A Federal Tax ID Number is also known as an EIN (Employer Identification Number). This number can be used to identify your corporation and file taxes in the United States. If you require an EIN from outside the United States, the process is rather simple and is explained here to assist you on how to get an EIN as a foreign national.
This post will be very useful to you if you recently moved to the United States and want to establish a business or expand an existing business and are considering getting an EIN. Employer Identification Numbers (EINs) are also known as Tax Identification Numbers (TINs) or Federal Tax ID Numbers. Although these three terms are equivalent, Employer Identification Number is the most prevalent and well-known.
You may be interested in knowing about EINs if you recently moved to the United States and want to start a business or extend your existing business to the United States. We’ll explain what an EIN is and how you get one from the Internal Revenue Service for free (IRS).
Before you apply for an EIN, read our guide on how to start an LLC which will help you to form your business. Let’s get started with how to get an EIN as foreign person.
Here are the top picks of LLC formation companies that will help you to get an EIN:
👉 Top Rated 13 Best LLC Formation Services
👉 How To Choose The Best Registered Agent Services For LLC
👉 Best Online Incorporation Services To Form An LLC
👉 Top Stripe Atlas Alternatives To Launch A Business
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Table Of Contents
What Is The Need Of An EIN?
Every business in the United States is required to have an EIN. The IRS uses this one-of-a-kind number issued by the federal government to swiftly and readily identify each corporation for tax reasons.
After your company has been properly registered, you can apply for an EIN. The IRS will use your firm’s EIN to record your business income taxes and to receive the taxes that you owe.
If you are not a U.S. citizen and live outside the nation but do business in a country, such as having an e-commerce store, you must obtain an EIN and declare your earnings.
Your EIN will be used if you don’t have an ITIN (Individual Taxpayer Identification Number) or an SSN (Social Security Number). If you’re selling items into the United States, you’ll also need an EIN if you don’t have such an ITIN or SSN. This number will also assist you in avoiding the time-consuming forms provided by US Border agents.
Learn More: What Is DBA And Why It Is Needed?
Reasons To Get An EIN
The primary reason for obtaining an EIN is for taxation and reporting purposes. By separating your money from the company’s money, an EIN protects your business assets from being seized in the event of a lawsuit. Your business will be a separate organization with its own tax records and operating expenditures.
It’s essential to separate personal and business expenses so that trade and economics are easy when it comes time to file taxes. This shield will shield business owners from individual responsibility for debts owed to a company.
If you recruit new employees, you’ll need an EIN to set up payments and manage payroll taxes, as well as for their tax deductions and exemptions. When registering for employer taxes in your state, paying worker pay, and deducting income taxes from your employees, you’ll need an EIN.
If taxes aren’t deducted from your employees’ salaries throughout the year, they may be surprised by a big sum payable when tax season arrives. Your employees may not be able to pay what is owed if this was not planned and considered during the year. Even if a foreign company owner does not have a social security number, an EIN allows them to launch a business in the United States. You can pay salaries, shift money across the company, hire and fire personnel, and report and submit taxes.
Here are some of the reasons why your company might need an EIN:
- You run your company as a partnership or a corporation.
- Employees work at your business.
- Taxes are deducted from income received with one or more non-resident foreigners by your company.
- You have a Pension plan, which is a self-employed person’s retirement plan.
- Excise, Employment, and Alcohol, Tobacco, and Firearms are the tax returns you file.
- Estates, trust, non-profit organisations, real estate mortgage investment channels, plan administrators, and farmers’ cooperatives are all places where your company is involved.
- You’re transporting items into the United States to sell on online sites like Amazon. When products are worth more than a specific amount or are being shipped to the United States by sea, Custom demands an EIN.
What Is An EIN Used For?
An EIN can be used for a variety of purposes. The primary reason for getting one is to file and report your company’s taxes. The EIN will be related to every monetary decision taken on your company’s behalf. Other advantages include holding the corporate entity intact, recruiting personnel is beneficial to multinational businesses and entrepreneurs.
To keep your company’s assets intact, you should segregate yourself from your firm when filing taxes. This separates your money from the company’s money, which protects your assets in the event of a dispute.
With the use of an EIN, you can identify your company as its own entity connected to your company’s expenses and filings. In this way, IRS keeps a track of where the money is coming from as well as where is it going.
How To Get An EIN As A Foreign National?
You will need to fill out an SS-4 Application for Employer Identification Number if you are a foreign applicant. If you fill out this form, you will not need a social security number or a permanent residence to apply to start a business in the United States. If you are a foreign applicant, there are numerous options for getting an EIN. You will not be able to apply for an EIN online if your company was established outside of the United States.
You can reach an IRS person by calling the toll-free number 267-941-1099 between the hours of 6:00 a.m. and 11:00 p.m., Monday through Friday. The form can be sent to 304-707-9471. Finally, you can submit your application to the IRS, Attn: EIN Operation, Cincinnati, OH 45999. The form can be found on the IRS website and downloaded as a PDF. To avoid any needless delays, ensure this documentation is complete and accurate. You would like to get your business up and running as quickly as possible, and you don’t want paperwork to hold you up.
If you want to designate someone else to get your business’s EIN and answer the relevant questions on your behalf, fill out the Third Party Designee part of the form prior to the call. Otherwise, that section of the form can be left blank. Remember to sign the authorization because it will not be valid unless you do so.
The questions on Form SS-4 relate to your company, including its U.S. mailing address, the sort of entity it is, the reason for filing for an EIN, and the industry you work in. Completing these questions ahead of time will help in knowing the responses during your telephonic conversation, saving you time while also allowing you to predict further questions.
You will be given an EIN at the end of the call, which you can use straight away. Keep a note of the number and save it somewhere safe, as your physical copy will come to your U.S. location a few weeks later. Whether you don’t have a U.S. residence, ask the agent if they can post or email the EIN to you internationally.
Steps To Apply For An EIN As A Foreign Entity
Here is the following information that you may require:
- The company’s legal name and address
- The structure of the company
- Reasons for requesting an EIN
- The name of the country (or state) in which the business is based.
- How many staff does it have?
- The company’s business sector
- Some fundamental accounting data
What Is The Need Of A Third Party Designee?
A third-party designee could be a better fit for you and your company. You can get your EIN acquired by a third party. The SS-4’s Third Party Designee portion would need to be filled out by that person. This will enable that person to obtain an EIN and respond to IRS inquiries. A third-party individual could be a decent option for communication if there is a language issue. This authorized person can no longer contact the IRS on your behalf once the EIN is granted. . Having a third-party designee is only needed in certain situations. The majority of people apply for an EIN under their own identity and with their own credentials.
By having a third party fill out the Third Party Designee form, you can assign a third party to obtain your company’s EIN. When you apply by phone, this will allow the designated individual to both respond to questions on Form SS-4 and acquire your company’s EIN.
After the EIN has been assigned, the designee will no longer be able to contact the IRS on your behalf. A duplicate of the application and the signed permission may be required.
What Are The Benefits Of Obtaining An EIN?
There are numerous advantages to having an EIN rather than a social security number. One benefit is the possibility to build corporate credit for financial security. This may result in lower interest rates and more and better business lending options. If you ever require these, having established credit with your firm will be quite beneficial. This can help you receive better loan terms and cheaper interest rates. Most banks will demand an EIN in order to open a business bank account. Another option to keep personal and business finances separate is to open a business account. Access to financial advisors is another benefit of having a business bank account.
Also Read, How Non-US Citizens Can Open A Bank Account?
These experts can assist you with budgets, vehicle sales, payroll services, and business loan applications. Some banks will give you a credit card if you have a business bank account. Your firm will run smoothly if you have a business account and bank credit cards. For a variety of reasons, international business owners who want to start a firm or expand an existing one in the United States should acquire an EIN number. It is simple to obtain and will assist you in a number of ways with your commercial operations.
In case you are applying online, ensure you are following the instructions carefully to make the process as simple as possible.
What Are The Criteria To Make Your EIN Approved?
You can only apply for an EIN online if you meet the following requirements:
- The company must be based in the United States or US territories.
- The applicant must have a fully qualified unique tax identification number for example, a social security number from the social security administration or an individual taxpayer identification number.
- In one sitting, complete the online application.
If you don’t fulfill the above-mentioned criteria, make sure:
- Before contacting the IRS, be sure you have all of the necessary information.
- You should only file once a day. If you have many trusts set up for different properties, this is important.
- Make sure your information is right by double-checking it.
Is It Essential To Apply For An EIN?
There are various reasons, why you should apply for an EIN. Let’s see some of them below:
- EIN allows you to file business taxes and avoid tax penalties: There are many tax benefits that are only available to corporations. Consider the PPP loans as an illustration of the pandemic. Many were even forgiven, making loans essentially grants to specific enterprises.
- EIN can protect your Social Security Number: Documents for your business may be required from time to time. You no longer need to use your more sensitive personal information to fill out those papers if you have an EIN.
- EIN opens up a variety of business accounting options: You might seek loans and business bank deposits if you have a foreign EIN.
- EIN speeds up pretty much everything related to running a business: You can accomplish whatever you need to run a business more easily with an EIN, and if you’re a foreign business, it offers you even more confidence with US businesses and individuals.
As we’ve shown, owning a foreign entity EIN has advantages. To obtain an Employer Identification Number for a Foreign Entity, review Form SS-4 from the IRS, gather all of the necessary information, and contact 267-941-1099. If you apply online, your company must be based in the United States or one of its territories.
From the above discussion, it is clear to conduct business in the United States you must have an EIN. If you need information and tips, don’t hesitate to leave your thoughts in the comment section below.
Frequently Asked Questions (FAQs)
1. Can a foreign person obtain an EIN?
Even if they do not have an SSN, non-US citizens who own firms can obtain a company EIN. While having an SSN isn’t required to be registered as a foreign EIN, it does help reduce the burden. This is because obtaining an EIN online necessitates the possession of a valid Taxpayer Identification Number.
2. Can I apply for EIN without SSN?
To get an EIN, you wouldn’t need an SSN (Social Security Number). If you really want to register for an EIN online, you only get an SSN (or ITIN). You can get an EIN without the need for an SSN by mailing or faxing Form SS-4 to the IRS.
3. Do you need a U.S. address for an EIN?
The IRS will inquire about your business’s actual location when you apply for an EIN. In this situation, your Registered Agent’s address is eligible. The IRS is interested to know where the company is physically located. This address does not have to be in the United States; it could be anywhere in the world.
4. How long does it take to get a foreign EIN number?
If there are any issues, you can approach the IRS to resolve them, saving you time and effort so you can focus on your new business. Once you have a signed SS4 form, you can usually secure an EIN for any international client in seven to twenty working days.
5. How do I get an EIN in the USA?
If your primary place of business is in the United States or one of its territories, you can register for an EIN online. A valid Taxpayer Identification Number is required for online applications (SSN, ITIN, EIN). Each responsible party is only allowed one EIN every day.
6. What is a foreign EIN number?
Employer identification numbers are used by the Internal Revenue Service to identify corporate entity tax filings. Foreign companies who are based solely in another nation can also use EINs to pay taxes or seek deductions from IRS withholding under the rules of a taxation agreement.
7. Do I need an EIN if I’m self-employed?
If you’re self-employed, you can just use your Social Security number instead of an EIN. However, some self-employed people prefer to apply for an EIN rather than use their Social Security number to reduce the danger of identity theft; maintaining company and personal funds separate makes it less likely for someone to hack into your accounts.
8. How do I look up my EIN?
It’s simple to check up on your EIN, and there are various options available. First, the IRS will usually confirm your EIN application by email or a written letter. You can also look for your EIN printed on business documents like tax filings.
9. Can you open a business bank account without an EIN?
Yes, but there is a condition. Because you are technically still considered as an individual in the eyes of the IRS, an EIN is not required to create a business bank account if you are a single-member LLC or sole proprietor.
10. What is the difference between ITIN and EIN?
An EIN is used to identify a business, but an ITIN is often used by people who must file a tax return but are not permitted to work in the United States.