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Military Serving Overseas & You Want to Open a Small Business

Military Overseas Starting a BusinessI don’t hide that I serve overseas in South Korea, but I don’t discuss it a whole lot either because I don’t create content about it, and it’s not for long as I retire at the end of this year. What is important is that I searched for months, asked experts, and still came up empty handed on how to open a LLC while serving overseas with no stateside address. I finally know how, and I did it so it’s time for me to share how to do it and be the only resource that solves this question that I know of in Google’s results.

For the most part this is only going to be helpful for anyone stationed outside of the U.S. to include spouses that want to operate a real company for whatever reasons and to be legit for tax time. When you are like me and plan to be an expat, stationed in Japan for like 8, or fell in love with Germany and isn’t coming back for years and want to learn how to run a small business, it can be almost impossible to find information on how to do just that. This was my issue and I want to change the conversation that helps the Mrs run a Scentsy small business, or the husband to build websites on eLance.

Full disclosures upfront are important as well. The following information, like much of my website, is not sponsored or affiliate links. This is only my own experience and the processes that I went through to processing, building the to-do list, and finally owning & running Adding Social, LLC based in Colorado Springs, CO.

All of that is legit while I am living in South Korea. I am emphasizing this to make clear that there are no “tricks” or “hacks” to get this either. This is strictly a legit process that is completely bulletproof, before going into starting this.

Step 1: Grab an EIN

The IRS makes me nervous, scared, uncomfortable and many other words because of the power it wields over a person or a company’s fate. Trust me though, this is very simple and doesn’t affect anything. I put my fears aside and dove in to come out with a new EIN in less than 3 minutes. The point I would emphasize is to have all your information ready before you get one otherwise you might be delaying your process.

I made a critical error and one that I am happy to share. I didn’t know what my company name was going to be because I thought I would worry about that in the next step. The 1st thing that came to mind was TMF Group, LLC. It stood for The Mulholland Foundation Group, and I was stoked because I got the EIN and thought it was perfect…until I went to go register the domain. So there is a rather large company called TMF Group, LLC and now I couldn’t use this EIN or buy a domain for it unless I wanted to get sued for trademarks or whatever else they could sue for. I don’t have the stomach for lawsuits I know I will lose so there is that. You can only get 1 EIN per 24-hours. Ya…I had to wait, but I learned my lesson and got the company domain/name and then went back for the EIN with everything in hand.

You might ask why I didn’t just go through the process of sending in the paperwork to change the name on the EIN. I hate paperwork and it would have taken weeks or even months. Instead, I will just wait the 24-hours and get a new one the right way. There is no harm in just getting a new EIN and if the IRS wanted a simpler solution to update the information on an EIN they could make it all electronic. We can’t have easy or fast though. /s

Moving forward, this is the pathway to get this important piece:

  1. Go to the small business employer identification number (EIN) page.
  2. You need to have it done within 15-minutes, and have all your information such as business name and personal address.
  3. Do not start the application until you have a business name, and bought the “yourbusinessname.com”. If you can’t buy the .com then don’t use the name.
  4. Are we good? Now proceed to applying for the number.
  5. Done, you can print or save your EIN page in PDF. Do both because you do not want this to be lost.

Step 2: Find a State & a Register Agent

I know that by setting up previous companies that I need what’s called a registered agent. This is the address of the person/company that can receive correspondence such as a lawsuit or other important information on your behalf. This is the cost of doing business unless you are living in the state and can use your own address but this article is not about that. So either way, you need to establish your LLC with the state of your choice and the registered agent can make this very easy for you. I personally used Northwest Registered Agent for Adding Social, LLC because they were easy, gives you a choice of all 50 states and handle everything quickly. They are literally everywhere and I didn’t find another company with the same frictionless website. There may be others so if you do this with another company please let me know in the comments so I can add them.

I get nothing by telling you to use the one I used. Please use whoever you want, but my experience with NWRA gave me the chance to see the cost and processing time of each state. The have a section that allows you to use dropdowns to see the cost and time per state. My choice was Colorado which is a total of $275 which includes their fee and the state’s fee and is the cheapest of all states. After the first payment (1st year setup), I will continue to pay $125/yr to keep it going. The best part of choosing Colorado was the cost. The bonus is the state does everything online. I got everything done and certified in less than 24-hours.

I know that $275 might be a lot, but the rest of the states are higher priced and some states like Alaska have a 90-day processing fee. I took the cheapest and easiest. There you go Colorado, you have my money and stamp of approval. Again, you may have other reasons to choose somewhere else based on taxes or whatever reason. My requirements were very easy to meet by going this route.

Step 3: Get an Address

You can do this prior to both steps 1 or 2. I don’t think it really mattered in my case so I am just going in the order that I personally went through. In fact, knowing everything I know now, I would probably make this step 1, then the EIN, followed by the registered agent. I am noting this before going into the next paragraph so you are aware that you can go out of order and it will all be just fine. I know plenty of people that see a process like this and have to follow it to a tee. Back to Step 3…

I am in South Korea and haven’t been in the U.S. in 4 years. Where am I going to get an address in Colorado? I don’t want to involve friends or family just to save a few dollars, and those don’t mix well with business anyways. That led me to searching for weeks and I finally found a “Virtual Office or Address”. It took weeks because I didn’t know what I was searching for. There are lots of companies that provide a legit address for you to get mail and they will scan it or send it for you. I stayed away from companies that decided certain states deserved a “premium price” because I doubt their benefits after seeing that I can’t get a straight-forward solution.

Ultimately I decided on iPostal1 because of price and options. I don’t want mail because I am an online company and I also love trees. Snail mail in 2016 shouldn’t be a thing, but it happens so what can you do? You can choose any digital mailbox that fits your needs. I spent about 1-2 days going through a bunch of them and the plans they offered. I simply needed a legit address in Colorado that wouldn’t charge me an arm and a leg. Again, iPostal worked for me, but you go and make sure there isn’t a better deal, and if you find a better option please tell me so I can plan for next year’s change.

Step 4: Apply for the Bank Account

A bank account is a must if you plan on using money to do business with and being overseas makes this really, really difficult. I was nervous that I was going to be denied based on addresses or credit score, but you have to do this step regardless so off I went to find a bank. Here, where I am located, the Navy Federal Credit Union is across the street so I walked over and asked if they offer business accounts. They do! This was very exciting since USAA didn’t even offer these. The emotions were high because I was making progress so I had to make sure I had everything together. When everything you do counts on being right and accurate, it’s this step you don’t want to get wrong. You need the following printed when you go in so you are well equipped:

  • IRS EIN number
  • LLC/Register Agent Paperwork validating your company in the state of your choice.
  • Secretary of State’s Good Standing letter. Colorado digitally built mine upfront but some states don’t issue it until 12 months.
  • A Business Address
  • The completed NFCU Business Application (I typed mine up for ease)
  • Forms and entities info is here.
  • Items such as a business license, Articles of Organization, Operating Agreement. Mine was done and online on the Colorado SoS site.

I love Colorado for ease of everything and not charging so much comparatively to other states. Because of the easy process Colorado provided me that if I choose to come back to the states in the future and stop being an expat that I will live there. The Springs are so beautiful anyways and Denver has an international airport.

Step 5: Build the Website (Optional in some cases)

This is the heavy lifting part. Everything you did prior to this so you can be legit is peanuts compared to actually building a website. I know that all of those Wix and Squarespace commercials makes it look easy but it depends on what kind of business you are building. For myself I have to have a server and actually build a website. I need access to the server and freedom to develop sandboxes and a more robust presence. There are many areas in the spectrum so this is where you truly need to sit down and decide what you need. I go into depth in other articles about developing websites so I am going to avoid that here.

If you can get by without a ton of developing and just need a homepage then by all means pick Wix or Squarespace to get the job done. Many friends have gone this route to sell items without hiring a team of computer engineers to get that Paypal transaction. Unless your business can be done completely offline it’s very possible you will need some type of web presence. If you are unsure about this step and want to pick my brain just send me a message through the contact page. I will try to help answer your requirements the best I can. Please include as much information as possible, and if you need a consult then please use the booking option in the shop to schedule time with me. I would be happy to help and I won’t charge a ton for my time.

Step 6: Payment Processors

Unless you strictly plan on dealing in cash, Bitcoin, or checks this part is important. You have to have a way to move money from your customer to your bank account. Now this can be the worst step of them all. I used Warehouse Merchants and a few others during my time in the challenge coin business and they are truly predators that I will never recommend. They are difficult to deal with, charge a lot for a terminal and payment processing, and overall hurt my bottom line. Things have changed since those days. We now have bigger options and better companies that offer better solutions. I had to use them in order to use Authorize.net so I could take Visa & Mastercard. I have a strong hate for all of the previously mentioned.

We can’t escape it completely though. I truly hope you take a lot of time to research in merchant accounts if you need them. You need to know their terms of service and the cost of doing business upfront. I know we all just click a box to accept their terms, but I implore you not to skip this one. Some of those companies will attach enormous termination fees, large percentages of each sale and other lawfully binding inclusions that you need to know before signing up.

My choice is Bitcoin, Stripe and cash if someone wants to pay that way. They can wire it to my bank account if the sum is large enough. You might be wondering why Paypal is not in there. I hate Paypal. I will never use them in my business(es) or recommend them to anyone. They are too big to care about your business. They freeze accounts, terminate, offer indignant customer service, and we should all stop using them. Google “Paypal Complaints” and see for yourself. Some are not legit, but I dealt with their arbitrary risk assessments more times than I care to remember. They make every dealing difficult if they so choose. They also don’t support many types of businesses and I personally support the livelihood of any legal business. They are a terrible company if you didn’t catch that in this paragraph.

Square is another great company that I have used but overseas is difficult to swipe cards unless you plan on selling on base in-person. There are options out there and you have to dig in to make sure you make the right commitments for your business. This is not the area you want to gloss over.

Summing Up the Experience

The months leading up to this were frustrating because I came up empty handed every time I search for information. Serving overseas is difficult and especially for the spouses that are not in the military. Those stay at home moms or dads can lose their minds because they don’t have employment opportunities in many cases. This unfulfilled part of being in a foreign country can cause emotional distress for some. It could affect your relationship or your future even. Spouses that PCS every few years struggle to have a career of their own and can be devastating emotionally because they may want to financially help too. Here at Osan AB spouses have to be waitresses for less than $4/hour in some places, or working on some concessionaire while being hit on by every single male that walks by. There isn’t many civilian jobs offered and this causes many spouses to be unhappy with the assignment.

I know first hand that working and bringing in money to the joint bank account is important to many. Being overseas provides little employment opportunities, thankless volunteering situations, or meetups at the base Starbucks to have an expensive coffee and vent about the lack of opportunities with other spouses. The problem is real and often not discussed in length. I will sing a praise to a program called Boots to Business that any military member or spouse can take. It’s a 2-day class that helps cover topics on how to go back to the U.S. and build a business. Sadly, none of this article could be answered in that class.

Once I dissected the issue piece by piece it became clearer as I went on to each step to getting my business started. You may be in the same situation which is why I am sharing this. If it doesn’t help you then maybe it will help a friend or a family member in this situation. If I missed something or you can add to this in the comments I would be grateful. I want others to have the opportunities to be entrepreneurs and start making money while serving outside of the United States!

Lastly, thank you for your sacrifice, your service, and may you have successes in your future endeavors.

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