The EIN number (Employer Identification Number) is the cornerstone of U.S. business operations. This article addresses the 10 most critical questions non-U.S. residents face when applying for an EIN number, covering eligibility, SSN/ITIN requirements, application methods, document preparation, processing times, uses, and error correction. Get clear, authoritative answers to remove obstacles and successfully obtain your EIN number.
For non-resident entrepreneurs planning to do business in the United States, the EIN number (Employer Identification Number) is the essential first step. However, numerous questions and uncertainties often arise during the application process. Do I need a Social Security Number? How long does it take? What can I use the EIN number for? What if I make a mistake?
To help you eliminate all doubts, we’ve compiled the 10 most frequently asked questions by non-U.S. residents when applying for an EIN number, providing authoritative answers based on official IRS policies. This ensures your application process is clear and smooth.
1. Q: As a foreigner without a U.S. Social Security Number (SSN), can I apply for an EIN number?
A: Yes, absolutely—and you do not need an SSN or ITIN.
This is a common misconception. The IRS explicitly allows non-U.S. residents to obtain an EIN number for their U.S.-registered companies. When completing Form SS-4, the SSN/ITIN field (Item 7b) for the responsible party does not need to be filled. Simply write “Foreign” clearly in this field. This is the IRS’s officially recognized standard practice for non-resident applications. Your passport is the primary document for verifying your personal identity.
2. Q: Is there a fee to apply for an EIN number with the IRS?
A: No. Applying for an EIN number directly with the IRS is completely free.
The IRS does not charge any application fees. If you use an accountant, lawyer, or professional service provider (like SpeedEIN), the fee you pay is a service fee for their assistance as your “Authorized Representative” in submitting the application and ensuring accuracy. It is not an official IRS fee. Beware of any entity claiming you must pay the IRS directly.
3. Q: How long does it take to receive an EIN number?
A: Processing time depends on the method used, ranging from 1-2 business days to up to 8 weeks.
- Through an Authorized Representative (Recommended): When a professional service submits via fax, you typically receive the EIN number within 1-2 weeks. Some efficient services can complete the process in 1-2 business days.
- By Mail: Mailing Form SS-4 to the IRS can take 4-8 weeks or longer due to international shipping and IRS processing times.
- By Phone: While theoretically the fastest (issued during the call), this method has strict limitations for non-residents and is generally not feasible.
Conclusion: Using a professional service is the best way to achieve the fastest processing time.
4. Q: Does an EIN number expire? Do I need to renew it?
A: No, it does not expire and is valid permanently.
Once assigned by the IRS, your EIN number is permanently linked to your specific business entity. Even if the company becomes inactive or is eventually closed, the EIN number will not be reassigned to another business. You do not need to “update” or “renew” your EIN number with the IRS on a regular basis.
Note: While the number itself is permanent, if key company information (such as the responsible party, address, or business type) changes, you must notify the IRS. However, this does not change the EIN number itself.
5. Q: What can I use an EIN number for? Why is it so important?
A: The EIN number is the “lifeline” of U.S. business operations, with core uses including:
- Filing Taxes: Required to file federal business tax returns (e.g., Forms 1120, 1120-S, 1065), pay withholding taxes, and unemployment taxes.
- Opening a Bank Account: Virtually all U.S. banks require an EIN number to open a business checking account for a new company.
- Hiring Employees: Necessary for reporting wages and withholding income, Social Security, and Medicare taxes.
- Applying for Licenses: Many state and local governments require an EIN number when issuing specific business licenses.
- Building Business Credit: Lenders and suppliers use the EIN number to establish and evaluate your business creditworthiness.
In short, without an EIN number, your U.S. company cannot legally or functionally conduct financial and tax operations.
6. Q: What should I do if I made a mistake on the SS-4 form?
A: You can and must correct it.
If you discover an error on Form SS-4 after receiving your EIN number (e.g., incorrect company name, address, or responsible party information), you must contact the IRS immediately to correct it.
- Correction Method: Usually requires a written letter clearly stating your EIN number, the incorrect information, the correct information, and the reason for the change, mailed to the IRS’s designated address.
- Importance: Incorrect information can lead to tax filing issues, frozen bank accounts, or compliance risks. Timely correction is crucial for maintaining business compliance.
7. Q: Can I apply for multiple EIN numbers for the same company?
A: Typically, one company only needs one EIN number.
An EIN number is the unique, permanent identifier for a business. A new EIN number may be required only in rare, specific circumstances:
- A major structural change (e.g., converting from an LLC to a C-Corp, treated as a new entity).
- The company is acquired or merged, forming a new legal entity.
- A fundamental change in ownership (e.g., a sole proprietorship owner passes away, and heirs operate under a new entity).
For simple business expansions or opening branches, a new EIN number is usually not required.
8. Q: What documents are required to apply for an EIN number?
A: Core documents include:
- Company Formation Documents: Such as the Articles of Organization (for LLCs) or Articles of Incorporation (for Corporations).
- Responsible Party ID: A copy of a valid passport (often notarized).
- Completed Form SS-4: Accurately filled out, with “Foreign” indicated in the SSN/ITIN field.
- Bylaws/Operating Agreement (Highly Recommended): Proves ownership and management structure, especially important for bank account opening.
While the IRS may not require copies of all documents during the EIN application, having them ready supports the accuracy of your application and is essential for future interactions with banks or the IRS.
9. Q: What is the difference between an EIN number and an ITIN?
A: Both are issued by the IRS, but they apply to different entities and serve different purposes.
| Feature | EIN Number (Business) | ITIN (Individual Tax ID) |
|---|---|---|
| Applies To | Business Entities (Companies, LLCs, Partnerships, etc.) | Individuals (Non-residents or residents ineligible for an SSN) |
| Primary Use | Business tax filing, opening bank accounts, hiring employees | Individual tax filing (e.g., non-residents reporting U.S. income) |
| Applicant | Company Responsible Party (can be non-resident) | Individual taxpayer |
| Relation to SSN | Can be obtained without an SSN | For individuals who cannot get an SSN |
In short: Your company needs an EIN number, while you personally may only need an ITIN if you have a U.S. tax obligation.
10. Q: What should I do after receiving my EIN number?
A: Take these critical next steps immediately:
- Safeguard the Document: Securely store the CP 575 Notice from the IRS, which is the official proof of your EIN number.
- Open a Bank Account: Use your EIN number, company documents, and CP 575 to initiate the process of opening a U.S. business bank account.
- Consult an Accountant: Work with a CPA familiar with international tax to plan your federal and state tax filings, accounting, and compliance.
- Launch Your Business: Officially begin operations, using your EIN number for contracts, invoicing, and financial transactions.
Conclusion: Knowledge is Power, Apply with Confidence
Obtaining an EIN number is not an insurmountable barrier. By understanding these key questions and answers, you now possess the core knowledge needed for a successful application. Remember, the EIN number is the foundation of your U.S. business empire. By choosing the right method (such as using a professional service), preparing complete documentation, you can smoothly obtain this crucial tax ID and lay a solid foundation for your business’s success in the United States.