Practicalities of Operating the U.S. Subsidiary
There are a number of other practicalities of operating a U.S. subsidiary that are listed below. These will the subject of future pages on this site.
· Tax forms: I recommend that you retain good tax accountants to assist the subsidiary with its local US tax forms. If an LLC is used for the subsidiary, a tax election must be filed soon after formation to elect to have the entity taxed like a corporation so the LLC is treated like a subsidiary rather than a branch for tax purposes.
· U.S. citizen or resident status: There is no requirement in Delaware or any other state that a director or officer of a U.S. entity be a U.S. citizen or resident. It is OK to have all of the directors and officers as overseas non-U.S. citizens and non-U.S. residents. However, it is helpful operationally to have one U.S. resident as an officer of the subsidiary -- typically the CFO -- to open bank accounts and be the signatory on such bank accounts. For many banks in the U.S. having a U.S. social security number as an individual allows the subsidiary's bank account to be opened easier. There are additional procedures if a non-U.S. resident wishes to open a bank account for a business.
· Administration: Although no one is required to be "on the ground in the U.S." having a country manager or office manager to handle the regular administration is a good idea. Once the subsidiary is operational, there may be an office lease, payroll, employee hiring and firing, etc. Those are most easily handled by someone on the ground in the U.S.
· Immigration Matters: If persons from the parent company are going to come to the U.S. to work for the subsidiary, if they are not U.S. citizens or residents, they will need proper visitor or work visas that allow them to be employed for their tasks in the U.S. We can refer you to good immigration counsel to assist you with these matters.
· Tax forms: I recommend that you retain good tax accountants to assist the subsidiary with its local US tax forms. If an LLC is used for the subsidiary, a tax election must be filed soon after formation to elect to have the entity taxed like a corporation so the LLC is treated like a subsidiary rather than a branch for tax purposes.
· U.S. citizen or resident status: There is no requirement in Delaware or any other state that a director or officer of a U.S. entity be a U.S. citizen or resident. It is OK to have all of the directors and officers as overseas non-U.S. citizens and non-U.S. residents. However, it is helpful operationally to have one U.S. resident as an officer of the subsidiary -- typically the CFO -- to open bank accounts and be the signatory on such bank accounts. For many banks in the U.S. having a U.S. social security number as an individual allows the subsidiary's bank account to be opened easier. There are additional procedures if a non-U.S. resident wishes to open a bank account for a business.
· Administration: Although no one is required to be "on the ground in the U.S." having a country manager or office manager to handle the regular administration is a good idea. Once the subsidiary is operational, there may be an office lease, payroll, employee hiring and firing, etc. Those are most easily handled by someone on the ground in the U.S.
· Immigration Matters: If persons from the parent company are going to come to the U.S. to work for the subsidiary, if they are not U.S. citizens or residents, they will need proper visitor or work visas that allow them to be employed for their tasks in the U.S. We can refer you to good immigration counsel to assist you with these matters.
