Real Advantages of Forming a US Company for E-Commerce Sellers

Digital commerce no longer knows borders. Many successful entrepreneurs want to expand their products to the American market through platforms like Amazon, Etsy, and Shopify.

However, rather than proceeding as an individual seller when selling in the US, forming a US company provides significant advantages both legally and commercially.

Let's break this down: why is forming a US company important, what does the process involve, which of the 50 states should you choose, does it matter, what problems might arise, and what mistakes do entrepreneurs commonly make? You'll find answers to all these questions below.

Why is Forming a US Company Important?

The US market is the world's largest e-commerce market. Platforms like Amazon, Walmart, Etsy, and eBay prefer sellers to operate through a US-based company.

There are many advantages to owning a US company. Let's examine the key benefits:

Opening an Amazon US Account Becomes Easier

Amazon requires reliable and verifiable business information from those who want to sell in the American market. Many sellers applying individually from overseas face difficulties with address verification, tax numbers (EIN), and bank accounts.

When you own an LLC (Limited Liability Company) established in the US, these barriers disappear. Here's why:

• You can enter your company name and US address when registering with Amazon.
• Your EIN number (US tax number) is accepted by Amazon as an official tax ID.
• Account approval happens faster because you have "U.S. business entity" status.
• Filling out tax forms (like W-9) becomes much easier.
• Your account's credibility increases — Amazon considers US-based companies as lower-risk sellers.

In short, forming a US company doesn't just make opening an Amazon account easier; it also strengthens your account's security and long-term sustainability.

Legally Declare Sales Revenue with a US Tax Number (EIN)

When you form a US company, not only does opening an Amazon account become easier, but you also establish your business activities on an official, trustworthy, and tax-advantaged foundation.

The EIN (Employer Identification Number) is the tax identification number for companies in the US. Without this number, income from sales on platforms like Amazon, Etsy, or Shopify is considered unregistered for tax purposes.

When you have an EIN:

• You can properly declare your income to the IRS (Internal Revenue Service).
• You can easily fill out tax forms (like W-9) on platforms like Amazon.
• You gain a legal and professional standing as a business operating in America.

Customer Trust Increases — US Address and Company Name Add Professionalism

Having a US-based company name is a trust factor for customers on Amazon, Etsy, and Shopify alike.

American consumers generally prefer to shop from sellers labeled as "U.S.-based business." This means:

• Your brand perception strengthens.
• Customers trust you more in returns, support, and shipping processes.
• You're positioned as a "trusted seller" in Amazon's system.

Trademark Registration (USPTO) and Intellectual Property Protection

When you own a US company, you can register your trademark through the USPTO (U.S. Patent and Trademark Office). This provides these advantages:

• You legally protect your brand within US borders.
• You can register for Amazon Brand Registry and prevent counterfeit product listings.
• You can manage your product pages more professionally (A+ content, video, etc.).

Working with Banks and Payment Providers Becomes Easier

Owning a US company gives you the right to open a US-based business bank account. This solves many payment problems that international entrepreneurs face.

For example:

• You can open USD accounts and receive payments through platforms like Payoneer, Wise, Mercury, and Relay.
• You can withdraw Amazon payments directly to your US account.
• You can keep your income in your business account, managing it separately from personal income.

Tax-Advantaged Structures Can Be Created for Global Sales

Your US company allows you to do business not just in America, but in other parts of the world too. When structured correctly:

• You can optimize income from international sales for tax purposes.
• You can benefit from the double taxation treaties the US has with many countries.
• You can scale your business more easily and transform into a global brand.

Company Formation Process for International Entrepreneurs

Forming a company in the US isn't as complicated as you might think. With proper guidance, all processes can be completed remotely within a few days.

For international entrepreneurs, the process generally consists of the following steps:

State Selection (e.g., Wyoming, Delaware, or California)

Each state has different tax rates and annual obligations. Choosing the right state based on your company's structure, goals, and budget makes a big difference in the long run. Some states don't require corporate income tax but have annual reporting and other business obligations, while other states have corporate income tax plus additional requirements.

You should choose the most suitable state based on the business you want to do in America. Don't worry—our expert team helps you with this.

LLC / Corporation Formation Application

The Limited Liability Company (LLC) is the most preferred company type in America. The formation application is made to the state's secretary of state and ensures your company is officially registered. Once this step is complete, you become a legal business owner in America.

There are tax differences between LLC and Corporation company types. We help you determine which company type is more advantageous based on the business you'll be doing.

EIN (Tax Number) Application

The EIN is your company's official tax identification number issued by the IRS (Internal Revenue Service). After your company is established in the state, it must also be registered at the federal level. That's what the EIN is.

This number is required to open a bank account, verify Amazon, Etsy, or Shopify accounts, and declare your income.

Beneficial Ownership Information (BOI) Filing

This is a new requirement that took effect in 2024. With this filing, the actual owners of the company are reported to the US Treasury Department (FinCEN – Financial Crimes). Since failure to file on time results in high penalties, this step must be carefully followed.

Sales Tax Registration

Companies selling in states must have Sales Tax registration in those states. This is a legal requirement for both Amazon and Shopify sellers.

We determine which registrations are required based on the states where you sell and handle the process for you.

Annual Filings and Accounting

After the company is formed, there are routine filings that must be made to the state and IRS each year. These filings ensure the company remains active and is protected from penalties.

At Simple Corporate Solutions, we continue our support with annual calendars and filing processes after formation.

Business Licenses and Permits

Some states and cities in America require business licenses or seller's permits depending on the type of commercial activity.

For example, an LLC selling through Amazon or Shopify may need to obtain these permits depending on the product category or the state where it sells.

Which State is Best?

State selection matters in terms of both cost and obligations. Here's a brief comparison of three frequently chosen states:

Common Mistakes

Many entrepreneurs make small but important mistakes in the process. For example:

• Forming a company just to open an Amazon account and forgetting annual filings
• Skipping BOI or Sales Tax filings
• Not meeting legal obligations in the state where the company was formed and/or other states where business registration was added
• Facing high franchise taxes due to wrong state selection

These mistakes can lead to penalties, tax risks, or account closures down the road.

That's why annual filing and accounting follow-up alongside formation is critical. Continuation is just as important as getting started. An incomplete company formation service can cause your business to shut down and even face penalties.

Enter the US Market Confidently with the Right Steps

Forming a company in America is not just a formality; when done correctly, it's an investment that will take your brand to a global level.

Spend your time and money on proper business setup. Work with a firm that knows the processes and follows current regulations.

At Simple Corporate Solutions, we help entrepreneurs confidently enter the US market. We're with you throughout the entire process, from company formation to annual filings.