A US entity is a highly regarded credible entity anywhere in the world. Besides all protections it gets, a US entity holds an extra dignified reputation when it comes to getting involved in “business activities” in Europe, Asia or Southern America.
But with such business prestige comes “responsibilities”. And that is why only a “US authorized operator” can manage or operate the affair of a US Legal Entity.
Who is a “US authorized operator?” An authorized operator is one who is “otherwise permitted” to work in the US.
In the US, there are two main types of US business entities: the business corporation (company limited by shares) and the limited liability company, or LLC.
A foreign person not on the US soil can own an LLC and make profit in the US. A foreign person can NOT be the operating manager and MUST assure the US taxes are paid. A foreign person may hire a member-manager or a none- member manager to operate LLC's “day to day” duties or business affairs.
Formation of an LLC or other US business entities is Not enough to operate a business in the US. An operation would fall under all license and permit necessities for that business activities. For instance, in an “export and import business”, buying goods to send out of the USA may constitute a different necessity than buying goods from US to resell in the US.
Regardless of the operation, the operating manager must have a “US Valid Work Authorization” or be a US Green Card Holder or a US Citizen. And A US valid worker may be anyone who is otherwise authorized in the US.
For a foreign owner of an LLC to qualify for doing the direct day to day operation a “valid work or business visa” is required. Depending on the required qualifications, the work or business visas might be E2, E1, Eb5, H1b, L1 visas.
E2 and E1 are investor treaty visas, they are based on treaties we have we different countries. Eb5 is a congress-approved investment visa (President Trump increased the amount from $500,000 to $900,000 on November 21st of 2019), H1B visa (employed skilled worker) or an L1 visa (establishing branch of another entity/foreign sister company in the US).
There is some misperception mingled along the wrong advertisements about formation of an LLC to be the mere tool allowing a foreign investor to operate in the US as a US entity. This misconception is invalid and such business activities are unauthorized.
The subject, however, remains open to investigations and assessment as the global entrepreneurs explore the prestige and profitability of owning a US business entity. It becomes more and more important as the passive investors analyze the future of the market, in relations to economies such as “California State”, as it is the world's 5th largest regional economy.
This is a legal blog. It is not intended to be used as legal advice. This blog does not create Attorney-Client Relationship. For further information please contact the law offices of attorney Ramona Kennedy.
Ramona Kennedy (Attorney) received her Jurisprudence Doctorate in America and is a licensed attorney in California (USA). Ramona Kennedy is a member of American Immigration Lawyers Association (AILA) and Orange County Trial Lawyers Association (OCTLA). Ramona Kennedy is fluent in English and Farsi (Persian).
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