Starting without a SSN or ITIN

While starting a U.S. business is less complicated and faster with a Social Security Number of International Tax Identification Number than without, it's not required.

Starting a business in the United States as a non-resident or someone without a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) is possible, and Dappr makes the process as seamless as possible. However, there are certain considerations to be aware of, particularly concerning the time it takes to obtain an Employer Identification Number (EIN), which is essential for operating your business.

Forming an LLC or C-Corporation Without an SSN/ITIN

Dappr does not require an SSN or ITIN to start a business. You can form either an LLC or a C-Corporation through Dappr, selecting the state of incorporation, choosing a business name, and completing the formation process just as a U.S. resident would. However, without an SSN or ITIN, the EIN application process will take longer, and certain financial and operational features will be delayed until the EIN is obtained.

When forming a business, it is crucial to ensure that your selected business name is available in your chosen state. Each state has different naming rules, and Dappr provides name validation services to help you choose an eligible name before filing.

Employer Identification Number (EIN)

An EIN is a unique tax ID issued by the IRS, and it is required for several key business functions, including:

• Opening a business bank account (including a Dappr Financial Account)

• Hiring employees

• Filing business taxes

• Accessing certain financial services

• Establishing credit for your business

• Registering for state and federal tax obligations

If you do not have an SSN or ITIN, Dappr will file the IRS SS-4 form on your behalf to request an EIN. Unlike U.S. citizens and residents who can receive an EIN instantly through the IRS’s online application, non-residents or those without an SSN/ITIN must apply via fax, which significantly extends the processing time. This process also requires accurate information, as mistakes on the SS-4 form can lead to further delays.

Processing Timeline for Non-SSN/ITIN Applicants

For customers without an SSN or ITIN, Dappr manually submits the SS-4 form via fax to the IRS. The processing time varies depending on IRS workload, but most non-SSN/ITIN applicants receive their EIN within 4-12 weeks after their company is formed. If the IRS requires additional documentation, processing times may be extended further.

This delay means that while your business may be legally formed, you will be unable to open a business bank account, apply for business credit, or access certain financial features until the EIN is issued. If your business is time-sensitive, planning for this delay is essential.

Other Considerations

Opening a Business Bank Account

A U.S. business bank account is essential for handling business transactions. However, most banks require an EIN to open an account. With Dappr, you can set up a Dappr Financial Account, but it will only be fully functional after your EIN is issued. Some international founders may also face additional compliance checks by financial institutions.

U.S. Mailing Address Requirement

To open a Dappr Financial Account, a U.S. home address is required. This must be a physical address (not a PO box or virtual office). If you do not have one, Dappr offers TruResidence, a premium address leasing service that meets banking requirements, though it comes at a high cost ($300/month) and requires strict identity verification. Some founders choose to use a registered agent address, but most financial institutions will not accept this for banking purposes.

Registered Agent Requirement

If you are forming a business in the U.S. without residing in the country, you will need a registered agent. A registered agent is a person or business entity authorized to receive official legal documents on behalf of your business. Dappr offers registered agent services for compliance and legal notifications, ensuring that you meet state requirements.

State-Specific Rules and Taxation

Some states are more favorable for international founders. Delaware, Wyoming, and Nevada are popular choices due to their business-friendly laws and minimal state tax requirements. However, if your business operates in a different state from where it is registered, you may need to file for foreign qualification in the state where you conduct business. Foreign qualification allows a business to operate legally in another state but requires additional registration and annual reporting.

Understanding state-specific tax obligations is also important. Some states impose franchise taxes, corporate taxes, or annual fees, which may affect your cost of doing business. Dappr provides resources to help you determine which state best suits your business needs.

Tax Responsibilities and Compliance

Even if you do not have an SSN or ITIN, your business may still have U.S. tax obligations. You may need to file annual tax returns and report business income. If your business generates U.S.-sourced income, it may be subject to federal and state taxation. Additionally, some industries require specific licenses and permits, which may involve tax obligations.

It is advisable to consult a tax professional who specializes in international business owners to ensure compliance with U.S. tax laws. Additionally, applying for an ITIN may be beneficial for future tax filings and to facilitate business transactions.

Dappr's Handling

Dappr simplifies the process of starting a business in the U.S., even for those without an SSN or ITIN. While the EIN application process takes longer, Dappr handles all filings, ensuring a smooth formation process. Understanding the implications of not having an SSN or ITIN—especially regarding banking, compliance, and taxation—will help set your business up for success.

To mitigate delays, it is crucial to plan your business timeline accordingly. Ensuring accuracy in your EIN application, choosing the right state for your business, and securing a U.S. address early in the process can help streamline operations once your business is formed.

If you are ready to start your U.S. business, Dappr is here to guide you through every step of the journey, providing expert support and services tailored for international founders.