What’s an EIN, and why do I need one?

If you're a Latin American founder looking to start a US-based business, obtaining an Employer Identification Number (EIN) is an essential step in the process. In this post, we'll walk you through the important things you should know about obtaining an EIN and why it's important to have one as a founder. 

What is an EIN?

An EIN is a unique nine-digit number assigned by the Internal Revenue Service (IRS) to identify your business for tax purposes. It's like a Social Security number for your business. You'll need an EIN if you plan to hire employees, open a bank account, or file tax returns for your business.

‍How to obtain an EIN?

There are several ways to obtain an EIN. You can apply online through the IRS website and manage that process yourself, or you can work with Openbiz, which handles everything for you. Just provide some basic information about your such as its name, address, and entity type. 

‍Why is an EIN important for Latin American founders?

Latin American founders who want to start a US-based business should obtain an EIN for several reasons:

1. Legitimacy: Having an EIN gives your business legitimacy and shows that you're serious about starting a business in the US. It also helps to establish your business as a separate legal entity from yourself.
2. Hiring employees: If you plan to hire employees for your business, you'll need an EIN to pay payroll taxes and file tax returns.
3. Opening a bank account: In most cases, to open a business bank account in the US, you'll need an EIN. With Openbiz’s partnership with Relay Bank, you can open a US bank account without obtaining an EIN. This saves time and lets you start your company faster. 
4. Filing tax returns: As a business owner, you must file tax returns for your business. An EIN is required to do so.
5. Avoiding personal liability: If you operate your business without an EIN, you may be held personally liable for any taxes owed by your business.

Obtaining an EIN is an important step for founders who want to start a US-based business. It's a necessary requirement for hiring employees, opening a bank account, and filing tax returns for your business. Openbiz makes it easy to obtain an EIN by handling all the paperwork with the IRS directly so you can focus on building your business.