Where to start — sequence is money

Start with a realistic timeline

The published figures for how long each step takes are as follows. Steps can overlap, but the longest one sets the overall schedule.

• Design, permits and construction — One industry article says commercial construction that needs a permit takes "at least 8 months": 2 months for design and permit drawings, 3 months for permitting and bidding, and 3 months for on-site construction. Plan review time varies by city from 10 days to 90 days (industry source).
• Liquor license — California's investigation usually takes 55–65 days, New York takes about 22–26 weeks (about 30 days for a temporary permit), Texas takes about 45–60 days, and Washington State advises applying about 90 days before opening (each state's liquor authority).
• Conditional use permit — Example: in the City of Los Angeles, a permit to sell alcohol (CUB) goes through a public hearing and, according to a 2020 report, took at least 6 months.

So if you are building a new noraebang that serves alcohol, we recommend that you first work out the funds needed to last about one year from signing the lease to opening. This period is our rough estimate from adding up the figures above, and it varies widely with the area and the condition of the building.

Check your immigration status and eligibility first

• E-2 investor visa — Korea is a treaty country. You must invest substantial capital in a real business and hold at least 50% ownership or operational control. There is no fixed minimum amount; it is judged as a proportion of the total cost of the business, and a business that only provides a bare living does not qualify (USCIS).
• Citizenship requirements for a liquor license differ by state — Example: New York Alcoholic Beverage Control Law §126 in principle allows a license only to U.S. citizens or permanent residents, and applies the same requirement to corporate officers and directors. We could not verify the scope of the exceptions (such as nationals of treaty countries) or whether E-2 status is sufficient. Other states have their own requirements, so ask an immigration attorney and a liquor license attorney before you look at locations.
• Tax number — If you do not have an SSN, apply for an ITIN (IRS Form W-7). An ITIN is only a tax number. It does not give work authorization or immigration status.

Form the business entity

• Structure — An LLC in most cases separates your personal assets from business debts, and profits and losses pass through to your personal income. A C corporation gives strong liability protection but is taxed twice, through corporate tax and tax on dividends. A nonresident alien cannot be a shareholder of an S corporation (SBA). Decide with an accountant which is better for you.
• EIN — This is the federal employer identification number. It is free and the online application takes a few minutes, but the responsible party's SSN or ITIN is required (IRS).
• Trade name registration (DBA) — If the name on your sign differs from the legal entity name, register it with the county. Fees and publication requirements differ by county.
• Beneficial ownership reporting (BOI) — According to a FinCEN notice, companies formed in the United States have been exempted from the reporting requirement. Entities formed under foreign law and registered in the United States are covered. Check the current rules with your accountant when you form the entity.

Building new versus taking over an existing venue

From what we saw while researching our list of Korean noraebang in the U.S., taking over an existing venue appeared more often than opening an entirely new one. The advantage of a takeover is that you get a location that already has use approval and fire protection systems in place. The risk is that you may inherit the previous owner's violation history and unpaid obligations. What to check in a takeover is set out separately in the Location & Lease section.