In the expansive realm of business and financial transactions, the term "EIN" frequently arises, and for good reason. The Employer Identification Number, or EIN, is a crucial identifier for any business entity operating in the United States. While it may seem straightforward for U.S. residents to obtain an EIN, non-U.S. residents face a labyrinth of regulations and requirements.
But fear not! We’re here to assist you every step of the way. In this comprehensive guide for 2023, we will demystify the process and clarify how non-U.S. residents can successfully obtain an EIN number through a series of steps.
Whether you’re an international entrepreneur seeking to establish a business in the United States or simply navigating through the complexities of the U.S. tax system, understanding how to secure your EIN is essential.
Join us on this journey together as we equip you with all the knowledge necessary to flourish in America's business landscape.
What Is an EIN Number?
The EIN, also called the Federal Tax ID Number, is a unique 9-digit identifier issued by the IRS. Its primary function is to enable the United States federal government to distinguish businesses for tax-related matters.
To comply with regulations, any business that has registered employees in the U.S. as a partnership, multi-member LLC (Limited Liability Company), or corporation must possess an EIN. Foreign companies operating within the U.S., whether involved in e-commerce or acting as Amazon seller, must obtain an EIN for income reporting and tax payment purposes.
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EIN vs. SSN vs. ITIN
The Internal Revenue Service (IRS) issues various types of federal tax ID numbers, including the Employer Identification Number (EIN), Social Security Number (SSN), and Individual Taxpayer Identification Number (ITIN). However, eligibility criteria for these numbers vary.
Employer Identification Number (EIN)
When a business owner lacks an ITIN or SSN, they rely on an EIN for tax purposes. When importing goods into the United States, business owners must present an Employer Identification Number if they don’t possess an ITIN or SSN.
EINs are used for:
Submitting business tax returns
Establishing a business bank account
Handling payroll tax withholding, reporting, and payments
Establishing business credit for streamlined funding access
The EIN application (Form SS-4) requires the name and Taxpayer Identification Number (SSN, ITIN, or EIN) of the "responsible party" who oversees, manages, or directs the entity. This individual must be a person, not a business entity.
Social Security Numbers (SSN)
The Social Security Numbers serve as unique tax identification numbers that are specifically designated for U.S. citizens and individuals living in its territories. Note that foreign nationals aren’t eligible to obtain an SSN. For U.S. citizens, obtaining an SSN involves submitting IRS Form SS-5 for consideration and approval.
Individual Taxpayer Identification Number (ITIN)
The IRS issues ITINs to individuals who must have a U.S. taxpayer identification number but aren’t eligible to obtain a Social Security Number. An ITIN allows individuals, including residents and nonresident aliens, to comply with federal tax laws, such as filing tax returns and making tax payments. To apply for an ITIN, individuals must submit IRS Form W-7.
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Steps for Obtaining an EIN Number as a Non-U.S. Resident
Step 1: Determine Your Eligibility for an EIN Number as a Non-U.S. Resident
Prior to submitting an application for an Employer Identification Number (EIN), fulfill the necessary criteria as a non-U.S. resident. It’s required that you either possess an existing business or trade within the United States, or have intentions of commencing one in the near future.
In case you’re starting a business registered at the state level, such as a Limited Liability Company (LLC) or a corporation, wait until your business receives approval from the state before proceeding with your EIN application. This precautionary measure will help avoid situations where you apply for multiple EINs or need to file a Notification of Business Name Change due to rejection of your LLC or corporation paperwork by the state authorities.
Step 2: Obtain a Physical Mailing Address in the United States
Having a physical address in the U.S. isn’t mandatory to obtain an EIN, but it greatly simplifies opening a bank account in the country.
Step 3: Complete the IRS Form SS-4
Please fill out Form SS-4, which is the application used to obtain an Employer Identification Number. In this form, you will be required to furnish details related to your business such as its legal name, address, and personal information.
Step 4: Submit the Completed Form SS-4 to the IRS by Fax or Postal Mail
After finishing the IRS Form SS-4, you have the option to send it to the IRS via fax or regular mail. The correct address and fax number can be found on the IRS website. Include all required information and carefully verify its accuracy before submitting the form. If any mistakes are present, it could result in a delay in processing time or even rejection of your application.
Step 5: Wait to Receive Your EIN Number From the IRS, Which Typically Takes 4 to 6 Weeks
Once you have submitted Form SS-4, wait for the IRS to process your application and provide you with an EIN number. The processing time usually ranges from four to six weeks, although it may be longer during periods of high application volume. Once you receive your EIN number, store it securely as you’ll require it for tax-related matters.
Step 6: Notify the IRS if There Are Changes to Your Business
Once you have acquired your EIN number, keep the IRS informed about any changes that occur within your business. Specifically, this includes modifications to your business mailing address, business location, or the individual responsible for your business operations. Any alterations to the responsible party should be submitted within a 60-day timeframe.
To inform the IRS of these changes, you can use Form 8822-B which can be found on their official website. If your previous business address was located in Connecticut, Delaware, District of Columbia, Florida, Georgia, Illinois, Indiana Kentucky Maine Maryland, Massachusetts Michigan New Hampshire, New Jersey New York, North Carolina, Ohio, Pennsylvania Rhode Island, South Carolina, Tennessee, Vermont Virginia West Virginia or Wisconsin then you’re required to send this form to Internal Revenue Service Cincinnati OH 45999-002.
If your previous business address was located in any of the following states: Alabama, Alaska, Arizona, Arkansas, California, Colorado, Hawaii, Idaho, Iowa, Kansas, Louisiana Minnesota, Mississippi Missouri Montana Nebraska Nevada New Mexico, North Dakota Oklahoma, Oregon South Dakota Texas Utah Washington Wyoming or anywhere outside of the United States then you will need to send the form to Internal Revenue Service Ogden UT 84201-0023.
By keeping the IRS updated about any changes to your address, you’re helping to maintain compliance with regulations and prevent potential penalties or fines.
How a Non-US Resident Can Get an EIN Number – Buyer’s Guide
Applying for an Individual Taxpayer ID Number (ITIN)
Many individuals hold the mistaken belief that a Social Security number (SSN) is a requirement for obtaining a business EIN. However, this assumption is incorrect as non-U.S. citizens who own businesses can still obtain a business EIN even without an SSN.
It's important to note that Social Security numbers are intended for individual persons while business EINs are designed for business entities, thus the IRS handles these two types of tax IDs differently.
Although it’s unnecessary to possess an SSN to register for a foreign EIN, having one simplifies the process. This is because acquiring an EIN online causes users to possess a valid Taxpayer ID Number. Non-U.S. citizens or "foreign persons" rarely qualify for a U.S. SSN. However, there exists another taxpayer identification option known as the Individual Taxpayer Identification Number or ITIN.
If you’re ineligible to acquire an SSN, you have the option of applying for an ITIN using IRS Form W-7. Getting an ITIN can prove helpful in your overall pursuit of securing a business EIN since it enables you to use the online IRS form when completing your application for the aforementioned tax ID specific to your business needs.
If your business is incorporated outside of the U.S., you won't be able to apply for an EIN online using your ITIN. The IRS explicitly states that "If you were incorporated outside of the United States or the U.S. territories, you couldn’t apply for an EIN online." Thus, it's unnecessary to obtain an ITIN in such cases.
Instead, there’s a separate process that must be followed to acquire a business EIN for businesses already incorporated outside of the U.S.. The specific steps for this alternative process are outlined below.
Applying for an EIN Without an SSN or ITIN
If you don't have an SSN or ITIN, you'll have to apply for an EIN by submitting Form SS-4 through mail, fax, or phone. Form SS-4 requires different details about your business, such as its U.S. mailing address, the type of entity (such as partnership, LLC or corporation), the purpose of obtaining an EIN and the industry that your business is involved in.
Apply By Mail
If international applicants don’t have a legal residence, principal office, or principal agency in the United States or its territories, they have the option to submit their completed IRS Form SS-4 by mail.
IRS Mailing Address for Foreign Applicants:
Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
Please be aware that obtaining a business EIN through mail from outside the United States can be a lengthy process, potentially taking several weeks. Once your application is received by the IRS via mail, it typically takes around four weeks for processing. Therefore, please consider that it may require additional time for your assigned EIN to arrive by mail.
Apply By Fax
International candidates can send their fully filled out Form SS-4 to the IRS fax line specifically designated for individuals residing outside of the United States: 304-707-9471.
Typically, it’ll take around four working days to receive an EIN after submitting a request through fax.
Apply By Phone
International applicants are the only ones permitted to apply for an EIN over the phone, as specified by the IRS. According to the guidelines provided on Form SS-4: "If you don’t have a legal residence, main place of business, or main office or agency in the U.S. or U.S. territories, you can call 267-941-1099 (a non-toll-free number) between 6:00 a.m. and 11:00 p.m. (Eastern Time), Monday through Friday, to obtain an EIN."
The person who contacts the IRS must be authorized to obtain an EIN either as the business owner or as a Third Party Designee with authorization to act on behalf of the business.
Preparing beforehand by familiarizing oneself with questions found on Form SS-4 can be beneficial to save time and ensuring a smoother overall process during the phone call. Assuming all information is accurate and complete, it’s typical for an EIN to be issued promptly at the conclusion of said call.
Alternative to Applying for an EIN Number
If you cannot apply for an EIN number or prefer not to, you could use a third-party service to obtain an EIN number on your behalf. This can eliminate much of the stress and worry involved.
BusinessRocket - Best for Quick Turnaround Time
BusinessRocket LLC is an experienced consulting firm that specializes in assisting entrepreneurs and businesses with the incorporation of their companies.
The services provided by BusinessRocket for new businesses include conducting name clearance for Limited Liability Companies (LLCs) and preparing and submitting articles of organization.
They also offer consultation services, compliance analysis, compliance guard alerts, and lifetime customer support. They provide legal aid, tax compliance solutions, and help with business entity registration.
Firstbase
Firstbase.io is a software service that enables individuals to establish a business in the United States from anywhere in the world, making it particularly beneficial for international entrepreneurs. Having been in operation for several years, Firstbase.io has successfully set up many US companies from 120 different countries worldwide.
By using Firstbase.io to create a US company, you will not only gain access to a US bank account but also be provided with a US address and an EIN (Employer Identification Number). This setup allows you to commence trading in your desired industry. In collaboration with online bank Mercury, your US bank account will be opened promptly upon completing the registration process on Firstbase.io.
Northwest Registered Agent
Northwest Registered Agent provides tailored help and professional solutions for businesses, which encompass registered agent services, compliance management, and document filing. Their expertise lies in LLC formation, offering continuous support and valuable resources to facilitate business growth while ensuring compliance.
As a reliable partner in LLC formation services, Northwest Registered Agent is committed to delivering exceptional support to their clients.
ZenBusiness
ZenBusiness is a digital platform specialized in assisting entrepreneurs and small business owners in launching and expanding their companies. They offer a variety of services to facilitate LLC formation, such as cost-effective packages that include registered agent services, annual report filing, and additional benefits.
ZenBusiness is committed to providing continuous support and valuable resources to ensure businesses remain compliant with regulations while achieving success.
Bizee (Previously Incfile)
Bizee specializes in delivering prompt and cost-effective services for LLC formation. They have a range of packages available, which encompass registered agent services, compliance management, and document filing.
Bizee's platform is user-friendly and efficient, ensuring that forming an LLC is straightforward and stress-free. They offer ongoing assistance and valuable resources to aid businesses in maintaining compliance and achieving success. With their emphasis on affordability and convenience, Bizee emerges as an outstanding choice for LLC formation services.
How a Non-US Resident Can Get an EIN Number – FAQs
Can an Immigrant Get an EIN Number?
Immigrants, irrespective of their legal status, can make a living by working as self-employed professionals or launching their own business using an ITIN, EIN, or SSN. People also can gain an EIN to establish a business identity and employ staff members. An ITIN can be used for obtaining an EIN.
How Long Does It Take To Get an EIN as a Non-Resident?
Please be aware that requesting a business EIN (Employer Identification Number) by mail from outside of the United States may take several weeks to process. Once the application is received by mail, it typically takes the IRS four weeks to process it. Therefore, please allow for additional time for the assigned EIN to be delivered by mail.
Is Foreign TIN the Same as EIN?
No, an EIN (Employer Identification Number) is different from a foreign Tax Identification Number (TIN). A TIN is provided by a foreign government, whereas the IRS issues an EIN for businesses that operate in the United States.
The primary distinction between an EIN and an ITIN (Individual Taxpayer Identification Number) or TIN is that an EIN is used for business entities, while an ITIN or TINGet used for individuals. A TINGet employed to identify individuals who are subject to taxation within the United States.
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Bottom Line
Acquiring an EIN number as a non-U.S. citizen might appear intricate, but with proper assistance and comprehension of the prerequisites, it’s completely attainable. Remember that possessing an EIN can unlock many possibilities, like establishing a business based in the U.S. or investing in assets within America.
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Disclaimer: The above is a contributor post, the views expressed are those of the contributor and do not represent the stand and views of Outlook Editorial.
