Obtaining an Employer Identification Number (EIN) is one of multiple steps involved in getting a foreign-owned Corporation set up to conduct business in the United States. An EIN is a nine-digit federal tax ID number issued by the Internal Revenue Service (IRS). All non-exempt business entities (domestic and foreign operating) that operate in the United States are subject to federal income tax, and the EIN is what the IRS uses to track a company’s IRS filings, tax liabilities, and payments. Therefore it is safe to say that most foreign Corporations will require an EIN to maintain compliance.
Examples of the federal tax forms that request a company’s EIN include:
- Federal income tax returns like Form 1120
- Federal Unemployment (FUTA) tax return (Form 940)
- Employer’s quarterly federal tax return for reporting Medicare, Social Security, and federal income tax withholdings from employees’ pay (Form 941)
An EIN is often required for other purposes as well:
- Opening a business bank account
- Getting a business credit card
- Obtaining licenses and permits
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When a foreign Corporation’s owners are non-citizens of the U.S. with no Social Security number or Individual Tax Identification Number (ITIN), they must apply for an EIN by completing Form SS-4 and submitting it by mail or fax. Foreign individuals may not apply by using the online application.
Note that the instructions on Form SS-4 sometimes create confusion—particularly regarding the “responsible party” (box 7a) and that individual’s tax ID number (box 7b). Foreign individuals cannot have a SSN and may not obtain an ITIN until after their company is operational and they file their first personal tax return for income received from their business. But that doesn’t mean they cannot request an EIN for their Corporation. In lieu of an ID number, they can enter “Foreign” in box 7b.
A business can authorize a third-party designee to request the EIN on the company’s behalf. To do so, the Third Party Designee section at the bottom of Form SS-4 must be completed and the taxpayer for the third party designee must sign the form for the authorization to be valid.
Be aware that requesting an EIN by mail or fax takes some time so don’t wait until the last minute. The IRS’s estimated response time is approximately four weeks for a form sent by mail and one week for faxed forms.
Alternately, international applicants may apply for an EIN by phone at 267-941-1099 between the hours of 6 a.m. to 11 p.m. Eastern time Monday through Friday. The individual calling must be prepared to answer questions relative to Form SS-4 and be authorized to receive the EIN on behalf of the foreign Corporation.
Other Considerations
While it’s a little more complicated to get an EIN for a foreign company than it is for one formed in the United States, the process will go smoothly if you’re well-prepared. Careful attention to providing accurate and complete information on the SS-4 application will help avoid delays. The IRS may request more information, so keep your company details organized and prepare to answer questions.
If you have questions about submitting your EIN application, consider calling the IRS or talking with your attorney or accountant.
If you’d like to learn more about registering a US company as a foreigner, we have two great resource available at How to Start a Business in the USA as a Foreigner and Registered Agent Options for Non-Citizens.
