• September 2019
    M T W T F S S
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How Does a Foreign Citizen Set up a Company in the US with a Registered Trademark?

There are actually two parts to your questions: (1) how do you establish a company in the US as a foreign citizen, and (2) how do you register its trademark.

It’s a great question and we help with time to time on LawTrades. However, there’s not enough information to answer it the way you need it to be answered so you can make the right decisions.

  • It really spawns so many other questions:
  • Why do you want to set up a business in the US?
  • Do you already have a company in Germany and want to set up a US branch?
  • Or would you be a startup – a brand new business just starting out? Have you taken any steps outside the US to protect and register your trademark, or will this be a first time registration anywhere?
  • Will you be working at the company inside the US?
  • Do you currently have US visa status?
  • Would you need a visa?
  • What kind of visa would you need: investor, immigrant, nonimmigrant?
  • If so, would you be seeking residency or possibly citizenship?

In addition to many other legal questions, there are tax questions you should be asking a tax lawyer or CPA so you can identify which corporate structure would be serve your financial interests. If you’re a small company with no plans of raising enormous amounts of future financing and you’re not planning on taking your company public, then an LLC would probably fit your needs. On the other hand, if you are considering becoming a publicly traded company, then a C-corp is probably the best option. And while others have said an S-corp might be an option, it is not one that’s available to foreign ownership.

So while you could do it yourself, you would taking some rather large risks that might result in very significant costs – expenses that could be avoidable if you engage legal counsel. This is because you need someone who’s trained to ask you the right questions so you can be properly guided to the answers that are right for you.

When you do-it-yourself (DIY), you don’t know how to identify the issues or what questions to ask.

The price range is very broad – and it can be scary when you look at the high end. That’s what makes DIY sites like LegalZoom so appealing: the ability to use legal forms and cut out high-priced lawyers.

Without criticizing LegalZoom or any similar service, I’d urge you to look at the disclaimers on the DIY sites since there are some pretty weighty caveat emptors that’ll quickly reveal their limitations. The risk of using DIY legal forms is that they’re standardized, so they don’t take into account your unique circumstances and situation. They don’t ask you questions tailored to your needs and the context of your business. They don’t identify the 360-view of what your business needs – legally and financially.

These deficits can be dangerous, leaving you and your company vulnerable to unintended legal and tax consequences. Regrettably, this isn’t an uncommon outcome.

However, there’s a broad range of options available to you between making this a DIY project on the one hand and using a high-powered law firm that could be overkill for your project (and budget!) on the other.

As a startup entrepreneur, I experienced the same frustration about accessing and offering high quality legal services at affordable rates. That’s why I started LawTrades – to offer startups access to premium legal services on par with prestigious law firms, but at reasonable rates.

One of the most expensive areas of legal specialty is IP work. IP lawyers are among the highest paid in the industry. At the same time, protecting your trademark is crucial to your business. Not only is it a valuable property asset, but it’s also your brand – which is your reputation. Since filing trademarks is highly technical, it’s easy to make a mistake when DIY-ing this, so I would caution against those options. Small mistakes – especially with filing trademarks and patents – often result in big consequences.

Complex transactions such as trademarks – and intellectual property in general – by their very nature don’t lend themselves well to fitting neatly within the four corners of boilerplate legal documents you buy on the cheap. Furthermore, law and regulations are fluid; their constant change means that you could miss some vital updates that result in a faulty or incomplete application.

However, as Yoav correctly pointed out, if all you need to do is protect your trademark or other intellectual property, you don’t need to incorporate a company in the US to do this. So that begs another question: do you simply need to just register your trademark?

None of this is intended as legal advice, since you really need a qualified attorney to ask you the questions that will help you and your business.