Overview of forming an e-commerce company in Usa
Establishing an E-Commerce Company in America has become a trend that has gained a lot of attention in recent years. E-commerce, which has become a golden bracelet and source of additional income especially for young entrepreneurs, has become a widely used business line both at home and abroad. Establishing an e-commerce company in America is much easier, faster and cheaper than in Turkey. Moreover, after establishing the company, the subsequent process is not complicated at all.
By the way, before these transactions, you should decide for what purpose you will form an e-commerce company in Usa, that is a separate issue, but generally an e-commerce company is formed in Usa for the following purposes.
- It is very popular to sell other people's products and have them shipped to suppliers in the USA or anywhere in the world through dropshipping. You can form an e-commerce company in Usa to sell products by exhibiting and promoting other people's products from your own e-commerce site.
- With Amazon FBA, you can send the products you supply in bulk to Amazon warehouses in the USA and sell them all over the world via Amazon. For this, you can form an e-commerce company in Usa.
- You can sell your own products to other countries.
- Selling digital products or services
- For software or SAAS projects
You may want to form an e-commerce company in Usa for this and all such operations. In fact, our topic here is how and which paths to follow rather than why to form an llc. If you have decided what you will do and made your preparations, we can start forming an e-commerce company in Usa step by step.
To form an e-commerce business in Usa, you will first need to form an LLC company in Usa. The subsequent needs and process order are as follows;
- Start a Remote Online Company in Usa
- Get EIN Number (This is the tax number of your company formed in Usa)
- Open a Remote Bank Account in Usa
- Connect a Virtual POS to Your E-commerce Site (Opening a Stripe Account)
If you are going to do Amazon FBA, you can skip point 4 because since the products are sold on Amazon, there is no need to have your own e-commerce site, so there is no need for a virtual POS system. We will continue the steps as if we were doing e-commerce without skipping this stage.
Now let's consider these 4 items step by step.
Forming a Remote Online Company in Usa
I have stated this many times, but let me state it again for this article: If you are not an Usan citizen, you cannot apply directly when setting up your company. For this, you get service from an intermediary agency and do the installation through them. These intermediary agencies are called Registered Agents. Additionally, after forming the company, you need to continue your membership with these agencies every year.
Before registering with the agency for installation, we need to decide in which state in Usa we will form our company and what the name of the company will be. I will soon offer you a few alternatives along with their prices as to which agency you should choose, but first you need to choose the state where your company will be formed.
Which state should I choose to form an e-commerce company in Usa?
As it is known, there are 50 states in Usa and they all have different characteristics and laws in order to do business commercially. These criteria are endless, but the parts that concern us are the fee we will pay to the state during company formment (this fee is referred to as the filing fee), the general fee that must be paid to the state annually (this is also called franchise tax) and taxation according to the type of company. These are the most important features.
If you expect the e-commerce company you will form in Usa to become a big brand in the future, you can consider the states of Delaware or Nevada. However, if you choose these states, be aware that your initial installation and annual costs will be higher than the alternative states I will mention shortly.
I don't have the ambition to be a very big brand, if you think that just forming an e-commerce company in Usa is enough for me, states such as Kentucky, Wyoming or New Mexico are just for you. Because the initial setup fees and annual expenses of these states are much lower than the Delaware - Nevada duo.
In the table below, you can see the installation and annual franchise tax fees of a few states as of 2021.
| STATES | INSTALLATION FEE (ONE TIME) | FRANCHISE TAX (EVERY YEAR) |
| Delaware | 90$ | 300$ |
| Florida | 125$ | 139$ |
| New Mexico | 50$ | $0 (No Annual Fee) |
| wyoming | 100$ | 52$ |
| Kentucky (Most Eligible) | 40$ | 15$ |
As you can see, Kentucky, Wyoming and New Mexico are very low-cost states to start an e-commerce company in Usa.
If your company will be an LLC company and you do not have a partner (single owner), you will have serious advantages regarding taxation. Again, we go through this option and choose the option of forming a single-owner LLC company and select the state of installation as Kentucky. If you are going to form a Corp company instead of a single owner LLC, then things change and you will have to file taxes every month, keep meeting minutes, etc. transactions required. It is also essential that you contract with an accounting firm in the USA for these statements. Our topic is to form an e-commerce company in Usa, and we continue by assuming that this company is a single-owner LLC initiative.
Choose an agency to start an e-commerce company in Usa
When choosing an agency, remember that they all have different price policies and additional features. If you are wondering what a Registered Agent is and what it does, you can take a look at this article in a separate window .
Actually, you have many options, but the most cost-effective and reliable ones are;
You can choose one of these, or if you want to find a different agency, the choice is up to you.
These sites are in English. If you have a language problem, you can complete your registration in approximately 5 minutes by using the translation button on Google Chrome. You can benefit from the step-by-step guide on how to form an llc online, on a separate page, by using these agencies from the links below (currently, only two agencies have promotional guides, but the steps on almost every agency's website are the same).
Establishing a Company in America with Northwest (A guide prepared for New Mexico, but you can choose Kentucky as the first step, all other steps are the same)
Establishing a Company in America with Inc Authority (A guide in which I explain the steps of establishing a company for the state of Kentucky with the IncAuthority agency)
You can establish your company online by using the above guides. In these guides, the installation steps to obtain the EIN number through the agency were explained, but then to Obtaining an EIN Number from America . If you obtain an EIN yourself, your costs will be much lower.
Get EIN Number
EIN is the abbreviation of Employer Identification Number and can be translated into Turkish as "Federal Employer Identification Number" or "Federal Tax Identification Number". The EIN is issued by the IRS. IRS is the National Tax Office of the USA and is the authorized institution for all tax-related transactions.
An EIN is like a tax identification number for your business (LLC). The IRS will use this nine-digit number to identify your business in tax purposes. required when opening bank account in the US A business that does not have this number cannot open a bank account. In addition, payment gateways such as Stripe
In short, after forming an LLC company in the USA, you cannot do anything without this number. That's why it's essential to request this number from the IRS.
You can also add the EIN number to the setup package of the agency you choose when establishing a company, but they will charge you an extra fee for this. This means an additional cost of between $50 and $200 on average. If you don't want to deal with it and say you have the budget for it, you can add it during the installation phase, but you can also choose the I can get it for free option. For this, Getting an EIN Number from America, where I explained the process of getting an EIN for free.
Without EIN, you cannot open a bank account or get a virtual POS in the USA. In addition, if you do not have an EIN number, your commercial activity will be restricted. In short, an EIN is required to form an e-commerce company in Usa.
Open a Remote Bank Account in Usa
The biggest obstacle you encounter after forming an llc is usually the process of opening a bank account in Usa and transferring the money to your country. To which bank is the earned money transferred? How to transfer money? What will it cost me? Many such questions and problems are inevitable.
Banks do their best to make things easier for companies, but they require you to visit the country in order to open a bank account for an llc you formed abroad, such as the United States. In this case, entrepreneurs get disappointed and give up their ventures.
Opening a bank account in Usa remotely online was relatively easier at first, but as Dropshipping and Amazon FBA became popular all over the world, there was a lot of demand. At the same time, it has become very difficult to open a bank account in Usa remotely, due to problems such as abuse of status.
Until Mercury Bank stepped in!
Once you receive your EIN number, you can open a business account remotely at Mercury Bank. The account you open will ensure your money flow in Usa. When you start trading after forming an e-commerce company in Usa, you need to work with a bank. For this reason, the easiest bank where you can open an account remotely is Mercury Bank.
After forming an e-commerce company in Usa and receiving your EIN number, you can now easily open your bank account online. You don't need to go to Usa for this.
So, how will you open a bank account after forming an e-commerce company in Usa and receiving an EIN?
Just a few registration screens and after providing the requested information your account will be opened shortly. Just take a look at my article titled Opening a Bank Account in America Moreover, Mercury Bank does not even require a passport from you, the registration steps are very easy and opening an account with this bank is free. In addition, they do not ask you to keep money in your account as collateral. The purpose of establishing the bank is to serve entirely foreign entrepreneurs.
Connect a Virtual POS to Your E-commerce Site
After forming an e-commerce company in Usa, obtaining an EIN and opening a bank account, there is only one task left, and that is to connect a virtual POS to your e-commerce site. All startups that want to do e-commerce abroad need a payment solution like Stripe. Stripe is a virtual POS provider that is accepted all over the world and is suitable for all e-commerce infrastructures. Under normal circumstances, the countries that Stripe supports are limited and unfortunately Türkiye is not among these countries. However, if you have an llc, EIN number and bank account in the USA, there is no obstacle to opening a Stripe account and getting a virtual POS.
Before opening your Stripe account, you must set up your e-commerce site and complete and prepare all its pages and product-service entries. In fact, you need to complete your e-commerce site before opening a bank account, because the content of your website must comply with bank policies in order for your bank account to be approved.
To summarize, for virtual POS and bank accounts, your E-Commerce site must be full of products and services and must be working.
Once you complete these requirements, you can apply for Stripe. Stripe is a free virtual POS provider. When we say free, they only deduct a certain commission per sale, other than that, they do not charge you a monthly subscription fee or fixed fee. Stripe is a very reliable company and is compatible with almost all platforms such as Woocommerce, Magento, Opencart, and Shopify. It has a plugin or API key compatible with every platform.
To open a Stripe account, you need to register online. If you don't know how to do this, Opening a Verified Stripe Account . After following the steps, you will now have a confirmed and verified Stripe (Virtual Pos) account. In this way, you will be able to receive payments on stripe via your e-commerce site and transfer them to Mercury Bank from there whenever you want.
Conclusion
This is the process of forming an e-commerce company in Usa, which I believe will be long but also enjoyable for you. If you follow the steps on this website and go step by step, you will now be able to sell your products or services to more than 200 countries in the world, without any questions. Since you will do this through the e-commerce company you formed in Usa, you will be free from procedures and unnecessary bureaucracies.
Finally, you may have many questions about taxation; as I mentioned at the beginning of the article, there is a separate article for this. Taxation in America will answer all the questions in your mind. Do not worry too much about the tax issue. In the USA, single-owner LLC companies are considered only as individuals and you do not have any problems with taxes. Your business will be small in the beginning so there is no problem. I wish you could reach a certain turnover (I hope you can do more) and pay taxes :)
I hope you liked my article on setting up an e-commerce company in Usa. If you have the opportunity, I would be grateful if you could help me spread the word to more audiences by sharing my article. You can ask any questions you may have in the comments section below.
I wish you good luck.
36 Comments . New Comment
Hello, I have a friend who does not have Usan citizenship. He has an e-commerce company there. Can he hire me as an employee?
If you cannot get it because you do not have citizenship, you can ask a financial advisor about this issue.
Hello, I will form an llc in the state of Delaware in the USA. It will be a single-partner company and I will not operate within the USA, that is, I will not have any business within the USA. I am not an Usan citizen and I am not going. In short, I have no connections. According to the sources I have received information from, I will not be asked for tax. As long as I do not sell to the USA, I will only pay an annual fee of 300 dollars and I will form it. I will pay a low amount to the agent for the address and the authorized representative. Apart from that, there will be no income tax, VAT etc. Is this true? I hope you have a good day, thank you in advance for your answer.
When opening an llc with Northwest, if I open the type as Nonprofit Corporation, what will be the difference from LLC? Can I get an EIN number?
Non-profit is formed for the purpose of operating non-profit organizations such as charities and associations formed in the USA. With this type of company, you can only run a charity organization in the USA, you cannot do e-commerce remotely. You probably may not be able to get an eIN even if you do not have US citizenship.
I think we need SSN to fill out Form 1040-NR. How do we get SSN?
1. If you do not have 1040 Nr information, you cannot fill it out. You will need to get services from a cpa.
2. No SSN required. If you have an itin, the itin number is entered, otherwise the CPA can apply with a temporary itin.
3. SSN is given only to people with US citizenship. Cannot be obtained by application
Thank you, Mr. Nazmi, I had one more question. Does the federal income tax payment situation occur when the Reconomic nexus is formed in at least 1 state, or when?
Yes, it occurs when the economic nexus is triggered. Otherwise, since your earnings do not originate from the USA, only filling out form 5472 is sufficient.
Hello,
thank you for a very useful article.
What I'm wondering is, after establishing a company in America, we need to get a bank account, but I have a Benk of America individual bank account. If I establish the company on my own, is it still necessary to open a company account or is an individual bank account valid?
Hello,
It matters what you will use the company for. If you will be receiving payments individually, you can use an individual account, but if you will be collecting payment from a credit card payment network such as Stripe, Stripe may ask you for an llc bank account in the future.
Don't worry too much about the bank account issue. Mercurybank now gives approval on the same day and accounts are opened free of charge. Additionally, an ATM card belonging to your company is sent to your address free of charge.
If you are going to do e-commerce professionally in the global market, we strongly recommend that you open a Mercurybank account in your company's name.
Hello, let's say we opened an account at Mercury Bank, and they will send a bank card, it will probably come to my virtual mail address and I think they will send it to me? really?
Hello,
No you do not have to get your virtual US address. When opening an account, you can request your card to your real address. This means you can select the shipping option to your Türkiye residence address. If you choose this way, your card will reach you by mail within 2 weeks, free of charge.
Do not choose your Usan company address. If you choose, the card will go to the Usan address (what you call the virtual address) and you will have to pay an extra fee to the address company to receive it. There is no need for this.
Hello, I have a residence and work permit in the USA, I have a green card. Do all the processes you mentioned need to be applied to me, such as an EIN number, because I have an SSN? If the process is not the same, can you explain it briefly for us, thank you in advance.
If you have an SSN, you can get an EIN from the IRS website within 15 minutes after forming your LLC company.
Since you have an SSN, you have the privilege of opening a Paypal account and easily registering on many platforms.
However, since you have a green card, the income you earn from the LLC will be reflected directly to you and you will have to pay some taxes at this stage, without question. There is a lot of information on the IRS website for your situation, it would be in your best interest to research it.
Hello… I read some of your posts. All valuable information... I want to sell a service, not a product, in Usa. Web design and software and creative advertising agency service... It is in an official structure with a virtual office address and tax liability... But I want to manage it remotely without being physically present in Usa. Therefore, I will have a website that explains in clear terms what I do and how I do it. If we reach an agreement for the project with the customers who contact me through my website, I plan to start the business with a legal contract (according to US law). Because I want the Usan customer to have full confidence in giving me the job. The payment plan is of course designed in a way that I will not suffer any losses; I want to ensure that it is transferred to the bank account I will open there. Can I organize all this without going to Usa? Also, if I want to sell ready-made design packages from my website, can the coding infrastructure I have built here be integrated with banks in Usa? If you have information on this subject and share it, I would be very happy.
Hello,
Of course, you can easily form such a structure remotely without going to the USA. By integrating your site with virtual POS systems such as Stripe, you can receive payments in dollars and transfer them to your bank in Usa.
You can also open your stripe and bank accounts yourself by forming your company using the methods in your blog. Or you can also get service from us regarding this.
Hello. Kentucky is the most affordable, the company in Kentucy is only 55 dollars. My question is, why does everyone prefer Wyoming and Delaware when there is Kentucy? So I'm saying it with the example of free cheese in a mouse trap) I'm going to open an llc but Kentucy $ 55 and other eligibility sounds good, but almost everyone opens in the other 2 states. Maybe taxes are higher in this state compared to other states? can it be?
Hello,
Actually, you asked a good question and this type of questions have been answered before, but let's summarize it again.
When forming a foreign company, the choice of state generally depends on the type of business. For example, Amazon sellers prefer Wyoming because it is easy to get a resale certificate and wholesalers look more favorably towards Wyoming LLCs. Delaware is preferred for larger projects aimed at receiving future investments. Kentucky, on the other hand, is preferred for the dropshipping and e-commerce sector, which needs payment gateways such as Stripe, because its annual costs are affordable and it is a solution that works.
The tax side varies depending on where you sell, what you do, and your physical connection there. In any case, tax is paid in some way, even if it is a foreign company. If you have a job where you earn income from within the USA, you should already know that there are annual limits and you will pay income tax when you reach them. At this stage, there is not much advantage regarding the state because the tax is paid federally to the USA, whether Delaware, Kentucky or Wy. It doesn't matter.
Kentucky is a US state and you pay a small fee, not free. Why would you pay $300 to the state of Delaware every year if it does not create any restrictions on the way you do business? Of course, if you have the financial means, you can pay, no one will judge you for this.
You should already know what you will do, you have reached the stage of forming an llc, now all that is left is to choose your state. In the light of this information, you can choose your state and start the process.
I hope it was useful, I wish you good luck.
Is there an income tax situation when the sales tax limit is exceeded?
When the sales tax limit is exceeded, you start collecting sales tax. Of course, this also triggers income tax depending on the platform you use and the geography you sell to. Also, if you are using a payment gateway like Stripe, they will send you 1099k to individuals within the USA after an annual turnover of 20 thousand USD or 200 transactions. Since this notification goes to the IRS automatically, you will be subject to tax. Under these circumstances, you must pay your income tax at the end of the year.
Hello . What I want to know is our company in America, our bank account, our shopify site,
okay. We also kept our warehouse. We will sell on amazon and shopify. What kind of infrastructure should we establish to run our business simply and at low cost? Is there an ERP that has ready integration with shopify, marketplaces and shipping companies and is not costly? At the same time, I also want to follow the comments and requests from customers in one place. Is there a method or company you would recommend to me? Thank you.
Hello, there is definitely an ERP that allows you to manage all platforms, but at least you can manage other marketplaces via shopify. There is an app for this: https://apps.shopify.com/codisto-linq?locale=tr, check it out if you want.
Hello, first of all, it is a great blog site. You have explained what no one else has explained, with examples and alternative recommendations. Congratulations.
My partner and I want to establish an LLC company in America and open an account on Amazon. However, in your articles you generally focused on the establishment of a one-person company. Which state would be more suitable for people like us (a company with 1 partner) or what kind of procedures await us, how and how much will the costs and taxation be incurred? Frankly, my head is full of question marks.
Are there any other companies you know that provide services such as startpack.io (utility bill)?
We would be happy if you inform us.
Thanks.
You are welcome, the methods I describe here are the contents that emerge from my own experiences. In other words, since I have not formed and operated a multi-partner LLC myself, I generally do not provide information on that subject. Multi-partner LLC setup is actually not much different, you can still choose Kentuck as a state, it is closed and annual fees are low. In a multi-member setup, there is a list of members only in contracts and documents. There must be a contract called operation agreement.
For the tax side, you need to talk to an expert CPA. There is a list here: https://startupsole.com/amerika-muhasebe-firmalari/ The first expert also gives free phone consultancy, if you want, make an appointment and tell him about your business. He is very knowledgeable about Amazon. Since a single-member LLC is a disregarded sole proprietorship structure in the United States, it is not taxed like a real corporation, as is the case with multi-member companies. Believe me, the forms and declarations filled out are different compared to those with single membership. I do not want to mislead you about taxes, so talk to the CPA I recommend in detail.
Hello again, first of all, thank you for your help. We decided to work with your suggestion ”startpack.io”.
$769 package price, $40 Kentucky state fee, $200 multiple partnership filing fee. The total bill is $1009.
So, will we still need the Utility Bill after our Amazon account is opened?
Hello Mr. Yalçın,
This topic will enlighten you, there is no need for utility bill: https://startupsole.com/amazon-icin-amerikada-sirket-kurmak/
It will probably stay because Amazon will ask you for a utility bill for address verification, and you may have problems at that stage. If you want, you can talk about this issue to Arjun from Startpack. He is very interested and knowledgeable on these issues. Let him know that you came from our site and convey your concerns in detail via e-mail, and he will definitely guide you better. By the way, the address they give (for the utility bill) may be in Wyoming, so Amazon may need to form the company in Wyoming in order for the addresses to match each other, because you receive this service to prove that your company address is at the same address as the invoice so that the verification is successful. You need to discuss all these details because you will be investing a certain amount, believe me, I do not want you to have any problems at this stage.For your information, they also explain how to open a verified account on Amazon step by step in this article: https://www.startpack.io/blog/the-ultimate-guide-to-selling-on-amazon
Hello Mr. Yalçın. Did you find an answer to your question? Does the 769 USD package work?
ITIN, SSN whatever, you get the idea. Can't we just get ITIN? Let's get ITIN without an llc and pay our individual taxi.
You don't need an llc to buy jobs, but where and how will you do business without an llc? It depends on what you do, for example payment gateways (stripe) do not allow you to open an individual account. You cannot open a bank account. I don't quite understand what good a dog will do if you can't do any work.
All the information is so clear and concise, you are great, I thank you and everyone who contributed. This is the first time I liked a site this much. 👍
Thank you, we are very glad that you like it. Conveniences.
I am setting up EIN, EIN, LLC and why is it SSN and not EIN? We are the only people working in the company. We do not have any other employees, they will be sole proprietors. Am I wrong? EIN is always mentioned in the articles, why is SSN not mentioned? Thanks
Because you have to be a US citizen for SSN. SSN is given by the government only to US citizens, so you cannot get it even if you want. Therefore, as a foreigner, what you need and need to get for your LLC company is the EIN.
Hello, thank you for your valuable shares, I have read almost all your articles and shares, I would be pleased if you could respond to the topic I shared below.
Can we carry out transactions through our other project sites other than the business name we will write when registering at incauthority? For example, I entered our company name as blanca.com.
I will have sites in different projects for dropshipping, for example, my sites are Kedi.com – Pamuk.com etc. The sites are in English. There will be separate sites on which I want to sell in America, but the main address of the company is so-and-so.com. In this case, would we be acting against the legislation because I think I will not establish a company for each of my sites. Thanks
Hello, thank you for your comment.
Your comment went to spam, so we're sorry we saw it late. Coming to your question, you can carry out different projects through the same company. Ultimately, all the roads you give as examples lead to e-commerce. So, if you are doing e-commerce on different sites through the same company, there is nothing against the legislation.
To answer the question assuming that you will use Stripe to receive payments;
Stripe has a multiple account feature and you will need to open a separate business account for each website, but you can open new sub-accounts by simply changing your site address, provided that the business information and tax number are the same when opening an account.
Stripe says: “If you have multiple projects or businesses operating under the same legal entity, you can use the same tax ID and business information across multiple accounts. Be sure to provide appropriate general business information to avoid customer confusion.” Source: https://stripe.com/docs/multiple-accounts
Summary: You formed your company as “So-and-so LLC” as the business name and your first site when opening a stripe account was falanca.com.
You have opened another site, let it be cats.com. When adding a new business account to the Stripe account, your company name will still be So-and-so LLC, but you will enter the website from which you will receive payment as cats.com.
In this way, you can open many sub-accounts (for each of your e-commerce sites), Stripe allows this, provided that your company name is So-and-so LLC and your EIN number is the number you received on behalf of So-and-so LLC for each account opening. Of course, if your e-commerce sites are the type of site they approve.