Can a foreigner open a restaurant in USA?
The article discusses can a foreigner open a restaurant in the USA?. For many foreigners, the United States is an attractive country to do business in and restaurants and other eateries are among some of the most popular businesses in the USA. Statistics for the year 2021/2022 indicate that there are approximately 1 million restaurant locations in the United States employing around 16 million workers. Moreover, according to the National Restaurant Association 2021 State of the Restaurant Industry Report released on January 21, 2021, total restaurant and foodservice industry sales in USA during the Covid-19 pandemic in 2020 were about $659 billion, less than the pre-pandemic projections of $899 billion. However, the restaurant industry in the United States remains strong in spite of the pandemic, and very attractive for foreign-born individuals.
While weighing all the pros and cons of opening a restaurant in the United States, the question still remains, can a foreigner open a restaurant in USA? The answer is yes, a foreigner can open a restaurant in the USA but in doing so it is important for the foreigner to keep in mind various considerations when opening a restaurant in the United States. Below we discuss some important aspects for foreigners who want to open a restaurant in USA.
Considerations for a foreigner opening a restaurant in USA
Business transactions oriented towards the United States where as a foreigner you want to open a business in USA, a restaurant or any other business, fall under the areas of international law related to the business transaction by foreigners in the United States including business corporate law matters, business immigration, international tax issues, customs and import and export matters and others. Because of the particularities involved, it is highly recommended that you discuss your particular circumstance with a licensed US attorney who is experienced in working with foreigners because certain US laws, rules and regulations apply differently to non-US citizens and non-residents, and foreigners must be in compliance with all US laws.
If you plan to open a restaurant in USA as a foreigner, here are some considerations to keep in mind:
1.Decide on the legal entity for the restaurant in USA.
Before opening a restaurant in USA, you should decide the legal entity for your restaurant business. With restaurant businesses, you want to limit liability and protect your personal assets from liabilities, including lawsuits. But there are certain restrictions on what type of legal entities a foreigner can own in the United States – partnerships, corporations, limited liability companies (LLCs) and sole proprietorships – and these restrictions can also impact your partners, especially if your other partners are US citizens or residents and are not subject to any restrictions.
2. Tax implications for the restaurant business in USA.
As a foreign owner of a business restaurant in USA you will be taxed on income effectively connected with the business, even if you live outside of the United States. You will also be required to make a certain filing with the US Internal Revenue Services (IRS). However, if you become a US resident for tax purposes you will be subject to tax in the same manner as a U.S. citizen. Consequently, prior to opening a restaurant in USA, it is recommended that you contact an accountant and a business or tax lawyer to understand the tax implications and any tax treaties that your country has with the United States.
3. Local zoning laws, licenses and permits for opening a restaurant.
Restaurants in USA are subject to local zoning laws and require a number of permits and licenses from the local government to operate, aside from other inspections and insurances. Depending on the state, county and city where the restaurant is located you may need to obtain as many as 10 licenses or more to open a restaurant. First, the restaurant must be located in an area that is zoned for commercial use and must be permitted to operate as a restaurant within that zone and development parameters. Furthermore, if the restaurant provides sitting outside then additional zoning restrictions may apply and other licenses may be required. Moreover, other restrictive uses for the restaurant may apply such as for example, a restriction to derive more than 25% of annual sales from the sale of bone-in chicken or chicken wings. Second, the business must obtain the required business licenses or certificates of occupancy in compliance with the city, county and state laws. Third, based on the extent of the restaurant services and setting and the state laws and the city and county ordinances, you may be required to obtain a license for the restaurant establishment as well as a food service license, liquor license and music license, among others. Keep in mind that you may also need to obtain insurance and pass regular health inspections.
For example, if you open a restaurant in Miami, Florida USA, you are required to comply with the laws of the State of Florida and obtain all the required licenses for the restaurant establishment, the service of food and alcohol to the public and collection of state and local taxes. Moreover, local zoning laws and business licenses are required in Miami-Dade County and City of Miami as well as insurance and other licenses and permits depending on the type of restaurant.
4. Management of foreign-owned restaurant in USA.
Unlike other businesses, restaurants involve an extensive amount of paperwork and rigorous compliance with state and local government aside from the day-to-day operation of the restaurant. As a foreigner interested in opening a restaurant in USA, it is important to consider who is going to manage the restaurant business in the United States and if you have a manager or partner locally who is able and willing to take on the operation and management of the restaurant. Otherwise, opening a restaurant from abroad without the right management in the United States can be nearly impossible.
5. Business immigration.
From the standpoint of complying with US immigration laws, you must have a visa (nonimmigrant or immigrant visa) that authorizes you to work in the United States in order to be able to manage the restaurant in USA on a day-to-day basis. While a visa is not required to open a restaurant in USA, a business or work visa is required to work for the restaurant business in the United States. You cannot work for the restaurant business while coming to the United States on a business visitor visa – B1/B2 visa. If you enter the United States on a B1/B2 visa or with ESTA, your work for the restaurant is limited to negotiating contracts and participating in business meetings. However, if you want to live and work in the United States and manage the restaurant business then you should consider other visas that may be available to you including E-1 and E-2 visas, L-1 visa, O-1 visa and others.
How can Malescu Law assist?
Our experienced business and immigration lawyers in Miami, Florida USA assist foreigners with opening a business in the United States, business permits and licenses in Florida, commercial contracts and intellectual property protections and business immigration to the United States. If you are a foreigner who wants to open a restaurant in Florida contact us to schedule a consultation.
Malescu Law P.A. – Immigration Lawyers