You don’t need to be a United States citizen to sell on Amazon, but once you sell 50 or more items on the marketplace, you’ll need to have a proper tax id. However, if you’re selling through Amazon’s FBA (Fulfillment By Amazon) program then you’ll need to form a company in the United States before you get started. If you plan on selling more than 40 items per month then this is the most cost-efficient way to sell on Amazon.
The Amazon marketplace is one of the most visited sites online today and is the industry leader for e-commerce sales. To sell things on Amazon you’ll be required to set up an Amazon account, provide a product feed to Amazon, or use their FBA program and send your products to an Amazon warehouse. There are legal requirements if you’re going to sell as a merchant that you’ll also need to be made aware of.
Regardless of the type of account you want to open, a non-citizen of the United States will typically have very similar requirements to citizens or residents of the country in order to sell on Amazon. These requirements, listed below, include obtaining your FEIN (Federal Employer Identification number).
You don’t have to be a corporation to get your FEIN number and sell as an individual seller but it can be cheaper to register as a merchant, where you will need a registered business. If you’re not a resident of the United States then you’ll need the following information in order to register an FBA account, regardless of whether you’re selling as an individual or a business:
Additionally, if there are states where you have a tax nexus then it’s required for you to include your state tax id in all of those states. If you’re not residing in the country then this will only apply to any business dealings you may have in specific states for the business that will be selling on Amazon.
If you have all of these pieces of information then you’ll meet the minimum requirements to sell on Amazon. You can move forward with registering your account at Amazon’s Seller Central. During the process, you’ll need to choose to either sell as an individual or as a merchant. Let’s take a look at the comparison.
If you’re going to be selling on Amazon then you’ll need to make sure you’re maximizing the amount of money you can make. Choosing the type of account you want to have on Amazon is part of this process. You can sell as an Individual and Amazon will charge you $0.99 per item sold plus referral and closing fees.
You still have to pay those fees with a merchant account but instead of nearly $1 per item sold you’ll just pay $39.99 per month, regardless of how much you sell. So if you’re selling more than 40 items per month then you’ll likely want a merchant account, which requires your FEIN to register.
Another option is to use Amazon Vendor Central if you’d prefer to be a vendor to Amazon’s products and their listings on the marketplace. As a vendor, you sell to Amazon and not to consumers through Amazon. While Amazon does the heavy sales lifting for their vendors, you’ll lose all control of pricing and placement.
Another decision you’ll have to make during the registration process is whether or not you’ll want to use Amazon’s FBA option. This might be more difficult for non-U.S. based individuals and businesses. Essentially the program allows you to store your products in one of Amazon’s facilities where they’ll take care of all the order fulfillment and shipping for you. Additionally, the program allows your items to be put on Amazon’s Prime shipping program, which is the most used shipping feature on the Amazon marketplace.
This is recommended for most businesses that sell a lot because it lowers your business operations and increases the amount of opportunity to get sales. You won’t have to worry about customer service or returns but you’ll have to get all of your products to Amazon in order to take advantage of the program. There are no additional restrictions to the FBA program based on where your business is primarily located.
Once you’ve made these decisions then you’ll be able to register, either as an individual or business. Now let’s go over the requirements of registering a business in the United States for non-citizens and residents.
Regardless of where your business is located, we recommend registering your business as a legal U.S. entity before applying to be a seller on Amazon if you plan on selling more than a few items per month. It’s a smoother process and the tax benefits of being a business could be beneficial for you. Plus, not only will registering as a business protect your personal assets but it typically makes the entire setup easier if you’re going to use FBA, and it’s required if you’re going to sign up as a merchant or a vendor.
Luckily, you can easily register a business entity through the help of a third party that will draft and file all of the legal paperwork for you. All you need to determine is what type of business you want to create, as we discuss below, and who your registered agent is going to be.
Part of registering your business means getting a registered agent within the state your business is created. Most states require you to have a registered agent, which is a person or entity that can receive official legal notices and correspondence from the government. This is especially helpful and needed if you’re not a citizen or if you don’t reside within the country.
Businesses routinely offer registered agent services to help businesses that do not have a physical address, in the event there is a legal notification to the business. Not selecting a registered agent could cause your business to fall out of good standing with your state, resulting in the business entity potentially being disbanded.
There are many questions that you may have in regards to registering your business or selling on Amazon as a non-resident of the United States. Below we’ve collected the most common questions and answered them to help you quickly find the answer you need.
Go to sellercentral.amazon.com and click the “Register Now” button. On the next landing page you’ll click the “start selling” button, which will prompt you to login to your Amazon account. If you already have an Amazon account of any kind you can use this login to access the seller services. However, we recommend creating a separate account from any personal uses of Amazon.
You’ll then be taken through the steps of providing the information we discussed above to register your seller account. Once you’re verified you can start creating product listings and selling to the masses.
You can obtain your FEIN number by filling out Form SS-4, as provided by the IRS. You don’t need to have any legal status in the country in order to get this number. Once you have the number you can sell products on Amazon as an individual instead of registering your business. If you’re registering a business, then you should wait to get your FEIN through that process.
Currently, if you’re not a citizen or a resident of the United States you can only create two types of legal business entities: an LLC (limited liability company) or a C-Corp (or corporation). You can also create an S-Corp if you’re a permanent resident of the country, even if you’re not a citizen.
There are many factors you’ll want to take into account when choosing between an LLC and a C-Corp. To learn more, check out our article on choosing the right business entity.
No, you don’t need a visa to register a business, however, the registration process doesn’t give you a right to travel to the country. This is why many foreign business owners choose to apply for a visa when they register for their business. The E-2 Visa is a common one applied to by startup business owners registering in the country for the first time.
You can get started with registering a business today so that you can sell on Amazon under an official business. The process only takes three steps and MyCompanyWorks will do all of the legwork to get your business registered and obtain your FEIN. Select the company type and state that you want to register in and get your the process of creating a business entity started immediately!
This entry was posted on Wednesday, February 5th, 2020 at 12:50 pm and is filed under New Business Ideas, Incorporation, Limited Liability Company, Starting A Business. You can follow any responses to this entry through the RSS 2.0 feed. You can skip to the end and leave a response. Pinging is currently not allowed.
IMPORTANT: We are open and have resources for small businesses to get help with Covid19!