Common Issues Solutions When Registering a U.S. Company What You Must Know

Understanding Common Issues and Solutions When Registering a U.S. Company

In recent years, with the continuous advancement of globalization and the increasing frequency of cross-border business activities, more and more Chinese companies and individuals have chosen to register companies in the United States to expand into international markets, enhance brand influence, or conduct overseas investments. Especially in the context of ongoing adjustments in U.S.-China trade relations, many companies hope to establish a presence in the U.S. to bypass trade barriers, optimize tax structures, or lay the groundwork for future listings.

However, registering a U.S. company is not as simple as filling out a form. It involves legal, tax, and operational considerations, and even small mistakes can lead to compliance risks down the road. This article, based on recent news and practical experience, analyzes common issues encountered during the registration process and offers practical solutions to help businesses and individuals navigate the U.S. market more smoothly.

1. Choosing the Right Business Entity LLC, C Corp, or S Corp?

Common types of U.S. business entities include Limited Liability Company LLC, C Corporation C Corp, and S Corporation S Corp. Each has different implications for taxation, management structure, and shareholder eligibility.

An LLC is often the preferred choice for startups and small-to-medium-sized businesses because it combines the liability protection of a corporation with the tax flexibility of a partnership. Profits from an LLC pass through to the owners’ personal income tax, avoiding double taxation.

A C Corp is suitable for companies planning to raise capital or go public. However, its downside is the potential for double taxation-once at the corporate level and again at the shareholder level when dividends are distributed.

An S Corp is a tax status available to qualifying small businesses that allows income to pass through to shareholders’ personal tax returns, thus avoiding double taxation. However, it imposes restrictions on the number and nationality of shareholders.

Solution

Choose the entity type based on your company’s long-term development plans, financing needs, and whether you intend to operate in the U.S. long-term. For example, if the goal is simply to establish a sales platform or brand presence in the U.S., an LLC is usually appropriate. If you plan to raise venture capital or consider an IPO, a C Corp may be the better option.

2. Choosing a State Why Is Delaware So Popular?

U.S. states vary significantly in corporate laws and tax policies, and the choice of registration state directly affects operating costs and the legal environment. Delaware is particularly favored due to its business-friendly legal environment, well-developed corporate law system, and strong protection of shareholder privacy.

According to a 2025 survey, over 60% of publicly traded companies and nearly 70% of venture-backed startups in the U.S. are incorporated in Delaware. The state has a specialized Court of Chancery that handles commercial disputes efficiently, offering strong legal protections for businesses.

Solution

If you do not plan to operate in the state where you register, consider incorporating in Delaware and then registering as a foreign corporation Foreign Qualification in the state where you actually operate. This allows you to benefit from Delaware’s legal advantages while complying with local regulations.

3. EIN Application and Tax Registration A Critical Step

After registering a U.S. company, you must apply to the Internal Revenue Service IRS for an Employer Identification Number EIN. This number is essential for tax reporting, opening bank accounts, and signing contracts.

Non-U.S. residents may face challenges with identity verification during the EIN application. According to IRS guidelines, non-residents can apply by completing Form SS-4 and submitting it by mail or fax, or by authorizing an agent to apply on their behalf.

Solution

It is advisable to work with a professional service provider to ensure the EIN application is completed accurately. After registration, you must also complete federal and state tax registrations based on your business entity type to avoid disruptions in operations due to tax-related issues.

4. Opening a Bank Account Remote Options Are Emerging

Opening a U.S. bank account is a major challenge for many non-residents after company registration. In the past, applicants were required to be physically present in the U.S., but recent advancements in fintech have made remote account opening possible.

In 2025, several U.S. banks, including Mercury and Silicon Valley Bank, offer online identity verification and account opening services. Additionally, some Chinese-backed overseas banks now provide cross-border account opening services, allowing clients to complete identity verification in China and remotely open U.S. bank accounts, significantly improving convenience.

Solution

Prepare documents such as the company registration certificate, EIN, articles of incorporation, and shareholder identification in advance. Choose a bank that supports remote account opening. If necessary, you may also consider hiring a professional agency to assist with the process.

5. Annual Reporting and Compliance Avoid Penalties Due to Oversight

Registering a U.S. company is just the first step; ongoing compliance is equally important. States have specific requirements for annual reporting, tax filings, and shareholder information updates. For example, California requires companies to submit an Annual Report Statement of Information and pay an $800 annual franchise tax.

In recent years, the U.S. has intensified regulatory scrutiny of foreign businesses, especially in areas such as anti-money laundering AML and Know Your Customer KYC. Failure to submit required documents or hiding shareholder information may result in fines or even the dissolution of the company.

Solution

Establish a dedicated compliance team or engage a professional firm to handle annual filings and ongoing compliance. Maintain transparency and promptly update shareholder and director information.

6. Intellectual Property Protection Secure Your Brand Early

As more Chinese companies expand overseas, trademark and patent disputes have increased. In 2025, the number of Section 337 investigations initiated by the U.S. International Trade Commission ITC involving Chinese companies rose year-on-year, highlighting the importance of intellectual property protection.

Solution

Apply for trademark registration with the U.S. Patent and Trademark Office USPTO as soon as possible after company registration to prevent brand squatting. Consider applying for U.S. patents for core technologies or products to strengthen legal protection.

Conclusion

Registering a U.S. company is a crucial step toward entering the American market, but it involves a complex web of legal, tax, and operational considerations. By planning ahead, understanding common pitfalls, and implementing effective strategies, businesses and individuals can ensure smooth and compliant operations in the U.S.

In today’s rapidly evolving global economic landscape, attention to detail at every stage of the process is essential to successfully achieving international expansion goals.