Business Setup in New York (2026)

Good to know

Good to Know

No local partner, sponsor, or US citizen/resident co-owner is required — a foreign national can own 100% of a New York LLC or corporation.
The newspaper publication requirement is the single biggest wildcard in cost: filing the Articles of Organization itself costs $200, but the mandatory newspaper notices can cost anywhere from roughly $50 in some upstate counties to well over $1,000 if your LLC's office is in Manhattan/New York County — factor this in before choosing your registered office address.
Filing online through the NY DOS system gets same-day approval; mailed paper filings take a few weeks, so online filing is worth it if you're on a visa timeline or need to open a bank account quickly.
You do not need a US Social Security Number to get an EIN as a foreign owner, but the process is slower (phone/fax/mail) than the instant online EIN system available to SSN holders.
New York's biennial statement fee is very low ($9 every two years), but missing it can put your LLC out of good standing, which can complicate bank or visa-related paperwork.
New York effectively layers tax: a NYC-based C-corporation can face federal (21%), NY State franchise tax (6.5%, or 7.25% temporarily on income over $5 million through 2026), the NYC Business Corporation Tax (8.85% top rate), and an MTA surcharge on top of the state tax if doing business in the 12-county metro commuter district — budget for all four when comparing structures.
If you form a US LLC as a foreign owner and never draw income from it, you can still owe nothing in tax but face a $25,000 penalty for simply failing to file Form 5472 and its pro forma Form 1120 — this is a pure paperwork trap that catches many first-time foreign founders.
Freelancing/sole-proprietor work in NYC is taxed at the entity level via the city's 4% Unincorporated Business Tax (with a credit that zeroes it out below roughly $95,000 of income, phasing out by $135,000) — but note this is separate from whether you're legally allowed to work in the US at all, which is a visa/immigration question covered elsewhere.
Getting a US EIN as a foreign owner without a US SSN/ITIN takes longer — you cannot use the IRS's instant online tool and must apply by phone, fax, or mail, so build extra lead time into your incorporation timeline.
Multi-member LLCs taxed as partnerships generally avoid the Form 5472 foreign-ownership reporting regime that applies to single-member disregarded LLCs and 25%+ foreign-owned corporations — entity choice materially changes your federal compliance burden, not just your tax rate.

Federal Level

Corporate Income Tax Rate Percent: 21
Entity Type: C-Corporation
Notes: Flat federal corporate rate on a US C-corporation's taxable income, regardless of where shareholders live. A foreign-owned US LLC that has NOT elected corporate tax treatment is a 'disregarded entity' and generally has no federal income tax return of its own — its income/loss flows to the foreign owner, who may owe US tax via Form 1040-NR only if the income is 'effectively connected' with a US trade or business.

Reportable Income Types For Foreign Owners

Branch Profits Tax: An additional 30% layer can apply to repatriated earnings of a foreign corporation's US branch.
Effectively Connected Income ECI: Taxed at the standard 21% corporate rate (or graduated individual rates for a disregarded owner).
FDAP Income Fixed Determinable Annual Periodic: Withheld at 30% unless a tax treaty reduces the rate.

New York City Level

For C Corporations

Top Business Income Rate Percent: 8.85
Business Capital Base Rate Percent: 0.15
Law: NYC Business Corporation Tax (BCT), in effect for tax years beginning on or after January 1, 2015
Capital Base Cap: $10,000,000
Alternative Bases: Like the state, NYC computes tax under multiple bases (business income, business capital, fixed dollar minimum) and applies whichever is highest.
Note Large Financials: Top rate is 9% for certain large financial corporations.
Economic Nexus Threshold Note: A corporation with no physical NYC presence can still owe NYC tax once NYC-sourced receipts cross an economic nexus threshold (roughly $1,128,000 in a recent tax year, adjusted periodically).

Fixed Dollar Minimum Range

Maximum: $200,000
Minimum: $25

For S Corporations

Note: Federal S-corporations are exempt from the BCT but remain subject to NYC's General Corporation Tax (GCT) at the same 8.85% headline rate at the entity level — NYC does not respect the federal S-election the way NY State partly does.

For Unincorporated Businesses Sole Proprietors Partnerships Default LLCs

Rate Percent: 4
Law: NYC Unincorporated Business Tax (UBT), NYC Admin Code §11-501
Base: Unincorporated business taxable income sourced to NYC.
Filing Form: NYC-202 for sole proprietors/single-member entities; a common compliance trap is a foreign-owned NYC single-member LLC or sole-proprietor consulting business simply never filing this form.
State Level Contrast: New York State itself does not impose an entity-level income tax on partnerships, LLCs, or sole proprietorships — that income flows through to the owner's personal return — but NYC's UBT still taxes these same entities at the entity level, which surprises many first-time filers.
Small Business Credit: A UBT credit under NYC Admin Code §11-503 fully offsets the tax for unincorporated businesses with up to $95,000 of taxable income, phasing out gradually until it disappears at $135,000 of income.

New York State Level

Law: Article 9-A Corporate Franchise Tax
Applies To: Domestic (NY-incorporated) corporations and foreign corporations that do business, employ capital, own/lease property, maintain an office, or derive receipts from activity in New York State.
Mta Surcharge: An additional Metropolitan Transportation Business Tax surcharge (roughly 30% of the state tax apportioned to the 12-county Metropolitan Commuter Transportation District, which includes all of NYC) applies on top of the state franchise tax for businesses doing business in that district.
Calculation Method: New York calculates the tax under three bases — business income, business capital, and the fixed dollar minimum — and the corporation pays whichever produces the highest amount.

Rate Structure

Temporary Rate Applies To: Business income over $5 million; extended through tax year 2026, reverting to the 6.5% flat rate for tax years beginning in 2027 unless further extended.
Temporary Surcharge Rate Percent: 7.25
Business Capital Base Rate Percent: 0.1875
Permanent Business Income Rate Percent: 6.5
Capital Base Cap: $5,000,000

Fixed Dollar Minimum Tax Range

Maximum: $200,000
Minimum: $25

Freelancer Sole Proprietor Vs Forming A Company

Sole Proprietor Freelancer Route

Liability: No liability shield — the individual is personally exposed to business debts and claims, unlike a corporation or LLC.
NYC Tax Exposure: Subject to the 4% NYC Unincorporated Business Tax on NYC-source income above the UBT credit thresholds described above, plus applicable federal and NY State personal income tax filings on business profit.
Practical Limitation For Foreigners: Operating as a sole proprietor in the US generally presumes the individual already has US work authorization to legally perform work here — that is a visa/immigration question, not a tax one, and is covered separately under Visa & Legal rather than here.
Description: The simplest legal structure — no separate entity is formed; the individual and the business are the same for liability and (mostly) tax purposes.

Forming A Company LLC Or Corporation

Multi Member LLC Taxed As Partnership: A foreign-owned multi-member LLC that has NOT elected corporate tax treatment is generally not required to file Form 5472 (that requirement is specific to disregarded single-member entities and corporations with 25%+ foreign ownership), but it does flow income through to members' personal filings and remains subject to NYC's 4% UBT at the entity level.
Why Foreigners Typically Use This Route: A foreign national who is not a US person can own 100% of a US LLC or corporation without being a US tax resident and without needing US work authorization to own (as opposed to personally work in) the business — this is the standard structure used by non-resident founders running a US-facing or global online business.

C Corporation Route

Federal: Taxed at the flat 21% federal corporate rate on net income, regardless of where shareholders reside.
State And City: Also subject to the NY State Article 9-A franchise tax and the NYC Business Corporation Tax layers described above — meaning a NYC-based C-corp effectively stacks federal + state + city + (if in the MTA district) surcharge tax.
Form 5472 Still Applies: Any US corporation with 25% or more direct or indirect foreign ownership must also file Form 5472 for years with reportable related-party transactions, separate from its regular Form 1120 corporate return.

Single Member LLC Disregarded Entity

EIN Requirement: An EIN (Employer Identification Number) is required to file Form 5472/1120. Foreign owners without a US SSN or ITIN cannot use the IRS's online EIN application and must apply by mail, fax, or phone instead.
Federal Tax Treatment: By default, a single-member LLC is a 'disregarded entity' for federal tax purposes — it files no federal income tax return of its own, and profits/losses are attributed to the owner.
No Automatic US Tax Liability: The disregarded LLC itself owes no federal corporate income tax purely from this filing — the pro forma Form 1120 is a reporting placeholder, not a tax return — but the foreign owner may still owe US tax (via Form 1040-NR) if the LLC's income is 'effectively connected' with a US trade or business.
Penalty For Missing Or Incomplete Filing: $25,000
Per form, per year, with additional $25,000 penalties for every 30-day period the failure continues after an IRS notice, and no stated cap on continuation penalties.
Mandatory Annual Reporting Regardless Of Income: A foreign-owned US disregarded entity must still file IRS Form 5472 attached to a 'pro forma' Form 1120 every year it has any reportable transaction with the foreign owner or a related party — including something as simple as the initial capital contribution used to fund the LLC — even if the LLC had zero revenue.

Incorporation Process And Requirements

Jurisdiction: New York State (city businesses incorporate at the state level via the NY Department of State; New York City has no separate incorporation registry)
Registered Agent: New York State law makes the Secretary of State the default statutory agent for service of process for every NY LLC automatically, at no extra cost; naming a separate private registered agent is optional.
Common Entity Type For Nomads: Limited Liability Company (LLC) — the most commonly used structure for small/solo foreign-owned businesses in NY
Local Partner Or Sponsor Required: No. New York State does not require a foreign national to have a US citizen, US resident, or local partner/sponsor to own or manage an LLC or corporation. 100% foreign ownership is permitted for both LLCs and corporations.

Steps

Cost
$20
Step
1
Note
Name reservation holds the name for 60 days; this step is optional.
Description
Choose and, optionally, reserve a business name (not mandatory) with the NY Department of State, Division of Corporations.
Cost
$200
Step
2
Note
Filed online via the NY DOS E-Corp system, by mail, or in person.
Description
File the Articles of Organization (for an LLC) or Certificate of Incorporation (for a corporation) with the NY Department of State, Division of Corporations. This is the document that legally creates the entity.
Cost
$50
Step
3
Note
Filing fee for the Certificate of Publication is separate from the newspaper publication cost itself, which varies enormously by county and can be far higher in New York City than upstate.
Description
(LLCs only, mandatory) Publish notice of the LLC's formation once a week for six successive weeks in two newspapers (one daily, one weekly) designated by the county clerk of the county where the LLC's office is located, then file a Certificate of Publication with the Department of State.
Cost
$0.00
Step
4
Description
Obtain a US federal Employer Identification Number (EIN) from the IRS (free of charge). Foreign owners without a US Social Security Number can still apply, typically by phone, fax, or mail rather than the instant online system.
Cost
$0.00
Step
5
Description
Open a US business bank account. Many banks require an in-person visit for non-resident owners, though some fintech/online providers accept remote applications.
Cost
$0.00
Step
6
Note
Highly activity-dependent; many consulting/online businesses need no additional local license.
Description
Register for applicable New York State and NYC taxes/licenses depending on business activity (e.g., sales tax vendor registration, NYC business licenses for specific trades).
Cost
$9.00
Step
7
Description
File a recurring Biennial Statement with the NY Department of State every two years to remain in good standing.

Realistic Timeline

Entity Legally Formed: Same day if filed online; about 2-3 weeks if filed by mail (expedited processing for an extra fee is available: 24-hour, same-day, or 2-hour options).
Full Compliance Including Publication: Roughly 4-8 weeks total, since the publication run itself takes six consecutive weeks and must be completed within 120 days of formation, though the LLC can legally operate and sign contracts before the publication period ends.

Typical Total Cost Range

Low Estimate: $300
High Estimate: $2,500
Note: The wide range is driven almost entirely by the newspaper publication requirement, which is inexpensive in upstate counties but can run into the hundreds or low thousands of dollars in New York City/Manhattan (New York County).

Official Government Links

Foreign Qualification Alternative

Cost: $250
Description: If a nomad instead forms an LLC in another US state (e.g., Delaware, Wyoming) and wants to legally operate it in New York, they must separately register that out-of-state LLC as a 'Foreign LLC' with the NY DOS via an Application for Authority, and it is still subject to the same newspaper publication rule.

Filing Deadlines

Foreign Owned Disregarded LLC Form 5472: Due with the pro forma Form 1120, by April 15 for calendar-year entities, extendable to October 15 via Form 7004 marked 'Foreign-owned US DE' and filed at a dedicated IRS fax/mail address — this filing cannot be e-filed and must go by paper or fax.
Federal And NYC Bct Calendar Year Filers: April 15 following the close of the tax year, with extensions available (Form 7004 federally; NYC-EXT for NYC).
Ny State Article 9a Calendar Year Filers: On or before April 15 following the close of the tax year, with up to one year of extensions available via successive extension filings.

Tax Layers Overview

A business operating in New York City can face up to four separate layers of tax on the same income: federal corporate tax, New York State franchise tax, the NYC business tax (corporate or unincorporated), and an MTA surcharge if doing business in the metro commuter district. Which layers apply depends heavily on entity choice (C-corp vs. LLC/sole proprietorship vs. S-corp).

AI-generated estimateData refreshed July 2026

Sources cited for this category

These are the sources cited in this business permits & incorporation for foreigners research for this city. Individual figures may not each trace to one of them.

1.dos.ny.gov
2.dos.ny.gov

More About New York

Data last updated July 2026 · Verify anything important.