Expanding Your Business to the USA – A Complete Guide
Expanding Your Business to USA – A Complete Guide
Expanding Your Business to the USA, We are bringing up everything you need to know while setting up your business in the USA. To set up a business in the USA, you need not be a resident or citizen of the USA. As per US Law, any one from around the world can set up their business entity in the USA and can operate it remotely from their home country.
Why is USA Company registration beneficial for foreign businesses?
Setting up your company in the USA will:
- Increase your company’s credibility.
- Gain access to a large customer base
- Allow you to accept payments in the USA, as a domestic company
- Receiving payments from clients from other countries is easy in the USA
- Simple Incorporation procedure which reduces your work and allows you to focus more on your business.
- Increases trust in your company among your customers.
- While you operate from your home country, your sales may be considered as export of products/services and hence you may save domestic Sales Tax as many countries promote exports.
- The company rules and regulations are well-formed.
- Corporate income tax rates are low making it incredibly attractive for international businesses to invest.
It should be noted, however, that each state in the United States is regulated by its own set of rules and regulations, which vary greatly from one another. States like Delaware, Wyoming, and Nevada have the most complementary business and taxes regulations, making it easier for businesses to incorporate.
Delaware, in particular, has no state sales tax, and the state’s franchise tax for small US enterprises is likewise little. Furthermore, non-residents are not required to pay a separate business income tax in Delaware.
Besides that, here are some more benefits
- The rules and regulations are favorable to business.
- Personal assets, such as homes and money, are protected from obligations since there is little responsibility.
- The rates of corporate income taxation are modest.
- The identities of the company’s shareholders and directors are not required to be disclosed under the legislation.
USA Company formation is now very simple because there is no need to go to or physically be present in the United States. Non-US businesses wishing to develop or have a non-resident Indian customer base can benefit from a number of USA company registration benefits.
Because of its sophisticated infrastructure, technology, and enormous natural resources, the United States, as a developed nation, is an economic powerhouse. The economy is service-oriented, with services accounting for 80 percent of GDP and manufacturing accounting for around 15 percent.
With fast expansion and globalization, as well as a sizable English-speaking population, Indian enterprises have a distinct advantage when it comes to entering the American market. Most Indian enterprises with global aspirations believe that the United States is the best choice since it has the lowest corporation taxes and well-established business rules and procedures.
The Company Incorporation In United States of America
For the United States, the first step has been taken. The process of registering a company begins with uploading the necessary paperwork to the ICFO portal. Our business expert will then double-check the information and papers.
Simultaneously, we attempt to register the name and check its availability. After the name has been registered, we may go on to the third stage.
The process of preparing the AOA begins once the name is registered. Before registering a corporation in the United States, the directors, shareholders, and the secretary must sign this document. Our business adviser will keep you informed of the company registration procedure at all times.
After completing the AOA, the firm is formed, and the next step is to apply for an Employer Identification Number (EIN) from the United States.
Strategies for Entering the United States
In the United States, businesses can be formed as a single proprietorship, general partnership, limited liability company (LLC), or corporation. However, Indian corporations may only register as LLC or a C company in the United States.
In the United States, the rules and regulations governing the formation and operation of limited liability companies (LLCs) or corporations varied from one state to the next. We incorporate all LLCs or Corporations for Indian Nationals in Delaware since company registration in Delaware offers several advantages such as cheap taxes, low maintenance costs, and strong corporate regulations.
Incorporating in Delaware is a wonderful alternative not just for Indian nationals and firms, but also for American enterprises, as more than half of publicly listed and Fortune 500 companies in the United States are established in Delaware.
Rate of Corporate Taxation
In the United States, LLCs and corporations are subject to two types of corporate income taxes: federal corporate tax and state corporate tax. The Federal Corporate Income Tax Rate was recently decreased from 35% to 21% by the Tax Cuts and Jobs Act (TCJA).
The corporate income tax rate varies by state in the United States. The lowest is 3% in North Carolina and the highest is 12% in Iowa. Corporate taxes in Delaware are charged at 8.7 percent of net profits. However, if a company is formed in Delaware but does not conduct business in the state, no state corporation tax is charged. As a result, foreign nationals and corporations intending to do business in the United States through Delaware should consider incorporating in Delaware.
Limited Liability Company (Limited Liability Company)
A limited liability company (LLC) is a form of business that combines the characteristics of a corporation and a partnership. In the event of a lawsuit or even bankruptcy, the owners are protected by a limited liability company. LLCs are more adaptable, and their compliance needs are straightforward.
A company requires resolutions and shareholder meetings, as well as the recording and filing of paperwork documenting meetings and votes. LLCs, on the other hand, do not require annual shareholder meetings.
If the intention is to seek money from VCs and angel investors, it is preferable to form a C company in the United States. Bankers, investors, customers, suppliers, and workers all believe that corporations are excellent for the majority of firms.
C-Corporations are distinct legal entities from the persons who own, control and manage them. As a result, it is treated as a normal person under tax regulations and can participate in the business, contracts can initiate lawsuits and be sued.
Choose the State where you like to incorporate
In the United States, you can incorporate a corporation or limited liability company (LLC) in any of the 50 states or the District of Columbia. The state you choose will be determined by the reason for the company’s formation. Delaware, Nevada, and Wyoming, in particular, are more “business-friendly” or “international-friendly” than others. We incorporate your company in any of the 50 states in the USA.
What is required for me to form a company in the USA?
There are few basic requirements we need to form a company for you, The requirements are simple and mostly you will have all those needed at tip of your finger.
Decide Name of your company
You’ll need to come up with a name for your business. State-specific business entity names exist in the United States. Hence it is most likely that the name you choose is available for registration, unless it is too generic name.
What Type of Company To Form?
When you decide to start a business in the United States, the next question on your mind is what form of business to register. There are two sorts of companies that a non-resident might pick from. LLC and C-Corp (Corporation). Both have their own set of benefits. The dilemma now is whether you should form a C-Corp or an LLC. It is dependent on your needs. A limited liability company (LLC) is a ‘pass-through’ tax entity. In the same way that money from a sole proprietorship or general partnership passes through to the owners, income from an LLC does as well. However, from a tax sense, LLCs might be treated similarly to C-Corps. C-Corporations, on the other hand, are taxed as independent companies. If profits are given to the owners as dividends, they are subject to ‘double taxation.’ Because shareholders can hold various sorts of stock interests, a C-corp is frequently the preferred incorporation choice of emerging businesses. However, for small firms, an LLC is preferable. You might be able to simply change the assets of your LLC into a new C-Corp as time goes on.
Which state I should incorporate my LLC or Corporation?
As a foreigner, you have the option of forming your corporation in any of the USA’s 52 states. Various states, however, have different restrictions and taxes. For example, Delaware has lower taxes for the first year, but from the second year forward, it will be higher than other states. Wyoming and New Mexico have the lowest tax rates. New York has a rule that requires you to publish your company in two daily newspapers after incorporation, which could cost you extra money. As a result, the cost of registration may differ based on the state in which you intend to incorporate. You may choose to go with Delaware if you plan to obtain investment, or want to do a holding company. Note that the annual state tax in Delaware is 300$ as compared to 60$ in Wyoming.
What are the things I need before I incorporate my business in the USA?
To register your company in the USA, you are required to have a Registered Agent and a registered address for your company. In US Business law, a registered agent is an individual or company designated to receive service of process (SOP) on behalf of your business. You can be your own registered agent if you are residing at your company address. You may need to provide an address as the registered address of your company. If you aren’t receiving. In the US or if you do not have a US address which you can use for your company, there are many virtual address providers from whom you can take service from. Most of the Incorporation agencies will provide you with both a Registered agency and an address. They will take care of all postal mails received on your behalf and will scan and sent them to you via email.
Once you are done with Incorporation..
When your company is incorporated, your agency may give you the state documents and operating agreement draft. The operating agreement draft is an internal document of your company. You can discuss with the members/directors and come up with terms and ownership percentages. Once you complete the draft, you can mutually sign and keep it them in your legal files.
Once you do your state incorporation you need to get your EIN (Employer Identification Number), also called Federal Tax ID. This may take 5-10 business days, if You are a foreigner. Once you obtain your EIN, you can approach any US banks to obtain a bank account for your newly registered Company. If you are a foreigner, US banks require you to be physically present at the branch to open a business checking account in your company name.
We at UCB Business Solutions can help you to obtain a business checking account, without physically visiting the USA, Without adding any third party signatory. There are other ways to open a business account by adding a third-party signatory. However, it has certain risks associated.