In this blog post, we will cover whether establishing a US company is required to sell on Amazon US or not.
In the early stages, starting a company is not necessary to sell on Amazon US. However, if you exceed a certain sale threshold, Amazon will require you to submit the details of your company located in the US to tax these earnings. That means you’ll need to establish your company eventually. So, after establishing your US company, creating a store on Amazon US and closing sales will be more regular. Your store will look more credible compared to individual sellers. Your account will be prevented from being closed by Amazon, which would increase your sales.
Starting a US company
Establishing a US company and getting tax numbers takes an average of 2 months. You can complete the processes swiftly by paying additional fees. However, since speeding up the process will financially cause a dramatic change, the best thing to do is to set up the company when starting sales or apply for company establishment at the right time by following the sales volumes closely.
Delaware is frequently the preferred US state for company establishment. The main reason is that a company does not pay sales tax if there are no in-state sales. Starting a business in Delaware offers many advantages. One of them is that if you establish a company in Delaware (there are other states exempt from sales tax), the primary taxes you will pay are the franchise tax paid to the state in June each year and the federal income tax filed between January-March.
To sell on Amazon US, you can establish an LLC (Limited Liability Company) or general corporation in any state you want. After setting up your US business, you can apply for an EIN. You can apply to open a bank account when you receive this tax number. At this point, there are institutions such as Brex, Mercury, and Payoneer where you can open an account and get a debit card easily.
Establishing your US company, obtaining an EIN, opening a bank account, and providing a company address means having all the information Amazon requests regarding your company. From then on, you can securely submit your details to Amazon and continue making sales. You are all set.
That said, there is only one tax-related process you need to perform, excluding the declaration and tax payments, after completing all the company establishment processes in the US. All US taxpayers file their income tax returns with their SSNs. Citizens, particularly resident aliens, without an SSN have to file their income tax return with an ITIN. You must apply for an ITIN before tax season.
Establish your US company with Workhy instantly!
Workhy enables people seeking to reach potential markets to set up an online business without getting citizenship, flight tickets, visas, and official procedures! Suppose you want to establish a company to sell on Amazon US. In that case, you can benefit from advantages by receiving Workhy’s services such as company establishment in the US state of your choice, Legal Representation, Monthly Accounting Service, EIN, ITIN, and Federal Income Tax Return. If you have any other questions, you can always contact us via [email protected].