Step 1: Register a U.S. Company
Currently, the registration fee for Colorado is $49, but with just a $1 registration fee, you can register until June 30, 2023.
When you add the platform's agent fee, it costs a total of $40 to register an LLC company in Colorado. Additionally, the annual maintenance fee for a Colorado LLC is approximately $235. So, not considering tax issues, registering an LLC in Colorado is a cost-effective option.
The process for registering an LLC company through Northwest Registered Agent is as follows:
Step 2: Apply for an EIN Tax ID
Applying for an EIN is a free service provided by the IRS. You don't need to pay for it.
For non-U.S. citizens, there are three ways to apply for an EIN as provided by the IRS:
- Phone Application: This is the fastest method. You can apply by calling (1) 267-941-1099. Phone service is available from 6:00 AM to 11:00 PM Eastern Time, Monday through Friday. It's advisable to fill out Form SS-4 in advance as the IRS representative will ask you questions based on the information in this form. If everything is in order, you can get your EIN number over the phone, and the EIN confirmation letter will be mailed to the address you specify. The confirmation letter is important for future use, and this is where the Northwest Registered Agent's address can come in handy. Once they receive the EIN confirmation letter, they will scan and upload it to your account, allowing you to download it for your use.
- Mail Application: Applying for an EIN via mail is not recommended due to the longer processing time.
- Fax Application: If your English language skills are not strong, you can use the fax application method. You can receive your EIN in as little as 4 business days with this method, provided that you include your fax number on Form SS-4. After filling out the SS-4 form, you can fax it to (1) 304-707-9471.
There are many online fax services available that you can try, and some of them offer free trials, although they can be somewhat cumbersome.
You can indeed opt for outsourcing services to help with the EIN application process. Prices for outsourcing the EIN application for an LLC company typically range around $35. It's advisable to choose a reputable and highly-rated service provider for this task.
Additionally, if you decide to use a fax service for the application, you can expect to pay around $10 per page for sending and $5 per page for receiving faxes in the United States. This can be a convenient option for those who prefer to use fax as their method of application.
This form consists of two pages, but when faxing, you only need to send the first page, which contains the essential information.
I have prepared a sample that you can download and review:
Step 3: Apply for Shopify Payments and Stripe
Regarding Shopify Payments and Stripe, I covered the details in my previous article, so I won't go into much detail here. In brief, if you're not in the U.S. or not a U.S. citizen, you won't qualify for Shopify Payments. However, even if you're not in the U.S. or not a U.S. citizen, if you have a U.S. company, you can still apply for Stripe. Therefore, the first step is to apply for a U.S. company. (In fact, Stripe's application process is not very strict; sometimes you can even pass with some loosely provided information, but that's a risk not worth taking. So, it's better to follow the standard process.)
When applying for Shopify Payments and Stripe, you can use the information and EIN from your U.S. company. The process is quite simple, so I won't include images here.
Even if you don't qualify for Shopify Payments, my recommendation is to first get your U.S. company registered and obtain your EIN. Afterward, you can try applying for Shopify Payments. If your Shopify Payments application is approved, you can use it continuously unless you have a high dispute rate or other issues that trigger a reevaluation.
If your Shopify Payments application is not approved, then you can apply for Stripe and switch to using Stripe for payments. Even if you've been using Shopify Payments for some time and it gets shut down, don't worry; as long as you're running a legitimate e-commerce business, your money will be safe and will be sent to you.
Additionally, while Stripe requires you to have a physical bank account for receiving payments, using virtual cards like Wise, Payoneer, or Revolut should not be a problem, and there are no concerns about your card being closed. Do not use physical cards like Hua Mei, Velo, or other physical cards for receiving payments; personal cards cannot be used for business, and the consequences can be severe, regardless of the country.
New stores might face a small issue when they initially start receiving payments. Since the order volume is low, Stripe's daily payouts may not be substantial. In such cases, if a customer requests a refund for an order, for example, a $100 order, and you process the refund directly to the customer, your account balance may become negative when Stripe makes the payout today. Stripe will attempt to debit the refunded amount from your linked bank account to balance this. However, since we typically use virtual bank cards, they don't support such debits. This may result in a failed payout, and you'll receive a notification from Stripe (or Shopify Payments) indicating that you need to update your receiving card, and they will attempt the debit again.
In such situations, don't worry. Firstly, it won't affect your website's payment processing. You can also update your receiving card. Stripe now supports a top-up feature, meaning you can add funds directly to your Stripe balance from your bank account (e.g., using Wise). For Shopify Payments, there's no top-up feature, but you can get your balance back into the positive by placing a few orders on your website, allowing Shopify to make a payout and return your balance to a positive state, so they can proceed with future payouts as usual.