Turkish entrepreneurs and companies looking to establish a presence in the United States face a range of structural decisions at the outset. The choice of legal entity is among the most consequential — shaping the business's tax profile, governance structure, liability exposure, and attractiveness to investors for years to come.

Limited Liability Company (LLC): The LLC is the most popular business structure for foreign entrepreneurs entering the U.S. market. It combines the liability protection of a corporation with the tax flexibility of a partnership. Members (owners) of an LLC are not personally liable for the company's debts and obligations beyond their capital contributions.

From a tax perspective, a single-member LLC is treated as a "disregarded entity" by the IRS — meaning its income and expenses flow directly to the owner's personal tax return — while a multi-member LLC is taxed as a partnership by default. Both single- and multi-member LLCs can elect to be taxed as a corporation (C-Corp or S-Corp) if that structure is more advantageous.

For Turkish companies establishing a U.S. subsidiary or joint venture, the LLC is frequently the preferred vehicle due to its simplicity, flexibility, and favorable tax treatment.

Corporation (C-Corporation): The C-Corporation is the standard structure for companies seeking venture capital investment, planning a public offering, or requiring a more formal governance framework. Unlike the LLC, the C-Corp is a fully separate taxpaying entity — it pays corporate income tax at the federal rate (currently 21%) on its profits, and shareholders pay tax again on dividends received (the "double taxation" issue).

However, C-Corps offer significant advantages: they can issue multiple classes of stock (common and preferred), which is essential for venture capital financing; they benefit from well-developed Delaware corporate law; and they are the expected structure for institutional investors and strategic acquirers.

S-Corporation: The S-Corp is available only to corporations with 100 or fewer shareholders, all of whom must be U.S. citizens or permanent residents. Because Turkish nationals and Turkish companies are ineligible to be S-Corp shareholders, this structure is generally not available for Turkish-owned U.S. businesses.

The state of incorporation is a separate decision from the state where the business will operate. A company can be incorporated in Delaware but conduct all of its business in New York, California, or any other state.

Delaware is the dominant choice for C-Corporations, particularly those seeking venture capital or planning to go public. Delaware's Court of Chancery is a specialized business court with centuries of corporate law precedent. Approximately 68% of Fortune 500 companies are incorporated in Delaware.

For LLCs, Wyoming and Delaware are both popular choices for foreign-owned businesses. Wyoming offers no state income tax, strong charging order protections, and low annual fees. Delaware offers the prestige of its legal system and is preferred when the LLC may later convert to a C-Corp for investment purposes.

New York and California are less favorable as states of incorporation due to higher franchise taxes, more burdensome reporting requirements, and less flexible corporate laws.

Every U.S. entity — LLC or corporation — must maintain a registered agent in its state of incorporation. The registered agent is a person or company with a physical address in the state who is authorized to receive legal process on behalf of the company. Commercial registered agent services typically cost $50–$150 per year.

Once the entity is formed, the company must obtain a Federal Employer Identification Number (EIN) from the IRS. The EIN is required to open a U.S. bank account, hire employees, and file federal tax returns. Foreign nationals without a U.S. Social Security Number can obtain an EIN by submitting IRS Form SS-4 by mail or fax — a process that typically takes 4–6 weeks.

Some banks require an in-person visit to open a business account; others, particularly fintech-oriented banks (Mercury, Relay, Brex), offer remote account opening for foreign-owned U.S. entities.

Since January 1, 2024, most U.S. LLCs and corporations are required to file a Beneficial Ownership Information (BOI) report with the Financial Crimes Enforcement Network (FinCEN) under the Corporate Transparency Act. The report discloses the identity of individuals who own 25% or more of the company or exercise substantial control over it.

For Turkish founders, this means providing passport information and a photograph to FinCEN. Newly formed entities must file within 90 days of formation. Failure to file carries civil penalties of $500 per day and potential criminal liability.

Beyond federal requirements, U.S. businesses face a layered compliance environment at the state and local level. Depending on the state and industry, this may include:

• State business licenses
• Professional licenses (for regulated industries)
• Sales tax registration
• Payroll tax registration (if the company has employees)
• Annual report filings with the state secretary of state

New York, for example, requires LLCs to publish a notice of formation in two newspapers for six consecutive weeks — a requirement that can cost $1,000–$2,000 and catches many foreign founders by surprise.

A straightforward LLC or C-Corp formation in Delaware can be completed in 1–3 business days with expedited filing fees. Standard processing takes 7–10 business days. Total formation costs — including state filing fees, registered agent fees, and legal fees for drafting an Operating Agreement or Bylaws — typically range from $1,500 to $5,000 depending on complexity.

For Turkish companies, the corporate formation process is the foundation of the U.S. market entry. Getting the structure right from the outset — choosing the appropriate entity type, state of incorporation, and governance framework — avoids costly restructuring later and positions the business for growth, investment, and eventual exit.

ULF New York advises Turkish founders and companies at every stage of this process, from initial entity selection through ongoing compliance and governance.