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Every business in the United States must have an Employer Identification Number (EIN), sometimes referred to as a federal tax ID number. It is a unique number that the federal government issues for businesses. EIN is used by the IRS to easily and quickly identify businesses for tax matters.
Applying for EIN requires filling out forms that require you to input your Social Security Number (SSN) to show that you are eligible. But what if you are a non-U.S. citizen and do not possess an SSN but require an EIN to start a business in the United States? What will you do to apply for EIN without an SSN?
Keep on reading to know;
For legalizing an LLC in the US, you must apply for the EIN that the IRS will use to track your business's income taxes and receive other taxes that you have to pay. Those who are not citizens of the United States but are doing business there, such as selling on Amazon or running an eBay storefront, also need to get EIN to open a business bank account and report their earnings.
Moreover, if you are importing goods into the US, you need to show your EIN if you don't have an SSN or ITIN (Individual Taxpayer Identification Number).
Having an EIN saves from the complex US customs and Border Protection formal checking levels. Among other uses, some include hiring employees, opening up a bank account in the United States (even if the foreign company has no physical presence in the United States), and complying with the IRS.
With a business EIN, you can build business credit, apply for business credit cards, manage business finances, and use it for many other tax-related matters. Your business will be ‘official’ and ‘real’ in the eyes of tax code and law if you have a business EIN.
There are a number of occasions for which businesses need EIN where the IRS will use your EIN apart from establishing the business. Here is the list of some reasons and occasions when having an EIN is required:
There are a variety of reasons for different international enterprises intending to establish themselves in the US. It is a common view that non-U.S. citizens can't launch their enterprise in the United States just because they do not have a Social Security Number (SSN) and Individual Taxpayer Identification Number (ITIN), which are needed to apply for the Employer Identification Number (EIN).
However, this is not true. A non-resident of the United States can establish their firm in the US by taking proper steps and acquiring EIN.
It's a common thought that you must hold a Social Security Number to get EIN for your business. Well, it's a misconception. You can easily acquire an EIN without SSN.
One option is to get the Social Security Number and then obtain the Employer Identification Number. You can obtain SSN once you enter the country or apply for an immigrant visa. The applicant must be authorized to do business in the United States to qualify for the SSN. However, this option is not applicable for those who do not have the employment reasons to get the Social Security Number.
However, you can still get an EIN without SSN by following some steps in which you fill the SS-4 form and mail it to the IRS.
The first step is to decide who will act as your third-party designee.
You can obtain an EIN without having an SSN with the help of a third-party designee. They will be accountable for your business when you start the process of the EIN application. The job of the designee is to prepare the Application for Employer Identification Number (Form SS-4) and Tax Information Authorization (Form 8821) for the president of the corporation to sign and return.
A third-party designee is a business or an enterprise in the US who is the representative of your business and has a credible reputation in the eyes of the IRS. During the formation process, you give them temporary authorization to act on behalf of you, and you act as a foreign business investor.
A co-owner and a partner of your business who is a US resident can also be your third-party designee. If not, a lawyer, accountant, or some qualified individual can also act as a third-party designee for your corporation. It is recommended to select your resident accountant as a third-party designee. They can also help you with the preparation of tax using your Employer Identification Number.
No, that is not true. You can do it by yourself. Simply fill the Form SS-4 and send it to the IRS by fax or mail, which we will discuss shortly.
Whether it is your US resident co-owner, an accountant you are already working with, or an attorney, it is up to you. Once you have decided, now you will solidify the partnership by signing the agreement.
Now your third-party designee is required to gather the information related to forms necessary to complete the application if hired. The next step is to fill out the Form SS-4 (Application for EIN) and mail it to get the EIN.
You can download Form SS-4 at:
IRS: Form SS-4, Application for Employer Identification Number
Instructions for Form SS-4:
IRS: Instructions for Form SS-4
Once all the application content is finalized and completed, the third-party or you will send the application to the IRS for consideration either by mail or fax.
Before submission, you have to ensure that the third-party authorization section on the form SS-4 is complete. This is confirmation from you that you are agreed to the designee getting an EIN for your business.
Also, make a few copies and include your LLC stamped approval document.
The international applicants can use the below address when submitting Form SS-4 via mail from any country. Generally, it takes 6 to 8 business EIN several weeks to arrive if it is applied by mail.
Address: Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
There is a special fax number assigned for those who want to submit business EIN via fax. Use the fax number 1-855-641-6935 or 304-707-9471 to send the relevant form to IRS. Generally, it takes 4 to 8 business weeks to get the business EIN if the application is submitted by fax.
When EIN is approved, it will be collected by the third-party or be sent to the address you mentioned in the form. According to the IRS, the third-party designee has no longer any authority once the EIN is issued to you. Now you are in control of your EIN, and you can use it for your business tax purposes and others.
Before you apply for EIN, you must ensure that your business is approved because if your company gets rejected, your EIN will be attached to the wrong business or company. You also need to send the approval to the IRS along with the application of the Employer Identification Number.
The accompanying approval form varies from state to state, but it will be approved/stamped Articles of Organization, Certificate of Formation, or Certificate of Organization.
There is no issue if the business approval comes late and you have applied for the EIN. In further business matters, if your EIN confirmation letter and LLC name on state forms match each other, you are good. The IRS does not check whether the company was formed first before getting an EIN. However, if your LLC is rejected due to the name Issus and you have already applied for EIN, you need to resubmit the LLC filing forms and then apply for a new EIN.
After that, you must cancel your previous EIN. Do not wait for the first one to get canceled and then apply for the new Employer Identification Number. The only exceptions are for West Virginia or Louisiana, where you can get EIN first and then form the LLC.
As per IRS, there is no cost for getting an EIN for establishing the business as their service is free of cost. Thus, if you come across any advertisement or website that asks for a fee to get you an EIN, it is better to go through the IRS directly and ignore those offers.
Once the EIN is received, you can now open business bank accounts and pay the relevant taxes, which are compulsory as per the federal government for doing business in the US. You can easily pay your taxes online if you are abroad.
Once you have received EIN for your business, it has now become your company's federal taxpayer ID number indefinitely, and the IRS cannot cancel it. EIN is unique for every business, and it is not reused or reassigned to other businesses even if you don’t use it to file the tax returns in the future.
However, as per IRS, the agency may close the account of the company if you realize later that you do not actually need EIN. For this purpose, send a letter to the IRS that mentions the legal name of the business, address, Employer Identification Number, and reason for closing the account. You need to pay all the due taxes before you close the account.
Now you have your business EIN; you can do business in the US even if you reside overseas. Although the process of getting a business EIN without SSN takes some time, it is worth the wait. So move ahead and chase your entrepreneurial dreams.
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