A company registered in a foreign country is a powerful business expansion instrument. A company registered in the United States of America in particular can also serve as an efficient fundraising tool. After all, the USA is the biggest economy in the world. The advantages of establishing a business entity in the jurisdiction are numerous and impressive. The most important of them include the following ones:
- Business reputation improvement. American-based companies are trusted throughout the world. You can easily enter multiple business agreements if you use your company registered in America.
- Geographical extension of your business. In addition to the US market, your company registered in the country will also give you access to Canadian markets that are also very large. Besides, you will be able to use international trade platforms such as Amazon, for example. Extending the geography of your business operations can increase your profits greatly.
- Global delivery of goods. You can ship your products to any country of the world from the USA: seaports, airports, railroads, highways – you are free to use any means of transportation. The transportation infrastructure is very well developed in the USA.
- Tax advantages. Every state sets its own rules for foreigners. Some of them offer serious fiscal benefits to foreign nationals registering companies there.
- Qualified personnel. America is famous throughout the world for the high quality of education that it provides. You will have no trouble finding skilled specialists who can work for your company in the country.
- Technical innovations. America is not less famous for the innovative technologies that are developed there. The changes that have been taking place in the digital sphere in particular are simply amazing. You can make full use of all sorts of modern technologies if your company is stationed in America.
Obviously, you have to do market research and make a business plan before you start the process of registering a company in the USA. In addition to that, you will have to make several important choices. Sometimes the choices are going to be rather difficult but your success will largely depend on whether you make the right choice or not. Below we discuss the most important choices that you will have to make in the process of forming a company in the USA. We hope that the information that we provide will set you thinking in advance. In this way, you will be better equipped when it comes to filing the application documents to the State Department.
Choosing the state for your prospective company in the USA
Choosing the right state to set up a company is probably one of the most challenging tasks that you will have to solve. The USA is made up of 50 states and every state offers perks of various kinds to business people. The matter is that every state will have its own advantages and disadvantages (no state is perfect) and your choice will depend on what you are looking for.
Many entrepreneurs will naturally want to pay as little as possible in taxes, for example. You have to realize that income taxes, sales taxes, property taxes, corporate taxes, and other types of taxes are different from one American state to another. Some state administrations intentionally make their tax legislations beneficial for foreign entrepreneurs because they want to attract more business-minded people from abroad. If saving on taxes is among your top priorities, you can consider Wyoming or Delaware for establishing a company there. These states welcome foreign entrepreneurs.
Some other state administrations offer fiscal benefits to companies engaged in certain spheres of business. In still other cases, tax benefits are available to those companies that help to solve some socially important tasks. You may get a bonus of you create new jobs, for example, or if energy efficiency is one of the characteristics of your business, or if you help with the municipal housing projects, or if you develop socially significant technologies, and so on. Again, different states will offer different bonuses to entrepreneurs.
The choice of the state will also depend on where your primary customers and your partners are located. Please also note that minimal wages are not the same in all American states: each state will set its own limits.
You should also bear in mind the zoning issue. In many municipalities, the commercial zone is separated from the housing zone. This fact will have a direct bearing on your choice of the state in case you are planning to buy or rent production facilities or warehouses.
As you can see, America offers a wide diversity of options and choosing the right state for your company may not be so easy. International Wealth experts will gladly provide professional assistance to you if you would like to register a company in the USA. They know what American states are especially attractive for entrepreneurs from other countries.
Choosing the form of company ownership
Let us say straightforwardly that very few foreigners register sole proprietorships or partnerships in the USA. Any business venture is associated with risk and nobody wants his or her liability to be unlimited. An S-Corporation is a form of company ownership unavailable to foreigners as only US citizens and residents can be shareholders of an S-Corp.
Thus, you are left with the following choice: you can register a Limited Liability Company or a C-Corporation. Both forms of company ownership are legally available to foreigners in the USA and the company owners’ liability is limited in both cases.
An important characteristic of an LLC is that it is subject to pass-through taxation. That means that the income made by an LLC is declared as personal income of the company owner and the taxes are paid only once. Shareholders of a C-Corp. are taxed twice: first, the company pays the corporate income tax and then the shareholder pays the personal income tax on dividends. On the other hand, a C-Corporation has a much greater potential for attracting investments in comparison to an LLC. So once again, you have to make a rather hard decision when choosing the form of ownership for your company.
Choosing the bank for you American company
Unless yours is a holding company, you need a corporate bank account to carry out business operations. Banks are plentiful in the USA so you might think that you have a wide choice of options. Unfortunately, we will have to bring you down to earth: many American banks will deny services to foreigners. Even if you have a company registered in your name in America and you have obtained an Employer Identification Number, you may have a hard time trying to set up a corporate account with some banks.
At the same time, there are a few banks in the USA that will provide services to foreign corporate customers and these banks will offer different service conditions. Therefore, you will have to compare the banking products that different banks offer, the commissions that they charge, the quality of customer support that they have, and so on. In other words, you will have to make an important choice again.
As you can see, some intellectual power and some serious research is required if you want to set up a company in the United States. The task is performable, however (especially with some professional advice), and a company registered in the USA can bring you enormous benefits. It is certainly worth the effort!
