How to Register a Business in the US from Bhutan

Step 1: Benefits of starting your US business from Bhutan

Starting a US business from Bhutan offers a range of exciting benefits for burgeoning entrepreneurs. One of the most compelling advantages is the ability to tap into the vast US market while enjoying the serene and affordable living conditions that Bhutan provides. Not only can you leverage the favorable business environment of the US, but you also have the flexibility of operating from a country known for its peaceful lifestyle and strong sense of community. This combination can significantly lower your overhead costs while still granting access to a diverse and large consumer base.

Moreover, the advent of digital technology means that geographical boundaries are more fluid than ever before. Entrepreneurs in Bhutan can easily set up and manage US-based enterprises through various online platforms and digital tools. This not only reduces the need for physical presence but also enhances operational efficiency. In addition, Bhutan offers a unique cultural perspective that can contribute to innovative business ideas and practices, making your US business stand out in a competitive market. By balancing the resources and opportunities of two very different environments, entrepreneurs can create dynamic and successful business models.

Step 2: How to start your US business from Bhutan

Starting a US business from Bhutan involves several steps, beginning with understanding the legal requirements and processes. Firstly, it is essential to decide on the type of business entity you wish to form, such as a Limited Liability Company (LLC), corporation, partnership, or sole proprietorship. Typically, many international entrepreneurs prefer to establish an LLC due to its flexibility and simplicity. To facilitate this process, you might consider engaging a US-based attorney or a business formation service to help with state-specific regulations and paperwork.

Once you have selected the business structure, you will need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is crucial for tax purposes and is required for opening a US bank account. Following this, you must register your business with the state in which you plan to operate. This involves filing the necessary formation documents, such as the Articles of Organization for an LLC, with the state’s Secretary of State office. Additionally, it's important to ensure compliance with any state-specific licensing and permit requirements that may apply to your business.

An equally important step is setting up a US bank account to manage your business finances. This usually requires an EIN, company formation documents, and possibly a physical US address, which can often be arranged via virtual office services. Moreover, consider the tax implications of owning a business in the US while residing in Bhutan. Consulting with a tax advisor familiar with international business can provide clarity on your tax obligations both in the US and Bhutan.

Starting a US business from Bhutan presents a unique set of challenges, but with careful planning and the right professional guidance, it is entirely achievable. These initial steps will lay a solid foundation for your business venture, enabling you to navigate the complexities of US business law and achieve your entrepreneurial goals.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Bhutan

Understanding Compliance Requirements for Running a US Business in Bhutan

When establishing a US business in Bhutan, understanding and adhering to local compliance requirements is crucial. This ensures smooth operations and helps avoid legal and financial penalties. Here are some key considerations:

1. Business Registration and Licensing

Before commencing operations, it is mandatory to register the business with the Ministry of Economic Affairs in Bhutan. Different business structures (e.g., sole proprietorship, partnership, corporation) may have distinct registration processes and fees.

• Obtain specific licenses based on the type of business.
• Renew licenses annually to remain compliant.

2. Foreign Direct Investment (FDI) Regulations

Bhutan has stringent FDI regulations to control foreign investments. US businesses must understand these to ensure compliance:

• Comply with the Foreign Direct Investment Policy, which outlines sectors open to foreign investment and ownership limits.
• Submit an FDI application for approval for any investment exceeding a specific threshold.

3. Taxation and Financial Compliance

Understanding Bhutan's tax environment is essential for financial compliance. Key tax considerations include:

1. Corporate Income Tax: All businesses must file annual tax returns and pay taxes based on their income.
2. Value-Added Tax (VAT): Determine if your business activities require VAT registration and compliance.
3. Other Taxes: Be aware of other applicable taxes such as import duties, sales taxes, and payroll taxes.

4. Employment Laws and Labor Regulations

Compliance with local employment laws is crucial for smooth operations. Key considerations include:

• Labor Contracts: Ensure employment contracts comply with Bhutan’s Labor and Employment Act.
• Employee Benefits: Understand and provide mandatory employee benefits like social security and health insurance.
• Work Permits: Secure necessary work permits for US expatriates working in Bhutan.

5. Environmental and Social Responsibility

Bhutan emphasizes Gross National Happiness and sustainable development. US businesses should align with these values:

• Adhere to environmental regulations to minimize ecological impact.
• Engage in Corporate Social Responsibility (CSR) initiatives that support local communities.

6. Anti-Corruption and Ethical Practices

Maintaining ethical business practices is paramount:

• Comply with the Anti-Corruption Act of Bhutan to prevent any corrupt practices.
• Adopt transparent business practices and maintain good governance.

Understanding and following these compliance considerations is vital for running a successful US business in Bhutan. Consulting with local experts and legal advisors can further assist in navigating the regulatory landscape effectively.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Bhutan

Understanding Tax Obligations for US Businesses in Bhutan

Expanding your business into Bhutan can be a rewarding venture. However, understanding the tax obligations is crucial for legal compliance and financial planning. Here are some key considerations to help you navigate the complexities of taxation for a US business operating in Bhutan.

Corporate Income Tax

Bhutan imposes a Corporate Income Tax (CIT) on profit-generating entities. The tax rate may differ based on the type of business operations and industry. It is essential to consult local tax laws to understand applicable rates and compliance requirements. Ensure you keep accurate financial records to facilitate tax filing and audits.

Business License Renewal

US businesses must renew their business licenses annually in Bhutan. Compliance with tax payment prerequisites is necessary for license renewal. Failure to renew can lead to penalties or business suspension.

Value Added Tax (VAT)

Bhutan has yet to implement a Value Added Tax (VAT) but instead operates under a sales tax regime. Business owners must keep abreast of current and potential tax reforms to ensure compliance and optimize tax planning strategies.

Customs Duties

Importing goods into Bhutan involves paying customs duties. Rates differ based on the type and value of imported goods. Determine applicable tariffs and include these costs in your financial planning. Proper documentation is critical to avoid delays and penalties at customs.

Double Taxation Agreements

Bhutan does not have a comprehensive tax treaty with the United States. Hence, US businesses may face double taxation on income generated in Bhutan. It is advisable to consult with tax professionals experienced in international taxation to explore methods for mitigating double taxation.

Local Expertise

Engaging local financial and legal advisors familiar with Bhutan’s tax landscape can offer invaluable insights. They can assist with compliance matters, including tax filings, audits, and navigating bureaucratic processes.

Audits and Compliance

Bhutan requires businesses to undergo periodic audits to ensure compliance with tax regulations. Keeping detailed and accurate records will help in smoothly handling these audits. Non-compliance can lead to fines or legal issues, adversely impacting business operations.

Environmental Taxes

Bhutan places a strong emphasis on environmental conservation. Businesses may encounter environmental taxes or regulations. Adhering to these not only ensures compliance but also aligns with Bhutanese cultural values.

Employee Taxation

Understand the tax implications for both expatriate and local employees. Ensure payroll systems are set up to comply with Bhutan's income tax regulations to withhold and remit accurate amounts.

Navigating the tax landscape in Bhutan requires careful planning and local expertise. Companies should endeavor to keep abreast of legislative changes and engage competent professionals to ensure compliance, thereby facilitating a successful business venture in the Kingdom of Bhutan.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country