A founder from Russia without a US residence permit came to us. The request sounded simple: «I want a Delaware company and to close a round from a foreign fund». In practice, behind this sits a chain of jurisdiction, banks, KYC, ownership structure and two tax perimeters - American and Russian. Below we break down how we assembled the entire legal part so that the entity was set up, the bank did not refuse, the investor signed the documents, and the founder got no tax surprises at home. The case is composite, without company names or personal names.
The situation: there is a product, but no legalisation
The founder had a working IT product, first paying customers in dollars and a verbal interest from a fund for an early round - around $500K in the form of a convertible instrument. What was missing was the main thing: a legal shell through which to accept the investor's money, pay contractors and breach neither American nor Russian regulation.
We immediately flagged three false beliefs the client arrived with. First - «without a green card you can't set up a US company». Second - «you have to physically come and visit the bank in person». Third - «if I'm a Russian tax resident, the American company doesn't concern me at home». All three are wrong, and each of them is a source of risk if you act blindly.
Basic fact. Citizenship and residency are not among the requirements for a founder of an American corporation. A non-resident may own a US company 100%. The difficulty is not in the fact of registration itself, but in the bank, compliance and the tax alignment of the two countries.
Choosing the form: why C-Corp, not LLC
For a founder planning to raise institutional venture capital, the choice is almost predetermined. Most funds invest in a C-Corp registered in Delaware - predictable corporate law and documents familiar to the investor. An LLC is more convenient for an operating business without venture money, but for a non-resident it creates an unpleasant tax effect on the US side. We captured the choice in a table.
| Criterion | LLC | C-Corp (Delaware) |
|---|---|---|
| Raising venture investment | Funds usually decline | Market standard |
| Tax at the company level | Pass-through (income «flows through» to the member) | Corporate tax on the company's profit |
| Effect for a non-resident | May trigger a personal obligation to file in the US | Tax perimeter closed at the company |
| Options for the team | Hard to structure | Familiar option pool |
| Convertible round instruments | Non-standard | Ready-made round templates |
Ownership structure: who holds the stake and through what
The most critical part is not registration, but how the founder holds the shares. Direct personal ownership is possible, but we laid out the options along three axes: asset protection, transparency for the investor and tax consequences in Russia. In this case we settled on a clean scheme that is clear to the fund: the founder owns the C-Corp shares directly, and the investor enters through a convertible instrument that converts into preferred shares in the next round.
Structure principle. The clearer the ownership, the faster the legal review by the fund passes. Any extra layer - a holding in a third country, nominee holders - the investor is obliged to unwind during due diligence. Complicating the structure is only worth it for a specific purpose, not «just in case».
Banking and settlements: where non-residents stumble
Registering the entity takes days. The real bottleneck is the bank account. The bank or payment provider runs the founder through KYC, and this is where a non-resident is refused most often: no local address, no social security number, an opaque source of funds. We went through this block step by step.
- EIN - the company's tax number. It is obtained without personal presence and without the founder's social security number. Without an EIN you can't open an account, so this is the first step after registration.
- Identity and address confirmation. We assembled the KYC package in advance: passport, proof of residential address, a description of the business and the source of funds. Inconsistencies in these documents are a frequent reason for refusal.
- Choosing a provider for a non-resident. Not every bank works with a founder without a local presence. We selected those who open an account remotely and don't close it after the first large incoming payment from the fund.
- Readiness for deal-related queries. The arrival of the investment is always a trigger for a check. We prepared the round documents in advance so the payment wouldn't «get stuck» in compliance.
Compliance: sanctions, KYC and source of funds
For a founder with a Russian passport, compliance is not a formality but a zone where the deal can stop out of nowhere. We checked three levels before filing the documents, so as not to get a refusal once the account was already open.
- Sanctions screening. We checked the founder and related persons against open sanctions lists - to rule out stop factors before any contact with the bank and investor.
- Source of funds and product. We prepared a transparent narrative of the source of money and the product's history: first customers, revenue, absence of assets under restrictions.
- Beneficiary disclosure. We prepared the ultimate owner data in advance in the form the bank and the fund will request during their checks. Matching versions speed up the process.
Where it most often falls apart. Not at company registration, but at the junction of «bank plus a large incoming payment from the fund». If the documents on source of funds and ownership structure aren't ready in advance, the account can be frozen exactly when the investment arrives. This is solved by preparation, not by reaction after the fact.
Two tax perimeters: the US and Russia
The founder's most dangerous misconception was the third one: «an American company means only American taxes». In reality, a Russian tax resident must account for the foreign company at home as well. Here the controlled foreign company (CFC) rules apply. They can't be ignored: missing the notifications carries separate penalties unrelated to the amount of profit.
- On the US side. The C-Corp pays corporate tax on its profit. The tax perimeter is closed at the company, not at the founder's person - this is one of the advantages of the form for a non-resident.
- On the Russian side. Control over a foreign company gives rise to an obligation to file a notification of participation and then a CFC notification, and where there is undistributed profit above the threshold - to account for it in the personal tax return.
- Dividends and withdrawing money. Any distribution from the company to the founder is a separate tax event in Russia, which we built into the model in advance rather than discovering after the fact.
The key risk of the case. Staying silent about the CFC doesn't save tax, it adds penalties. A Russian founder of an American company remains within the Russian tax field as long as he is a Russian tax resident. We built the structure so that both perimeters are closed and aligned with each other.
The investment deal: how we accepted the fund's money
We structured the round through a convertible instrument - this is faster and cheaper than selling preferred shares at an early stage, and familiar to the fund. The money comes in now, and conversion into shares happens in the next round on pre-agreed terms. In parallel we closed the corporate hygiene without which the investor won't sign the documents.
We put the charter, the shareholder register and board resolutions in order - the investor first checks that the company is legally clean and the shares were issued correctly.
We secured that the intellectual property belongs to the company, not personally to the founder or contractors. Without this the fund's due diligence stops.
We agreed the valuation cap, the discount and the conversion trigger. We fixed that the instrument converts into shares in the next round rather than giving the investor control immediately.
The fund's payment went through the prepared account with the compliance package assembled in advance - without getting stuck in the check.
Setting up a US company without residency is not a trick but discipline. The difficulty is not in registration, but in making the bank, the investor and two tax systems see one and the same transparent structure.- From G-Invest's legal support practice
Result
The founder received an American C-Corp with an open account, a clean ownership structure and a closed round - all without a residence permit and without a personal visit to the bank. In parallel we closed the Russian perimeter: CFC notifications and the tax model of distributions were accounted for in advance rather than left for later. The company is ready for the next round without reworking the structure.
What to take away from the case. Residency is not an obstacle. The obstacle is fragmentation: when the entity is set up in one place, the bank is sought in another, and the Russian taxes are remembered a year later. The structure works when the company form, the bank, compliance, ownership and both tax perimeters are assembled as a single project.
Frequently asked questions
Do you need a residence permit or citizenship to set up a US company?
No. A non-resident may own an American corporation 100%. The difficulty is not in registration, but in opening a bank account, passing KYC and aligning the taxes of two countries.
Which to choose - LLC or C-Corp?
For a venture round - a Delaware C-Corp: it's the standard for funds and closes the tax perimeter at the company. An LLC is more convenient for an operating business without venture investment, but for a non-resident it may create an obligation to file personally in the US.
Where does the process most often fall apart?
At opening the account and at the first large payment from the investor. The bank runs the founder through compliance, and without a package on the source of funds and ownership structure ready in advance, the payment can get stuck or the account can be frozen.
If I'm a Russian tax resident, does the American company concern me at home?
Yes. The controlled foreign company (CFC) rules apply: you need to file a notification of participation and a CFC notification, and if the undistributed profit exceeds the threshold - account for it in the personal tax return. Missing the notifications carries separate penalties.
Can it all be done remotely?
As a rule, yes. Registration, obtaining the company's tax number and opening an account with a number of providers happen without personal presence. The main thing is to prepare the documents for KYC and compliance in advance so as not to get a refusal.
We'll build your US structure turnkey
G-Invest will set up the legal part of your US entry: the entity form, bank and compliance, ownership structure and the alignment of US and Russian taxes - so the company accepts investment without refusals and stuck payments.