of the vesting schedule you'd like to have in your startup. 

Filing your Section 83(B) Election with the IRS

US residents have to file the election within 30  days of the stock purchase date. Failing to make a timely 83(b) election with the IRS is something that could lead to disastrous tax consequences for a startup founder or employee, as it is explained here or here.  

Gotcha: For US foreigners things are different than for US residents.

Recommendation: As it is explained in this Quora answer, foreigners don't need to file an 83(b) election since they are not liable for US taxes. However, if you think you may move and live in the US in the near future, then you should follow these steps:
  • Fill in the election putting "Applied for" in the field where the 83(b) election asks for the SNN/Taxpayer Identification Number (TIN)
  • File the 83(b) election for every foreign founder within 30-days of the equity/options grant. One possibility is to send it by certified mail to (see last page of the instructions for form 1040):
Department of the Treasury, Internal Revenue Service Center, Austin, TX 73301-0215 USA
  • If you move to the US within the vesting period of your shares, when you apply for your SSN/TIN you should attach a copy of the election.

Salaries vs. Dividends

You can pay the founders a salary or not. If you don't and you have a C Corporation you can distribute dividends to the shareholders. They will be taxed in your country as normal income. 

Gotcha: If you decide to pay yourself a salary things get more difficult: you'll probably have to register yourself in your country as a freelance who provides services (in this case to a US corporation) and pay the corresponding social security (or national health service). 

Of course, you can have both, salaries and dividends, since they are not incompatible.

Recommendation: Distribute dividends, do not pay yourself a salary.

What Next?

Now that you have the legal structure of your company up and running the only task that remain is to become profitable. So, how should you manage your business in order to maximize the chances of being profitable?

Gotcha: Startups are not smaller versions of big companies.

Recommendation: Do not follow advice or training tailored for large corporations, like the kind you get on an MBA. Instead, read about the Customer Development Process from Steve Blank, the Lean Startup from Eric Ries, and the Business Model Generation from Alexander Osterwalder.

If you want to dissolve (close) your company, you can take a look at the procedure explained in this post.

Gotcha: If you don't have a US bank account you won't be able to pay Delaware taxes, as explained in this post.

Recommendation: Have someone in the US or in Canada send an International Money Order to Delaware for you. Learn more about this here.

The Online Course

Due to the large number of people interested about this subject, I have created an online course that teaches you how to easily create (and dissolve) a US business from the comfort of your home, be it in the US or elsewhere, avoiding expensive legal fees.

The course contains 37 lectures with videos, instructions, quizzes and checklists to help you navigate through the process of setting up your US company, avoiding common pitfalls inexperienced entrepreneurs usually fall into. You will also find templates for all the necessary legal documents, which you can freely download and use right away.

As a special thank to my blog readers, I've created 100 coupons to access this course with a 50% discount. Click on the link below to redeem your discount code before I run out of invitations!

For an in-depth understanding of how to form your business in the US I recommend you this book by Constance E. Bagley.

Enjoy creating your US company!


  1. very interesting, nice article..
    keep posting such stuffs :)

  2. Hey, nice site you have here! Keep up the excellent work!

    How to Start a Company in India

  3. Thanks a lot for publishing the new good stuff for us. I’ll really get the great advantage from your good stuff.
    resource search company

  4. Great details here, better yet to discover out your blog which is fantastic. Nicely done!!!
    ichitect - online business magazine

  5. Being from the UK I have been interested in expanding maybe to the USA and other areas, this website in particular is doing ok, the gadget sector is booming in this age of technology so I will continue to look into it. It's all a bit scary though!

  6. Hi. Where can we find details about opening a business bank account after incorporating a Delaware c-corp? Why is it so difficult? Please help. Thanks!