Start your own USA Inc.
What is an Inc? Inc. stands for Incorporated. Every day, dozens of entrepreneurs in Europe search in Google for “Setting up an Inc.” or “Inc or LLC”. And luckily you have now found this page. So how does that work, such an incorporation? And what is best for your situation?
Let’s start with an important misconception: unless you’re planning to start the next Google and attract millions of dollars of investment, a Delaware Inc isn’t of much use. It makes much more sense to think about where your customers are. In the Netherlands you will not start a container port in Breda, but it makes more sense to start in Rotterdam. What works best for you? We can explain this to you in a personal conversation. This page is informative and provides some general tips that you should consider before setting up your own Inc. in the USA.
Inc. or LLC?
In Europe you would go to the Chamber of Commerce to register your company as a sole proprietor. Asking a financial advisor what would be the best legal structure for your company, you would probably get a different answer. They will look at your numbers. What structure is cheaper and with what form do you pay more or fewer taxes.
If you would ask the same question to an experienced entrepreneur, you will almost always end up with “a Private Company”. And usually one Private Company is not a real company, so a Holding Company with one or more operating companies is a well-known structure.
The structure of a company often has to do with the trade-off between tax structures on the one hand and liability on the other. Or maybe you have a patent in one Private Company and a propriety in another Private Company.
It is going too far to extend the Sole Proprietorship-Firm-Private Company comparison to America in one go, but often European entrepreneurs who are going to do business in the USA want to build in an extra layer because of the claim culture.
We all know the stories of the cat in the microwave and the millions in damages. Of course, there are millions of business transactions that end well. But you never know, America has different laws and regulations. And damages can quickly add up in the USA. Often, therefore, a frequently chosen solution is an Inc. The shares are held by a buffer Private Company in Europe and that way you can say goodbye to your VS Private Company in the worst case.
INC. A company that is “Incorporated” and meets all legal requirements. Universities, healthcare, (semi-)government and municipalities always only work together with “Inc’s” located in the USA.
LLC. Limited Liability Company where the income tax from the business goes to the owners but where the liability remains in the business.
The Inc. is the most commonly used business form in the United States. One of the reasons for the popularity of this form of business is that neither the shareholders nor the board members are personally liable for the company.
Private Company for Export
In the end, it’s all about custom advice so on this page we’re not going into detail about S of C corp, LLC and LLP. What is the probability that it will go wrong? Can you transfer a part of it to, for example, export agents or partners? Are the owners European or American? And what are the pros and cons? In which country do you already pay taxes?
Do you make a product that is part of the food chain, or is it a part for an aircraft? All considerations that experienced export lawyers can analyze for you in order to arrive at the best possible advice.
Your choice for a specific business form also has to do with your product or service. And the way you want to approach the market. Think of distribution channels in your specific industry or sector.
Of course you also need an accountant in America. Which and how much tax do you have to pay to the IRS? And what local permits are needed? The Van Holland Group helps you with all these questions. To start your own Inc. up to and including annual tax returns and everything in between and beyond.
Your personal agents in the USA
All relations and customers of the Van Holland Group with their own Inc. automatically become a member of the “Advisory Council Network “. A team of lawyers, lawyers, accountants and other entrepreneurs who have already taken the step to the USA. That way we can always advise and assist you and, if necessary, put you in contact with the right people.
Most common mistake
We’re just going to get started! Typical entrepreneur behavior: the order has been received, the contract between the USA buyer and the EU Seller Company has been made and before you know it the first dollars are in your European bank account. But yes, then it turns out that something is wrong after the delivery. And before you know it you have an USA Lawyer after you. Then it is no longer useful to apply Asset Protection…