How To Set Up a US Bank Account as a UK Limited Company

If you’re looking to venture across the pond and take your UK ltd company into the United States, then you’ll want to look into getting a US bank account. With almost 400 million potential customers, I can understand why this seems appealing to you. Opening a US bank account could mean you reap the benefits of this huge market with easier organisation of US transactions and bringing in countless business to your company.

How to open a US bank account

To open your new account, you first need to sign up for a US tax identification number. This is referred to as an EIN (employment identification number). Fill in a Form SS-4 to get this.

You are now within the Internal Revenue Services (IRS) system. This sounds daunting, but don’t worry, at this point you do not have a US tax liability.

Your next set of forms will be W8/W9 forms. These are used by US banks to help in their reporting and documenting your US tax classification as either a foreign or domestic entity. This is also not a tax obligation, but the W8 forms (W-8BEN-E, W-8IMY, and W-8ECI) have had a recent revamp and so will include changes relating to the new FATCA regulations.

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You will only be obligated to pay tax if, along with income from US sources, there is also evidence of permanent establishment (PE). This is because the UK is a treaty country.  Determining PE is difficult but is likely to occur if your company has a fixed location within the USA. This can be a tricky area within tax so if you’re at all concerned you should address the issue with a US international corporate tax specialist. These are specialists when it comes to US tax and can help you make the most of your business in America and ensure you’re following the correct procedures.

The most important thing is to ensure your company isn’t left vulnerable in case of an IRS audit. If there is a concern over a possible PE issue then you can provide yourself some protection in the form of a 1120-F form. This protective return form may reduce your risk of losing deductions after an audit by indicating and raising the issue of PE concerns.

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Don’t let complex procedures and confusing forms stop you from following your dreams and moving your limited company to the next level. The USA presents an excellent opportunity to expand your customer base and really spread the word about your product or service. When it comes to tax, the finer details and strange jargon can really put people off the idea, but that’s where you can call upon the professionals for help. Don’t struggle to go through it on your own, companies such as US Tax and financial services are experts in this area and therefor used to dealing with these issues.

So, all that’s left to say is good luck on your next business venture.

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