Do you plan to start an online store? Starting any business can have a lot of steps to take, and Amazon is no different. Amazon has its own rules and regulations, which means you need to obtain specific information before you can start selling on Amazon as a formal business owner. If this sounds daunting, don’t worry!
I want to help you with one of the more intimidating tasks, which is obtaining an FEIN so you can get your business off the ground!
In this blog post, I will guide you through what Amazon FEIN number is for, why it is necessary, and how to obtain an FEIN from both inside and outside of the United States.
What is the Amazon FEIN Number?
An Employer Identification Number (EIN) is a nine-digit number the IRS uses to identify and keep records of business entities. It is in the format XX-XXXXXXX. EIN is also known as a Federal Tax Identification Number and Federal Employer Identification Number (FEIN).
Each state has different requirements, which can be viewed here. Be aware that obtaining an EIN/FEIN is a free, online service by the IRS, and it does not take too long to process one.
Some get confused between an EIN and a Social Security Number (SSN), and the difference is that EIN identifies businesses completely separate from their owners. An SSN is for the personal tax filings of a specific individual, not for a business.
If your Amazon business takes off and you aim to start employing, you will also need a State Employer Identification Number (SEIN).
Why Do I Need an EIN?
Business Owner’s Protection
Although Amazon does not require a seller to own a business to be able to sell on the platform, I personally recommend that any hopeful Amazon seller sets up an LLC. It protects the business owner’s personal assets and prevents any lawsuits against them. Having an LLC puts liabilities on the company, and not the business owner.
Although an EIN/FEIN can be processed on your own, I recommend going through the legal process to ensure it being done properly. RocketLawyer is an affordable option to help you set up your own business, and they will get your EIN/FEIN for you.
Identifying Sellers
Amazon also uses the EIN/FEIN to identify the sellers on their platform, including tracking multiple seller accounts. Many sellers have similar storefront names, and identifying them by their EIN is much more accurate and faster than keeping track of them simply by their storefront names, account owner names, and other info.
IRS Requirements
An EIN/FEIN is generally required for businesses operating in the United States, so it is not unique to Amazon’s platform. Businesses use EINs to file their taxes as well as apply for licenses and loans. Non-profit organizations disclose their EIN for donors to report to the IRS that their contribution is for a tax write-off. Freelancers without employees do not need an EIN.
Amazon wants to comply with the IRS to make sure that their sellers who do own a business pay proper taxes.
If you are setting up a business, whether it’s a Corporation, LLC, or Partnership (or a sole proprietorship with employees), you will need to apply for an EIN/FEIN from the IRS because it is one of the requirements to be able to open a business bank account or process payroll.
How Can I Obtain an EIN (U.S. Residents)?
As mentioned earlier, I recommend that making a big move is done with legal help to avoid making any mistakes. Starting an LLC compared to other business types is the best option, because members aren’t responsible for any of the liabilities and debts that may be incurred by the business.
Each LLC member’s personal liability is only limited to the amount that has been invested into the company. This helps protect their personal assets, because they exist separately from the business.
There are affordable companies, like Rocket Lawyer, that take care of getting an EIN for business owners, and they will also conveniently be there to answer any legal questions.
I’ve created a video tutorial on how to open an LLC for an Amazon business.
However, if you insist on applying for one by yourself, it can be done on the IRS website. To apply for EIN online, the business should be located in the U.S. or U.S. Territories. The individual applying for the EIN must have a valid Taxpayer Identification Number (SSN, ITIN, EIN).
If you don’t want to apply online, you can apply by fax as well. There is a different process of application for those applying who are outside of the US, which is by telephone.
The application process asks questions like:
- Type of business
- The number of members of the business
- Why an EIN is being requested
- The responsible party of the EIN
- Personal information of the responsible party for the EIN
- Location and contact information of the business
- Further information of the business (legal name, trade name, location, etc.)
- Additional Yes or No questions about the business
- Nature/Line of business
To read all about applying for an EIN, view the IRS’s article here.
How Can I Get an EIN from Outside the U.S.?
To obtain an EIN/FEIN from outside of the United States, you should either be the individual applying or an authorized person to apply on behalf of the individual requesting for the EIN/FEIN. Many services offer services to obtain an EIN for individuals who are overseas, which is my suggestion for the smoothest experience.
If you do choose to have a representative apply on your behalf, such as an attorney, fill out the Third Party Designee section of the form. Otherwise, leave that section of the form blank. To ensure that the authorization is valid, fill out the signature area.
However you choose to get your EIN, you will have to provide the information indicated in Form SS-4.
The form asks general questions regarding your business similar to the questions asked on the online application. This includes a U.S. mailing address, the type of business you have, your reason for applying for an EIN, and your nature/line of business.
Read the IRS’s instructions for filling out a complete Form SS-4 here.
You can apply for an EIN outside of the U.S. (or talk to an attorney about applying on your behalf) through the following methods:
Telephone
The IRS website indicates that International applicants can call the IRS at +1 (267) 941-1099. This is not a toll-free number. The voice prompt requires applicants to press the number command for requesting a foreign EIN.
Phone call hours of operation are Monday to Friday from 6am to 11pm (Eastern Standard Time).
If you do this yourself, allot a lot of free time, and expect to be put on hold several times while speaking with an IRS representative. This process is not as fast as the 15 minutes it takes to apply online for applicants who live in the US. That is why many choose to hire an attorney to do this for them to avoid errors and save time.
Towards the end of the call, the EIN will be given, which is already valid for use. The physical documentation for the EIN is physically mailed after several weeks, so make sure to write the EIN down during the phone call and keep it where it won’t get lost.
Fax
The fax number for the IRS for applicants outside the U.S. is +1 (304) 707-9471. This is the number where applicants send their completed Form SS-4. Include your own fax number (or your attorney will use their own) on the application so the IRS knows where to send back a fax with the EIN, which takes the IRS approximately 4 days.
If you do not have any legal residence, principal place of business, or principal office or agency in any of the 50 states, you or your attorney may mail your completed Form SS-4 to
Internal Revenue Service
Attn: EIN International Operation
Cincinnati, OH 45999
It takes the IRS approximately 4 weeks to mail back an applicant’s EIN.
Final Thoughts
Hopefully, this article has been helpful in answering any questions you may have had about the purpose of the EIN/FEIN and how to apply for one.
If you’re located in the U.S. starting a new LLC and sell on Amazon, it’s part of the process that you register for an EIN/FEIN so that Amazon is complying with the IRS’s requirements for businesses to pay proper yearly taxes.
Even if you want to operate from outside of the U.S., obtaining an EIN/FEIN is a small but significant step to sell on the Amazon marketplace!
As always, I recommend that you talk to an attorney and tax professional when making big business moves and decisions.
Are there any other questions I haven’t answered? Let me know by leaving a comment below or contact me!