Opening a University - What You Need To Know Before You Start
What do I need to know as a foreign investor?
May 2, 2021
We provide the licensing and accreditation needed to establish a new university and offer comprehensive guidance throughout the process.
This involves helping our clients understand all the legal and financial requirements around university establishment, as well as providing marketing and branding advice to ensure their university or college stands out from other educational institutions.
Our competitors can only offer a limited service, either licensing or accreditation, as most don't have the skills or team required to provide a turnkey service. This is why EEC stands out from the crowd – we can offer our clients everything they need to get their university off the ground easily and efficiently.
This involves helping our clients understand all the legal and financial requirements around university establishment, as well as providing marketing and branding advice to ensure their university or college stands out from other educational institutions.
Our competitors can only offer a limited service, either licensing or accreditation, as most don't have the skills or team required to provide a turnkey service. This is why EEC stands out from the crowd – we can offer our clients everything they need to get their university off the ground easily and efficiently.
We aim to provide a complete service that will give our clients every chance of success when setting up their university. With EEC, you get a complete package of expertise and support for your university startup project.
At EEC we're looking at building a long-term relationship with our clients, where launching a university is only the first step.
We are confident that no other company can match our team of experts and their specialized knowledge.
At EEC we're looking at building a long-term relationship with our clients, where launching a university is only the first step.
We are confident that no other company can match our team of experts and their specialized knowledge.
If you are a foreign investor opening a university in the United States of America, here is what you need to know:
1. Business Set-Up: You can own a corporation in any State and run it remotely, but since you don't have a Social Security Number (a unique personal identifier for each person residing in the United States) you can only incorporate a C-Corporation. You can't own an LLC or an S-Corporation. If you don't know the difference between them, feel free to email me at sandra@experteduconsult.com for more information.
2. You will need to hire a "contact person" for the application: this person typically resides in the same State so that the regulators can send correspondence to this person's local (physical) address. In some states, like Florida, this person will be expected to attend the committee meeting where your application will be discussed to answer any questions by the regulator. This function is not the same as the "agent of service of process", who acts as the point of contact for all government, court, and IRS communication for your corporation. The application contact person should be knowledgeable of the application process and its requirements and should reply to any inquiries made by the regulator about your submission.
3. Longer processing time of your EIN: while it may take 24-48 hours to issue an employer identification number (EIN) for US residents submitting their applications online using their Social Security Number, your application for the EIN has to be sent to the IRS either by Fax or by mail and it takes 6-9 months to be issued. This will not delay the submission of your application for a license to operate a post-secondary educational institution, it may delay the start of your operations. A way around this would be to hire employees and contractors through a third party, like a hiring agency, until you get your EIN.
4. Opening a US bank account: the biggest challenge in starting a new university for my non-US redient clients has always been how to open a US bank account since US banks insist that the bank account owner must be present physically while opening the bank account. A workaround this hurdle is to hire a local executive whom you trust and this person can open the bank account for the company using the EIN number, the company's articles of incorporation, and the contract hiring this person as an executive in the company. You need to keep in mind that this person will technically "own" the bank account and all the funds in it and to protect your investment you will need to sign a legally binding contract that explains the relationship between the owner of the account and the corpoartion in clear terms.
5. Know the US laws and respect them: as a foreigner, there is a lot of laws that you might not be aware of which may be different than the laws in your home country and breaking these laws will make you liable and subject to penalties or worse. For example: as a corpoartion in the United States you must submit your tax returns every year even if you did not generate any income and failing to do so might result in fines. Another example is liabity claims, if a customer files a complaint against your business you might end up paying huge fines unless you have a liability insurance. A good rule of thumb is to have a consultant who will advise you regularly on these laws and your responsibilities as a business owner.
Conclusion
If you are a foreign investor who plans to start a private educational institute in the United States and have more questions, contact me for a 60 minutes free consultation at sandra@experteduconsult.com
