Starting a US company is a dream shared by many entrepreneurs from the Arab world, especially from the Gulf region, due to the unparalleled opportunities for growth and expansion in the American market. However, this dream can quickly turn into a series of problems and setbacks if the wrong steps are taken from the start.

In this article, we reveal the most common mistakes new founders make when starting a US company and guide you step-by-step on how to avoid them in a professional way that saves you time, money, and effort.

Mistake 1: Do You Think Starting the Company is the Final Step? One of the Biggest Mistakes When Starting a US Company

Do you know what the most common mistake people make after starting a US company is?
Many people believe that simply registering the company is enough to launch a successful business. They open a company, receive the paperwork, and then disappear! No marketing plan, no website, no services, no offers for their products or solutions.

Think of starting a US company like buying a brand-new car with no fuel!
Without a clear business, marketing, and operational plan, this car will remain stuck in place.
Do not proceed with starting a US company unless you are truly ready to launch with comprehensive, well-thought-out plans.

Mistake 2: How Choosing the Wrong Company Type Can Lead to One of the Biggest Mistakes When Starting a US Company

How can selecting the wrong company type lead to tax losses and regulatory complications?
In the US, there are various types of company structures, such as LLC and C-Corp. Each comes with its own tax and legal obligations, and you must select the one that fits your business nature

For example, a freelancer with no partners or external funding would be making a mistake by choosing a C-Corp structure, as this subjects them to double taxation and legal complexities that could easily be avoided. An LLC is typically a better fit, even for non-residents.
Therefore, fully understand the differences between an LLC and a C-Corp and consult a specialist before starting your US company.

Mistake 3: Why Choosing the Wrong State is One of the Riskiest Mistakes When Starting a US Company

Can the state you choose lead to financial losses?
The short answer: Absolutely yes!
Not all US states are suitable for every business. Some states have high taxes and operating costs, like California, while others, like Wyoming and Delaware, offer flexible environments ideal for non-residents.

For example, someone once started their company in California based on advice from local acquaintances and ended up paying thousands of dollars in avoidable taxes!

We helped close that company and establish a new one in Wyoming, reducing their annual tax burden to less than $100!
Therefore, you must select the state that best suits your business—not based on random advice.

Mistake 4: Incorrectly Applying for Your EIN – One of the Biggest Mistakes When Starting a US Company

What problems can occur if you apply for an EIN yourself?
The EIN (Employer Identification Number) is crucial for tax registration and opening a business bank account. Many people apply for it themselves online, but even a simple mistake, like a typo or missing digit, can lead to rejection—or worse, the IRS might issue an incorrect number!

This can trigger endless problems with the IRS and banks, and you may need to redo the entire process from scratch.
If you’re not 100% confident, you should work with a specialist who can handle the process accurately and avoid any mistakes.

Mistake 5: Neglecting to Open a Proper Bank Account – A Major Mistake When Starting a US Company

Why do you need a US bank account in the first place?
Without a US business bank account for sending and receiving payments, your company cannot function properly.
The easiest way to open a US bank account is with the help of someone residing in the US. However, not everyone has this option. Fortunately, this is not a problem! Fintech companies, which operate like digital banks, offer excellent solutions such as Mercury and Relay.

These accept non-residents without requiring an SSN—provided you have all your legal documents and a valid EIN. Missing documents can lead to rejection and delays in launching your business.

Prepare your paperwork thoroughly and consult an expert to help you choose the most suitable bank and guide you through the process.

How We Help You Avoid Mistakes When Starting a US Company

Whether you’re an entrepreneur, freelancer, or investor looking to enter the US market, starting a US company has become easier than ever—if you know the correct steps. At HFI Firm, we’ve helped hundreds of clients from the Gulf and the Arab world start their US companies legally, professionally, and without any issues.
Contact us now through the WhatsApp button on this page or fill out the contact form on our “Contact Us” page and start your US company today.

Frequently Asked Questions

1. Can I start a US company without living in the United States?
Yes, non-residents can start a US company, especially an LLC. However, it’s essential to have accurate documentation such as a US address, EIN, and official formation papers.

2. Is starting a company in Delaware or Wyoming suitable for all business types?
Not necessarily. While Delaware and Wyoming offer tax and legal advantages, the best state for your business depends on your activity, target market, and banking and legal requirements.

3. Can I apply for an EIN myself, or should I hire a specialist?
You can apply on your own, but common data mistakes can lead to issues with the IRS. It’s advisable to hire a specialist to ensure accuracy and speed.

4. What’s the difference between an LLC and a C-Corp regarding taxes and legal liability?
An LLC offers tax flexibility with taxes imposed only at the member level. A C-Corp faces double taxation at the company and shareholder levels. C-Corps are better suited for businesses seeking significant investment funding.

5. What happens if I choose the wrong company type or state?
The wrong choice can lead to unnecessary taxes, legal complications, or even the need to dissolve the company and restart in another state or structure—causing significant financial and time losses.

6. Can I start a US company without a US bank account?
Technically, yes. But practically, your company cannot operate or receive payments easily. A US bank account is essential for managing funds legally and professionally within the US financial system.

7. Can I use a virtual address to start a US company?
You can use a legal virtual address to form your company, but it must come from a licensed service provider. It’s preferable to have legal proof of usage to avoid banking and tax issues.

8. Do I have to pay US taxes even if I don’t live in the US?
It depends on your company type and income. In some cases, you may be exempt from federal taxes but still required to file annual reports, even if there is no actual income generated within the US.

BY Amjad Khaddam