Author: shradha chhatre

Jumping into the U.S. market from India? When it comes to EIN, ITIN & banking, it’s a big opportunity—but you’ve got to get a grip on some key administrative and financial systems first. For Indian entrepreneurs, there are two essential identification numbers you need to know: the Employer Identification Number (EIN) and the Individual Taxpayer Identification Number (ITIN). Not to forget, you’ll also need to secure a U.S. business bank account. Together, these elements are like the backbone of a successful and compliant U.S. operation. Now, let’s break it down a bit: what’s the difference between an EIN and an ITIN? This can be a bit confusing for newcomers. Both are issued by the IRS but serve different functions. Employer Identification Number (EIN): Think of the EIN as your business’s Social Security number. It’s a nine-digit number assigned by the IRS for tax and administrative purposes. You need an EIN to do a few important things: – Open a U.S. Business Bank Account: Most banks in the U.S. will ask for an EIN before they let you open a corporate account. – File Business Tax Returns: Your EIN is how the IRS identifies your company when it’s time to file those federal tax returns. – Hire U.S. Employees: Planning to build a team in the U.S.? You’ll need an EIN for payroll and employment taxes. Individual Taxpayer Identification Number (ITIN): This one’s for individuals who need to file U.S. taxes but don’t qualify for a Social Security Number (SSN). The ITIN is also a nine-digit number, and it’s strictly for tax reporting. You won’t need an ITIN just to get an EIN, but if your business structure is something like a single-member LLC—where the profits and losses go directly to you, you might need an ITIN for your personal tax return. Here’s a step-by-step guide: 1. Form Your U.S. Business Entity: First things first, you need to register your business in a U.S. state. Many foreign entrepreneurs go with a Limited Liability Company (LLC) because it’s flexible and has pass-through taxation benefits. States like Delaware and Wyoming are popular due to their friendly business laws. 2. Obtain an EIN: If you don’t have a U.S. SSN or ITIN, you can’t apply for an EIN online. But don’t worry, the IRS has a couple of ways for international applicants: – By Fax: You can fax a filled-out Form SS-4 (that’s the application for an EIN) to the IRS’s international fax number. It’s usually pretty quick; you might get your EIN back within four business days if you include a return fax number. – By Mail: Another option is to mail the Form SS-4 to the IRS. Just keep in mind this is the slower route—processing can take about four weeks. 3. Apply for an ITIN (if you need one): If your business setup means you’ll be filing a personal tax return, you’ll need to apply for an ITIN using Form W-7. This has to be sent along with a U.S. tax return and certified copies of your ID, like your passport. To make things easier, many entrepreneurs team up with an IRS-approved Certified Acceptance Agent (CAA) in India, who can verify your documents, so you don’t have to mail originals. U.S. business bank account: Once your business is registered and you have your EIN, this step is crucial. You’ll need a U.S. bank account to accept payments from clients and manage expenses properly. It used to be that you had to visit a physical bank branch to set up an account, which was a real hassle for non-residents. But these days, more and more fintech companies and modern banks offer remote account opening options. You can set up a U.S. account from India with a few documents: – Your business formation documents (like the Articles of Organization) – Your EIN confirmation letter – A valid passport plus another form of ID – A U.S. business address (this could be a virtual office or your registered agent’s address) Platforms like Wise and Payoneer are gaining popularity, too. They give you U.S. receiving accounts, letting you accept payments from U.S. clients just like you had a local bank account—often with lower fees than traditional wire transfers. Key Takeaway: Launching a U.S. business from India is totally doable with the right strategy. By understanding how the EIN and ITIN work, following the correct application steps for non-residents, and taking advantage of modern banking solutions, you can set up your financial and administrative framework smoothly. Consulting with a U.S.-based CPA or legal professional can provide tailored guidance and help ensure full compliance from day one. shradha chhatre