Are you considering establishing a business or branch in the United States, but uncertain if you're permitted as a foreigner to start a company there?
There are numerous compelling reasons to embark on this journey. The U.S. offers a favorable business climate, exceptional infrastructure, reliable suppliers, and access to top-tier talent. Whether it's the entrepreneurial environment or cutting-edge technology that attracts you, everyone has their unique reasons for choosing the US.
Curious about what the United States can offer your business? Explore the opportunities today!
If you're curious about how to launch a business in the US as a foreign entrepreneur, this page will guide you through simplifying the process. Before outlining the steps you need to take, let's explore the advantages of establishing your enterprise in the USA. As we all know, entrepreneurs are always drawn to locations where they can maximize revenue and ensure the smooth operation of their organization.
Entering the American market can indeed be highly lucrative for companies based in Europe. Since you don't need to be a U.S. citizen and residency isn’t a requirement, non-American entrepreneurs are welcome to start or expand their businesses in this dynamic region.
Diversity and openness are highly valued in the United States. New entrepreneurs from various sectors and different countries are welcomed without difficulties. This inclusivity enables them to carve out their own space in the market. In the USA, they can invest their capital across sectors, gaining a competitive edge in one of the most accessible markets in the world.
Did you know that the United States offers the largest consumer market in the world? That's right—the United States of America boasts a GDP of $20 trillion and a population of 325 million people. GDP, or Gross Domestic Product, represents the total value of all goods and services produced over a specific time period. In fact, the U.S. has the highest household spending globally, accounting for approximately one-third of worldwide household consumption.
Additionally, the U.S. provides free trade agreements with nearly 20 other countries, granting access to hundreds of millions of additional customers. More importantly, the United States continues to collaborate with various companies to enhance opportunities for American exporters.
The United States is also recognized as a leading force in the research and development (R&D) sector. Moreover, the U.S. registers more international patents than any other country. Today's brilliant minds are safeguarded by a robust intellectual property protection framework, while the innovators of tomorrow are nurtured at prestigious universities and incubators across the nation.
Whether you're establishing a small business or a medium-sized organization, the United States government is committed to helping you operate seamlessly, maximize benefits, and contribute to a flourishing ecosystem of innovation and inspiration.
Another reason for foreigners to start a business in the U.S. is the ease of conducting business. Every business owner desires to operate their company without interruptions from the government and other agencies. In the United States, this concern is significantly minimized.
Supported by a regulatory framework that encourages starting and managing a business, the U.S. business culture fosters free enterprise and competition. Additionally, the United States is renowned for being a stable democracy with a transparent and predictable legal system for businesses.
A skilled workforce is crucial for any business entity. When employees bring experience and creativity to their roles, your company is more likely to stay current in its industry. It's reassuring to know that the U.S. workforce is talented, innovative, mobile, and diverse.
Additionally, American workers are among the most productive in the world. For a better future, the United States has prioritized collaborations with organizations across both the private and public sectors. This enables the workforce to meet the demands of a 21st-century economy.
Money and adequate financial resources are the lifeblood of any business entity. Just as your body needs a smooth flow of blood to remain healthy, a business requires a steady flow of capital to thrive. If you're considering launching a new venture in the US, you can set aside these concerns. The United States boasts the most developed, flexible, liquid, and efficient financial markets globally. Investment funds, venture capitalists, and angel investors are just a few examples of the resources that can provide your business in the US with a substantial advantage.
Now that you have a clear understanding of why entrepreneurs choose the USA, the next step is to learn how to start a business without encountering complex legal issues. Establishing a company as a foreign national can sometimes be a lengthy process, but it shouldn't be a deterrent. The U.S. offers support to make the registration and operation of your business as smooth and comfortable as possible. However, there is one thing you must keep in mind: a good command of the English language is essential.
As a European entrepreneur in the USA, you have two options. You can choose to establish either a Corporation (also known as a "C-Corporation" or "C-Corp") or an LLC (Limited Liability Company).
An LLC is somewhat similar to a VOF in the Netherlands. An LLC has members, and it is common to have more than one member. However, if you wish to be the sole member as an individual or a business, the IRS considers you a sole proprietorship unless you opt to be taxed as a corporation. The most commonly chosen entity is the Inc., which is fairly comparable to a European company, where shares are issued.
Additionally, the benefits for shareholders of companies are generally clear, as they are often eligible for a lower dividend tax rate compared to other options. Furthermore, the parent company doesn't need to pay capital gains tax when selling the U.S. subsidiary, provided that the U.S. company does not primarily own real estate.
After selecting the type of business structure, you need to choose a state where you would like to register your company. Opt for a location that aligns with your company's business goals and plans.
If you are already conducting business in a particular state, or if your customers are located there, it's best to establish your Inc. in that state, as you will have obligations there, such as your office, property, and staff. Put simply, if your business operates entirely in California, a state known for its high costs, there's little benefit in registering your Inc. in Nevada or Delaware, even though these states might offer tax advantages.
If you're dealing with containers, for instance, you would situate yourself in Rotterdam, Hamburg or Antwerp, not Zwolle, Munich or Brussels. Apply that same logic when choosing your business location.
However, if you don't have a specific state preference for your business, many advisors might still recommend setting up in Delaware, followed by Wyoming. This is somewhat outdated advice from the 1980s and 1990s. The rationale was that Delaware once had the most flexible corporate laws, providing generous protection for directors and shareholders, along with foreigner-friendly regulations. However, today, forming an Inc. in states like Florida is often a better option. Many other states have made significant strides in creating a favorable business environment.
Select a location that aligns with your company's business goals and plans.
The next step is to register your business in your chosen U.S. state. Each location has different forms and requirements for establishing a business entity. Below are the steps to register your business in Florida, which serves as a simplified model for many states:
Once your business is registered in a specific state, you'll need to apply for an EIN (Employer Identification Number), also known as a Federal Tax ID, for your company in order to operate as a U.S. business in the United States.
While this number isn't essential for hiring employees, it is necessary for opening a bank account, paying taxes, or obtaining a business license.
As a foreign entrepreneur, you can apply for an EIN: the U.S. Internal Revenue Service (IRS) issues these numbers. We're here to assist you with completing the necessary documents and submitting the application. The number is often granted within a week of application, unless there is a backlog at the IRS, in which case it might take a few weeks.
Now that you have a clearer understanding of starting a business in the United States as a foreign entrepreneur, it's time to develop your plan. Make a decision: choose the business structure that best suits you and find an appropriate location. Then, you can proceed with registering your company. This is where the Van Holland Group plays a crucial role. We assist you in registering and establishing your business without legal complications. From incorporation to guidance in setting up your American business, the Van Holland Group is here for you. Our back office can support you with a wide range of services.
Open a flexible location and expand your business from economically favorable states.
If you are ready to make positive changes.
While it's not exactly the same, an INC is somewhat similar to a BV or GMBH.
We are more than happy to provide a customized quote for your business.
The Van Holland Group supports you with strategic planning, clear goals, and milestones for entering the U.S. market. Discover our straightforward approach. All prices are transparent and listed online. As an entrepreneur, you want to know exactly what to expect from the start
