Many Nigerians are go-getters and business-oriented people. Their watchword is growth, and they utilise every possible means to grow and challenge the status quo. The world is not even ready for what Nigerians are cooking.
Nigerian business owners are taking advantage of the country. They are spreading their wings and flying high across Nigeria to establish businesses in other countries, including the United States.
Registering their businesses in the US gives them an edge over their competitors and allows them to expand their audience, connect with investors, and grow.
If you are a business owner looking to grow beyond the shore of Nigeria, keep reading to learn more.
Registering a US Business from Nigeria
Desire growth is a good thing; that is why I have researched and created a step-by-step guide on registering a business in the US from Nigeria below.
Understand the Business Requirements of the US
As a business owner in Nigeria, the business requirements in the US might differ from those of Nigeria, so you must understand them to avoid mistakes. As a foreigner wanting to establish a US business, you need a Registered Agent.
A registered agent is an individual or a company that will be your company’s official point of contact in the state to receive service of process, legal documents, and official communications from the state and forward these documents and communications to your company.
Different organizations offer registered agent services, so look for the one that offers the right services.
Choose a Business Structure
Your business structure will influence various business details, including operational flexibility, liability, and taxation, so you must choose it carefully.
The two main business structure options for startups and small businesses are limited liability companies and C – Corporations.
You don’t have to choose your business structure alone; you can consult with a legal professional or business advisor to know the most suitable structure for your business.
If you choose to run an LLC, you cannot issue stock. So, if you are planning to offer equity to investors, employees, advisors, or other stakeholders, you’ll need to reconsider.
If you choose C-Corp, your company’s ownership will be allocated through stocks (equity). If you want to run a business that issues stock to employees, investors, and other stakeholders, you should choose C-corp.
Choose a Business Name and Check Availability
The next step is to choose a business name. This step might seem simple, but it is not because you cannot select any name.
You have to select a short, memorable name that reflects your brand identity.
When you come up with a name, the next step is to conduct a thorough search to ensure that no other company has that name.
This is important because state law requires that a new business cannot choose a name that is the same as an existing business. Also, a different name is good for brand differentiation.
You can search some databases to see if any other company has the same business name as the one you are considering.
You can check through the United States Patent and Trademark Office (USPTO), Trademark Electronic Search System (TESS), ICANN Domain Name Registration Data Lookup, or the Office of the Secretary of State.
Select a State for Your Business
Unlike many other countries, business registration happens at the state level in the US. This means your business registration is with a specific state’s government, not the US government. States in the US have varying laws regarding taxes, compliance, privacy, and other matters, even though you can form an LLC or C-Corp in any state. Go for a state that has the best offer. For example, Delaware has no state or local sales taxes to worry about. However, businesses are subject to an annual business license requirement and a gross receipts tax, which applies to goods sellers and service providers. Visit their website for more information on how to register a business in the State of Delaware.
Register your Business with the State
After choosing the state where you want to establish your business, you must register it with the state.
The registration process involves filling out forms and paying the necessary fees. This registration process will require you to have a registered agent because registration procedures differ from state to state. The forms you will fill out will require information about your business, so you have to be careful to provide accurate information.
After that, you will be required to pay registration fees, which depend on the state and type of business your business is in.
After everything, you must wait for the state government’s approval before proceeding to the next level. For example, the State of Delaware usually approves business formation documents within 3–5 business days. You can request 24-hour express approval for an extra fee.
Obtain an Employer Identification Number (EIN)
After business registration, you must obtain an employer identification number, which the Internal Revenue Service issues.
The US IRS uses these Identification Numbers to identify and separate your business for tax purposes.
You can apply for EIN online on the IRS website if you have a Social Security Number or Individual Taxpayer Identification Number. The application for this identification number is free.
You can apply for this with the help of a registered agent.
Obtain the Necessary Licenses and Permits
Before launching your business in the US, you need to obtain the necessary permits and licenses, which depend on your business activities.
You may need federal, state, or local government licenses and permits.
Some of the permits and licenses to acquire are professional licenses, health permits, and sales tax permits.
Register for State Taxes
To establish your business in any state in the US, you need to register for taxes from the state. The taxes include sales, payroll, income, and other applicable taxes. These taxes all depend on the activities of your business and the state requirements.
It is advisable to consult a tax professional specializing in international taxation to help you navigate the registration process.
Comply with Employment Laws
You need to know and comply with the US employment laws to avoid problems and operate your business successfully.
You will be required to pay unemployment insurance taxes, obtain workers’ compensation insurance, and abide by overtime and minimum wage rules.
Depending on the number of your employees, you will need to provide healthcare to your employees according to the Affordable Care Act.
Open a US Business Bank Account
After registering your business, the next thing is to open a US business bank account. This account will help you manage your financial transactions.
You will need to contact reputable banks and compare their services, requirements, and fees so that you can choose the one that is best for you.
Also, if you won’t be physically present, you may need the help of a registered agent for the registration process.
Benefits of Registering a Business in the US from Nigeria
There are many benefits of registering your business in the US from Nigeria; some of them are listed below.
Opening an American Bank Account
When you register your business in the US, you can open an American bank account. This account will help you transact business in a different currency, and volatile exchange rates will not affect your account balances.
Getting Funding from US-based Investors
Registering your business in the US will grant you access to meet with US-based investors who will be willing to invest in your business.
Making and Receiving International Payments with Ease
When you register your business in the US, you will be able to make and receive international payments easily without any third party. This will cut down on third-party fees during transactions.
Helps in Immigration
Registering your business will grant you access to different types of visas that can help you migrate without many obstacles. If you are considering migrating to the US, starting a business there will make the job easier.
Access to the World’s Largest and most Diverse Customer Base
Registering your business in the United States gives you access to a wide range of customers.
Tax Benefits
Depending on your business module, you will have the opportunity to access certain federal tax incentives.
Get Access to Creator Programs
When you register your business in the United States, you will have many opportunities awaiting you. You will benefit from US-only programs and resources, such as startup accelerator programs that provide funding, networking events, mentorship, and more.
The Bottom Line
Venturing into the US business landscape from Nigeria opens doors to immense growth opportunities. From navigating legal structures to embracing diverse markets, this guide equips you with the know-how. Embrace the journey, adhere to regulations, and watch your business soar across borders.
