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An Employer Identification Number (EIN) – sometimes called a Federal Employer Identification Number or IRS Employer Identification Number – is a unique nine-digit number issued by the IRS to identify a business for tax purposes.
It’s basically your company’s Social Security number (SSN). Where an SSN identifies an individual in the US tax system, your EIN identifies your business. Without one, you can’t hire employees, pay certain taxes, open a U.S. business bank account, or apply for the licenses your business might need.
If you’re a global employer, an EIN is often the very first thing you’ll need before you can operate legally in the United States. It unlocks payroll, compliance, and financial systems, making it an essential step in expanding into the U.S. market.
Why an EIN Matters for Global Employers
Let’s say you run a software company in Berlin. You’ve just landed a big client in New York and want to hire a project manager locally to oversee the work. You’ve found the perfect person, but you can’t legally put them on your payroll until you have your EIN.
Without it, you might face:
- Payroll Delays: US payroll providers require an EIN to process wages.
- Banking Roadblocks: Most U.S. banks will not open a business account without one.
- Compliance Issues: Failing to file taxes with all of the correct information will mean penalties from the IRS.
With it, you can:
- Pay Employees Legally: Required for wage reporting and withholding taxes.
- File Business Taxes: For employment, corporate, or excise taxes.
- Open US-Based Bank Accounts: Essential for local payments and building credit.
- Apply for Business Licenses: Some state and local permits in industries like health and safety, retail, and construction for example, require an EIN.
- Separate Business & Personal Finances: Protect your personal SSN and reduce identity theft risks.
For global companies, having an EIN also streamlines paperwork for forms like W-2 (employee wage reporting), W-8BEN (foreign status), and 941 (employer’s quarterly tax return).
EIN vs. Other Tax Identification Numbers
The US tax system uses several different tax identifiers. Here’s how an EIN compares:
If you’re a business, especially a foreign one hiring in the U.S., you’ll almost always be dealing with an EIN, not an SSN or ITIN.
Who Needs an EIN?
You’ll likely need to apply for a federal ID number if your business:
- Hires employees in the U.S. (even one part-time worker)
- Operates as a corporation, partnership, or multi-member LLC
- Runs a nonprofit in the U.S.
- Withholds taxes for non-U.S. persons
- Wants to open a US business bank account
- Needs state or federal business licenses or permits, particularly if you’re operating in the healthcare, finance, food service, or alcohol sales industries
Even if you’re not legally required to have one, it’s often worth applying anyway, especially to boost your credibility with banks, vendors, and any U.S.-based partners. Many global founders secure an EIN as part of their early expansion checklist.
How to Apply for an EIN
The good news is that applying for an EIN is free, and the process is simpler than most people expect. That being said, you’ll need to take into account that international applications will take a bit longer to process, since not all methods are available outside the U.S.
Here’s what the process looks like from start to finish.
1. Check if you need one.
If you’re paying U.S. employees, opening a bank account, or filing taxes in the U.S., you do!
2. Gather your information.
- Legal business name
- Physical and mailing address
- Name and SSN/ITIN of your “responsible party” (an individual who can act on behalf of the business)
3. Choose your application method.
Online
This is the fastest way to get an EIN, with your number issued instantly once you complete the application. However, it’s only available to businesses that have a US address and a responsible party with a valid US-issued taxpayer ID (SSN, ITIN, or EIN).
If you meet these requirements, you can apply directly through the official IRS website.
By Phone
This is the primary method for international applicants who don’t have a US address or taxpayer ID. You can call the IRS at +1-267-941-1099 between 6 a.m. and 11 p.m. Eastern Time, Monday through Friday.
Once your application is reviewed and approved over the phone, your EIN will be issued immediately. It’s best to call as soon as the phone lines open to avoid long wait times, and have your completed Form SS-4 in front of you for reference.
By Fax
You can complete Form SS-4 and send it to the IRS by fax. US applicants should use 855-641-6935, while international applicants should fax their forms to 304-707-9471.
Processing generally takes around four business days, and if you include a return fax number, the IRS will send your EIN confirmation back via fax.
By Mail
This is the slowest option, but it works for both US and international applicants. Mail your completed Form SS-4 to the IRS office in Cincinnati, Ohio (address details are listed on the IRS website).
Processing typically takes up to four weeks, but it can be longer during busy tax periods. This method is best if you are not in a rush and prefer to keep all documentation in paper form.
Common EIN Challenges for International Employers
Even though getting an EIN is free and relatively straightforward to apply for, international employers can run into a few hurdles. Knowing these in advance and how to avoid them will save you time, money, and a lot of frustration.
1. Limited Online Access
The IRS’s online application system is only available to businesses with a US address and a responsible party who has a valid US-issued taxpayer ID. This means most non-US companies are excluded from the fastest application method.
Instead, you’ll need to apply by phone, fax, or mail. Each of these options works, but they’re slower and can require more preparation – especially if you’re in a different time zone or need to coordinate paperwork across multiple teams.
2. Long Hold Times
If you’re applying by phone, you’ll call the IRS Business & Specialty Tax Line for international applicants. The line is notorious for long waits – sometimes over an hour during peak tax season.
Since the phone line operates on U.S. Eastern Time, international applicants might have to call outside your regular business hours.
3. Scam Websites
Because EINs are so essential, plenty of unofficial websites pretend to “help” you apply – for a fee. The IRS does not charge for EIN applications, so any site that does is either a middleman adding unnecessary costs or an outright scam.
4. Needing a New EIN
Once issued, an EIN generally stays with your business for life. However, there are situations where you’ll need to apply for a new one. These include:
- You change your business structure (e.g., from a sole proprietorship to a corporation)
- You’re acquired by or merge with another company
- Your business becomes a subsidiary of another entity
- There’s a complete change in ownership
Playroll provides secure EOR services that’ll see you hiring and onboarding employees quickly and compliantly, with every HR solution you need built into one, intuitive platform.
Speak to an Expert
Employer Identification Numbers FAQs
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Yes, international businesses can get an EID but you’ll need to apply by phone, fax, or mail if you don’t have a US address.
The wait time for an employer identification number application will depend on your application method. Phone applications can be completed the same day, fax takes around four business days, and mail can take up to four weeks.
You only need a new EID if ownership or entity type of your business changes. Take for example if you switch from a sole proprietorship to a corporation, you’ll need a new EID.
ABOUT THE AUTHOR
Jaime Watkins
Jaime is a content specialist at Playroll, specializing in global HR trends and compliance. With a strong background in languages and writing, she turns complex employment issues into clear insights to help employers stay ahead of the curve in an ever-changing global workforce.
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