So how do I establish credit card processing facilities for my U.S. business?
Take it one step at a time. Each step brings you closer to accepting credit cards, but you must invest time and money first to prepare the foundation of your merchant application regardless of what service you will use:
- STEP 1: Register your U.S. company;
- STEP 2: Lease a U.S. address with mail forwarding;
- STEP 3: Open a U.S. bank account (unless you can't, in which case you would be limited to certain high-risk merchant account providers);
- STEP 4: Build a professional website for your business, clearly showcasing your business;
- STEP 5: Research the list of Online Payment Service Providers, and try applying for an account with each one in turn, until you find one that will accept your application.
- STEP 6: If that fails or you are not interested in this kind of service then run a search for "high- risk merchant account providers" and try applying for an account with them. You will be required to provide additional documentation, in which case work on providing whatever is necessary to be accepted as a client.
- STEP 7: If all fails, look to partner with a U.S. citizen or permanent resident with good credit history, in order to open a regular (non-high-risk) merchant account with one of the large domestic providers.
What about taxation?
U.S. taxation is a confusing topic, so let's try to simplify it as much as possible. You should be concerned about the following types of taxes:
- Income tax,
- Sales tax,
- Payroll tax,
- Franchise tax,
- Gross receipt tax,
- Various specialty taxes.
Income and Sales Taxes:
We cover the questions of income and sales taxes in detailed manner in our article U.S. Taxation for Foreign Entrepreneurs. The short version is, sales tax is charged on specific products, and its rate depends on the state where your business is registered or has significant presence. Income tax depends on your company type (LLC or corporation), state(s) of registration, number and domicile of partners, etc.
