How to Register a Business in the US from Mongolia

Step 1: Benefits of starting your US business from Mongolia

Starting a US business from Mongolia offers numerous advantages for forward-thinking entrepreneurs. One of the primary benefits is access to the world's largest economy. By establishing a presence in the US, Mongolian businesses can tap into a vast market with immense purchasing power and a robust consumer base. This connection can open doors to new customers, subsidiaries, and partnerships, driving significant business growth and international recognition.

Additionally, the US provides a favorable business environment with well-established legal and financial systems that support entrepreneurial ventures. Mongolian entrepreneurs can benefit from the protection of intellectual property rights, access to venture capital, and a variety of grants and funding opportunities aimed at encouraging innovation and business expansion. Moreover, conducting business in the US can enhance a company's credibility and reputation, making it easier to attract global investors and clients. This strategic move can be a pivotal step in scaling operations and achieving long-term success.

Step 2: How to start your US business from Mongolia

Starting a US business from Mongolia is a multi-step process that requires careful planning and adherence to US regulations. Initially, you will need to choose a suitable business structure, such as a corporation, limited liability company (LLC), or partnership. Each structure has different legal and tax implications, so it is important to perform thorough research or consult with a legal expert to determine which option best suits your business needs.

Once you decide on the business structure, the next step is to register the business. This typically involves filing necessary documents with the Secretary of State in the US state where you plan to operate. Additionally, you will need to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS), which is necessary for tax purposes. To facilitate this process, you may want to seek assistance from a reputable business formation service that can guide you through the nuances of US business laws and ensure compliance with all legal requirements.

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 Mongolia

Understanding Compliance Requirements for Running a US Business in Mongolia

Expanding your US business to Mongolia presents an exciting opportunity, but it also requires a thorough understanding of the local compliance requirements. Here are several key considerations to keep in mind:

1. Business Registration

To legally operate in Mongolia, your business must be properly registered. This includes:

• Company Name Registration: Ensure your business name is unique and complies with local regulations.
• Business Licenses: Depending on your industry, specific licenses or permits may be required.
• Tax Registration: Register with the Mongolian Tax Authority to obtain a tax identification number.

2. Employment Laws

Compliance with Mongolian employment laws is crucial. Be aware of:

• Labor Contracts: Written contracts are mandatory for all employees.
• Work Hours: Standard work hours and overtime regulations must be followed.
• Employee Benefits: Ensure compliance with social security, health insurance, and pension contributions.

3. Tax Obligations

Understanding the local tax system is vital for compliance. Key taxes include:

• Corporate Income Tax: Rates may vary depending on the nature of your business and income levels.
• Value Added Tax (VAT): Applicable to most goods and services at a standard rate of 10%.
• Withholding Tax: May apply to certain types of payments to non-residents.

4. Import and Export Regulations

If your business involves cross-border trade, be mindful of:

• Customs Duties: Tariffs and duties on imported and exported goods.
• Documentation Requirements: Necessary paperwork to ensure smooth customs clearance.
• Trade Agreements: Familiarize yourself with Mongolia’s trade agreements which may affect your business.

5. Environmental Regulations

Depending on your industry, you may need to comply with local environmental laws:

• Environmental Permits: Obtain necessary permits for operations impacting the environment.
• Pollution Controls: Adopt measures to minimize environmental impact.
• Waste Management: Proper disposal and management of waste materials.

6. Intellectual Property Protection

Safeguard your business assets by:

• Trademark Registration: Registering your trademarks to protect your brand.
• Patent Protection: Securing patents for any inventions or unique processes.
• Copyrights: Protecting original works through local copyright registration.

By understanding and adhering to these compliance requirements, you can successfully navigate the regulatory landscape of Mongolia and ensure your US business thrives in this dynamic market.

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 Mongolia

Understanding Tax Obligations for Running a US Business in Mongolia

Expanding your business into Mongolia can offer numerous opportunities, but it's crucial to understand the tax obligations that come with operating in this unique market. Below are several key considerations to help you navigate tax requirements when running a US business in Mongolia.

1. Corporate Income Tax

Mongolia imposes a corporate income tax on businesses operating within its borders. As a foreign entity, your US business will be subject to this tax if it has a permanent establishment in Mongolia. The current corporate income tax rates are:

• 10% for taxable income up to MNT 6 billion
• 25% for taxable income exceeding MNT 6 billion

2. Value-Added Tax (VAT)

Mongolia has a Value-Added Tax (VAT) system similar to many other countries. The standard VAT rate is 10%. Your business must register for VAT if its taxable turnover exceeds MNT 50 million annually. VAT is levied on most goods and services sold in Mongolia.

3. Withholding Tax

Withholding taxes may apply to various types of income such as dividends, interest, and royalties paid to foreign entities. The standard withholding tax rates are:

• 10% on dividends
• 10% on interest
• 10% on royalties

These rates can be reduced under Mongolia's tax treaties with certain countries.

4. Tax Treaties

Mongolia has tax treaties with several countries to avoid double taxation and prevent tax evasion. The US does not currently have a tax treaty with Mongolia, which means that US businesses must carefully consider the implications of potential double taxation and look into available credits and deductions offered by both countries.

5. Social Security Contributions

Employers in Mongolia are required to make social security contributions on behalf of their employees. The employer's contribution rate is currently 11% of an employee's gross salary. Additionally, employees must contribute 10% from their salary, which must be withheld and remitted by the employer.

6. Legal and Tax Advice

Given the complexity of international tax law, it is highly recommended to consult with legal and tax professionals who specialize in Mongolian and US tax laws. They can offer tailored advice and ensure that your business remains compliant with all local and international tax regulations.

By understanding and addressing these tax considerations, your US business can smoothly operate within Mongolia and take full advantage of the opportunities this market offers.

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