Problems establishing a "US entity"
 

Is anyone else from outside the US struggling with getting a US business tax id for the Visa forms for their US IPSP?

I've heard a lot of people say it is a piece of cake, but my lawyer and I are running into nothing but problems. Has anyone done this succesfully in the last 2 months? A lot has changed since 9/11/2001 and I don't think this is all as easy as some have said.

It now appears that to get a US business tax id, the principle owners are required to get a personal ITIN if they are foreigners. This requires that one fill out a W-7, which in turn requires 4 to 8 weeks, and identification documents notarized by a US notary public - which in turn requires a trip to the US or a US consulate/embassy.

Has anyone out there from outside the US successfully established a US business entity since 9/11 (including US tax id as the Visa forms seem to imply you need)? If so please share your experience.

Not to sound like a scaremonger, but I'm really starting to get a bad feeling about all this - this could be a damn disaster for international webmasters whose strategy was to do what Epoch, IBill and CCBill advised.

If its going to take you that long to setup your shell - have you considered partnering with a US based company?

important thread, hope some more people contribute what their
experiences are. Because most people do seem to think this is a fairly simple process which you are suggesting ain't so simple no mo'.

what is your lawyer telling you about the definition of a 'presence' in the United States? I've read some opinions that it means you have some employees, not sure if one is enough, in the United States. And i don't think somebody a third party provides to answer a phone for a bunch of different foreign webmasters is going to be enough if they are requiring you have an American resident 'staff'.

Canadians might want to use Glo-Bill for a little while if it looks like time is going to be a factor against you.

CoolE, our US lawyer says that VISA has stated that the company and its principals must be located in the jurisdiction of processing. So if you or are incorporating in the USA because of the VISA rules, make sure the principals of the new US company are not foreigners or you will not comply with the new VISA rules.

I have heard a few people mention what CoolE has said above and that a W-7 registration is required. It will maybe take two months to do this.

I have also heard interpretations of this registration in which after obtaining the ITIN that person would be obliged to report all earnings worldwide to the IRS.

In any event for a Canadian webmaster who has no options in his
region this is bad news. If you are lucky to get everything sorted out by November 1st you may just find that you are not compliant anyways simply because your new LLC is foreign owned. And of course you may be stepping into a taxation nightmare.

I would put the probability of any Canadian webmaster holding on to their rebills or even their businesses at a pretty low order.
And to top it off I am aware that many of the larger companies are
working very hard to shut down any loophole IPSP's that might be exploited. Probably the only option will be obtaining one's own merchant account, but even this may be against the rules for Canadians.

I hope I am wrong, and I hope anyone who has any ideas will post them. My current IPSP seems to have adopted a clenched mouthed and liability limiting "if you can't meet the requirements, whatever they are, you are fucked" attitude.

It's simply OUTRAGEOUS that there has not been more precise information from the processors about this.

You can use my tax ID for 10%

:winkwink:

i'd get a second opinion with another lawyer

it does sound to me like the best thing a Canadian can do for now is go with Glo-Bill or some other company that is affiliated with VISA International rather than VISA USA while the dust settles. Let somebody else be the guinea pig. I still think in the long run Glo-Bill ain't going to be the answer either cuz VISA International is likely to follow what VISA USA does. But I'm not
up on VISA so maybe the Euros will be happy to have the money that VISA USA will be leaving on the table by bailing on Canadians and others.

Canadian government failed their entrepreneurs. It is ridiculous that banks in Canada cannot provide high risk merchant accounts.

Well thanks for that info. It doesn't sound very good. I haven't been able to find a single "foreigner" who has been able to set up a US business (as the "principle", or majority owner) in the last few weeks.

As for some of the questions...

Still waiting for word from CCBill as to what Visa and the acquiring banks consider to be a "presence", but we have been assuming it may mean:
1. A US company with a head office address and at least one "contract employee" - easy enough to do through a full-service LLC agent.
2. A Tax ID Number for that business - turning out to be time-consuming and tricky as I said, if you, the principle owner are not American.
3. A US business bank account corresponding to 1 and 2. Many Nevada banks will no longer open accounts for businesses owned by foreigners, but we have found two. One requires that the owner show up in person to set up the account (sign the card).

But the big unknown is as Petr said, that Visa USA may even require that the principle owners be American. If that is the case then even 1, 2, AND 3 are not enough, and it is game over for Canadian internet entrepreneurs who are looking for a stable longterm billing solution, as according to CCBill and others, there is no acquiring bank in Canada that will back high-risk merchants.

Could not agree more. Canada is the worst country in the world if you are a small-business owner or consumer advocate - both are considered nothing but trouble-makers up here. The US congress talks all the time about consumer/small-biz issues such as fraud, spam, anti-trust activities, and yes, credit cards and banking. In Canada this stuff is not even on the radar screen. It's aboriginal rights, socialized medicine and universal access to marijuana. As a result, our financial institutions are not so much banks as they are public relations firms.

CoolE, have you heard anything about the potentiality of purchasing an existing shell that has a tax ID?

My ICQ is 17249164 if you would like to compare notes on any of this.

quiet must be pretty pissed reading this thread

I been telling you guys what to do. Does everybody on this board have Dane Brammage?

Forget about the lawyers they are leeches and will just suck money from your wallet.

Find a Full Service Resident Agent, one that has a corporate strategist.

Talk to them, ask questions.

Lawyers don't know about tax laws and all that IRS SHIT!
Corporate Strategists do.

Here's what I posted before. I'm not Spaming, I just want to give you guys some information.
~~~~~
Incorp Services, Inc. is one of my clients and they have a special Deal for Foreign Webmasters that need to form a Nevada corporation.

They will draft your articles, file them with the Secretary of State, the only fee you pay is the State fee of $175USD or $275USD if you require it to be expedited.

Corporate Records Book, Seal and stock certificates is $75 additional.

Resident Agent service is $49 first year $99 there after. Service includes free domestic mail forwarding. Canadian mail forwarding is $100 + postage.

Their website is www.incorpservices.com

They can be reached toll free at 1-800-2-incorp

Call for details - ask for Doug and mention the Foreign Webmaster Package.

They currently serve as Resident Agent for over 5000 Nevada corporations.

So Call 'em.


Trailboss

not really, this is pretty much what i've been saying all along...

This issue is not with the filings in Nevada but rather with obtaining the Tax ID after the incorporation.

I will give them a call anyway to see if they can offer an opinion on getting the Tax INfo and the bank account if required.

You have more rebills than I quiet, but I have a good-sized bunch - too many to just walk away from. What is your approach?

I have a close American relative that I trust completely, but hell it's a lot to ask to have them own my porn company for me; it's the legal risk.

Trailboss... A Nevada LLC agent will do nothing to get me a business tax id and bank account number. Nothing. The business tax id appears to be a MUST for the Visa form if you don't have a SSN.

Shoplifter, that is an interesting idea... I'm going to discuss that one with my lawyer.

Shoplifter,

They get you the EIN.

They are full service.

Call them and forget about the rumors other people post here.

Alot of places will provide you with nominee directors etc so that you arent even a director, or they start out as director and then resign once everything is established.

In a Nevada corp shareholders arent reported so Visa cant verify who owns the company.

CoolE,

Are you crazy or something? Why would you want to form an LLC?

Just wondering.

Give me your thoughts.

If you are looking for a bank try www.thebancorp.com - they arent in Nevada but I dont believe that really makes a difference. They dont have any branches but they seem to be pretty good so far. I moved to them about 8 weeks ago and so far so good, and it was all set up by mail and fax, I didnt have to go there at all.

trailboss,

what you fail to realize that is only half the battle

if you gonna deal in high volumes say like over 20k a month
then chances are they are gonna want to confirm a onsite survey of your location,, ie check for office equipment, personal, computers, building, business licence and etc, etc

i know cuz this is what i had to go thru

quote:
--------------------------------------------------------------------------------
Originally posted by quiet

not really, this is pretty much what i've been saying all along...
--------------------------------------------------------------------------------


You have more rebills than I quiet, but I have a good-sized bunch - too many to just walk away from. What is your approach?

I have a close American relative that I trust completely, but hell it's a lot to ask to have them own my porn company for me; it's the legal risk.

Trailboss... A Nevada LLC agent will do nothing to get me a business tax id and bank account number. Nothing. The business tax id appears to be a MUST for the Visa form if you don't have a SSN.
-----------------------------------------------------------------

I have a business account with 2 business's on it
2 Diff. Company's both are Sole Proprietor and I use it for
personal also. I've Had it for years with Bank of America. I use to run over 350K per year thru it a few years ago. I have NO ideal if I can help you or not. I really do feel sorry for some you people. I have never met any of you in person, but the last I would want is to get myself in any trouble. Well not very much anyway's.

It would be nice if one of the billers would confirm what is actually going to be required as presence wouldnt it.

As you contemplate these important and complex issues, remember to ask yourself: What would Jesus do?

Playa ,I'm not sure what paranoid issue you are talking about.

You can email me at [email protected] with any question you have about a US presence and tax questions.

If I can't answer them I'll send your questions to someone who can answer them.

Unless for reasons of retaining current rebilling, there is no reason on earth why any international webmaster should want to incorporate in the United States or deal with any US domestic processor.

Incorporating in the US is just jumping from the frying pan into the fire and is no solid basis of building a business. There are
complications to incorporating, apart from providing never-ending information and accepting the laws/rules of the US, such as 30% withholding tax blah.

There is a big world out there, the net is not the US, and far more beneficial jurisdictions to incorporate a business and utilize credit card processors. Sadly the processors/VISA/whoever in the US have failed and once is enough.

CoolE:

*Not to sound like a scaremonger, but I'm really starting to get a bad feeling about all this - this could be a damn disaster for international webmasters whose strategy was to do what Epoch, IBill and CCBill advised.*

This idea of incorporating in the US was their "solution", based on the VISA rules being enforced there. If you have recurring billing with them, then there is, at least right now, a problem. If not, don't touch them with a bargepole.

OK.. their "solution" was to enable you to continue trading with them and have you remain a client, but this is just inadequate, unstable and costly in both money and time.

Hey, Im in canada atm, i used ibill for the past 4 years, ive found a billing solution i think, i went to ynotnetwork and the top link is probilling.com, and by my luck its in the same city as me. the popup also says they are exempt from the isps laws so im going to give them a try, also i e-mailed the other top 4 on ynotnetwork and they all said they too are exempt from the new isps laws... my only problem is now i have 400 members at ibill and im going to loose them on november the 1st... anyone want to offer me something on them? or is there any way to transfer them to another person? is it even legal heh.

Anyway if you have any ideas about the ibill members give me a icq id be interested in a partnership maby,alot these members are over 2 years+ members ;)

31828292

The rebills are the problem for most.

I dont know of anyone that "wants" to set up in the US..

i am not paranoid,, its a fact,,

i live in the US formed my own company and have my own merchant account and this is what they did to me,,
they had to check everything and having office space is very important

Sounds like there are going to be a lot of major lawsuits after Nov. 1.

I was told that obtaining an EIN may take up to 6 weeks. But when reading Form SS4 instructions I saw a phone number for callers from outside the USA... Just call the number and get your EIN instantly on the phone, I did so... But this EIN is also given for companies not formed in the USA I believe, and it starts with 9. I'm not sure if Visa will accept this... I haven't filled the W-7 form, I'll check what it is from irs.gov


Call 1-215-516-6999, but make sure you have completed SS4 form. Operator will ask you to fax your SS4 and a copy of your passport (pages showing your picture, expiry date and passport number)... You should fax the documents while you are on the phone, because your fax may get lost in their large office.

I couldn't do anything with finding a US citizen principal yet.

I know my experience is different - as I am in the US, but I recently set up 3 new corporations - and was able to get TINs on the phone (actually my accountant was as I was sitting there) as Adonis suggested.

Good luck...

This post by trailboss is exactly the kind of thing webmasters need to be wary of. The only lawyers who can define "US entity" or "US presence" are the lawyers for VISA, and until they do, with particularlity that allows adult webmasters to latch on and take action based on those definitions created by VISA, then any quickfix action taken may be money down the drain.

I am still drowning with literature and emails based on these new changes, and still cannot decipher the VISA crap. The worst thing about this entire situation is the vague "requirements" that they set forth when they issued these new rules.

That is very interesting info Adonis. Thanks for it. Can you elaborate? The instructions for the SS-4 form say "You are required to enter a SSN, ITIN, or EIN unless the only reason you are applying for an EIN is to make an entity classification election (see Regulations section 301.7701-1 through 301.7701-3)"

But you submitted yours without any of those numbers and they had no problem?

Line 7b asks for an SSN or ITIN... IRS operator told me to fill it as "PASSPORT COPY FOLLOWS", so did I and added a passport copy to my fax.

Today is Columbus Day and IRS is not working until Tuesday. You'd better call them at once tomorrow.

I got a personal ITIN number from the IRS when I was in flordia in Aug - it arrived about 2 weeks ago. to give you an idea of how long it takes.
I knew it would come in handy. I got it just for safty reasons on my CAs advise (being canadian and getting US money I wanted to file a return in the USA so that they won't decide I was skipping out on my Taxes - basically it tells the IRS I paid my taxes to Revenue Canada, and since canada and USA have tax treaties they can't come after me if I file US income in canada and pay the tax there)

Can anyone confirm how long it would take a US citizen (nominee director) to obtain an EIN for a new LLC from inside the USA?

takes like 30 minutes and 25 of that will be on hold,,

you then get your EIN over the phone then you will have to FAX the form to them

I have an idea,,

My kid needs a job

I am willing to pimp him for 3k per month as your employee

We even get you a PO Box and forward your mail

He doesn't mind working for a foreigner ;-))

Here is your presence if you need it.

A fuck it, I do it for 500 bucks per month. I would be considered a subcontractor working for your company and you wouldn't have to pay any of my taxes etc.

I can be a secretary ;-)) I even have an office

18314311 is my ICQ if anybody is interested.

the United States is not a good place to do buisness. many people you cannot trust there. I will move my buisness soon.

Non-US webmasters,

They will ask for a corporate US bank account. But agents say it takes 2-6 weeks to open an account.... Can you recommend websites which can do this faster, and better before the 1st of November ?

Hello!

Just a few words from a swedish webmaster!

First of all ccbill and ibill will as they belive right now be able to
continue to process for Non US webmaster but probably for alittle higher processing fee.

One week ago I contacted a company in the US to help me setup a LLC in the state of delaware (less rules there).
I filled out some info and signed a power of attorney for them
to fill in all neccessary papers to start a LLC in delaware AND to get a TAX ID. I was supposed to get the ID yesterday, cause it
should only take about 4-5 days. Guess it will be here later today or tomorrow. (US had holiday monday, right).

Go to google, search for incorporate + LLC and a long list
of companies that can do this for you will come up!
You still have time.

Regards, Jeroman
Legcash.com

You can have a nominee check signer which is around $3k while you are waiting, but this will fix bank account ready for deposits.

I think when someone makes an announcement like this they should credit their sources. When did Ibill say anything about this?

As well looking at other posts here I am wondering who said that a USA based bank account would be required? IRS filings possibly but bank account?

Someone had mentioned nominees...Getting a US Citizen nominee
to sort out the tax ID and bank account is pretty well the only way to go. A US citizen acting as agent can do all this in a few days.

This information came from Ibill last week via phone conversations with account reps , a couple of people posted about it, I was one of those.
A few days later we were told that we should get a US presence anyhow as no new information had been heard on the foreign banking relations front.

I spoke to Ibill a few hours ago and was told that they are still trying hard to establish in other regions but are not saying much about it yet as they dont want to leave people hanging on waiting for it to happen only to see it fall through at a stage when its too late to setup in the US.

So, they are still recommending a US corp and tax id but they are quietly still trying to secure international relations in the background..