Start your own US Inc.
What is an Inc? Inc stands for incorporated, meaning the company is a corporation. Perhaps, like dozens of entrepreneurs in Europe every day, you searched in Google for “Setting up an Inc” or “Inc or LLC”. And now, luckily you have now arrived at this page, and your questions will soon be answered. So, how then does incorporation work? And what is best for your situation?
Delaware
Let’s start with an important misconception: unless you’re planning to start the next Google and attract millions of investment dollars, a Delaware Inc won’t be of much use to you. It makes much more sense to think about where your target customers are. In the Netherlands you won’t start a container port in Breda, but it could sense to start one in Rotterdam. What will work best for you? We can explain all this to you in a personal conversation. This page is meant to provide basic, general information and a few general tips on things to consider before setting up your own Inc in the USA.
Inc or LLC?
In Europe you can go to the Chamber of Commerce to register your company as a sole proprietorship. However, if you ask a financial advisor recommend an optimal legal structure for your company, you will probably get a different answer. They will look at your numbers. Which structure is cheaper and what form will increase or decrease your tax burden?
If you ask an experienced entrepreneur the same question about the optimal legal structure, you will almost always end up with the answer “a private company”. Usually the main private company is not a “real” or operating company, that is, a holding company with one or more operating companies is a well-known structure.
A company’s structure often represents a trade-off between tax burden on the one hand and liability or asset protection on the other. Or maybe, for example, you have a patent in one private company and a proprietorship in another.
Claims Culture
It is beyond the scope of this page to fully extend our sole Proprietorship vs firm vs private company discussion to the US scene in one go. For now, suffice it to say that European entrepreneurs who plan to do business in the USA need to build extra layers of protection to sidestep the claims culture.
We’ve all heard about the hot coffee lawsuit or about US companies paying out fortunes in damages. Of course, millions of US business transactions end well every day. However, despite your best efforts, problems may arise. Moreover, the USA has different laws and regulations. Legal fees and damages can quickly add up quickly. An Inc is a frequently chosen solution to avoid personal liability. For example, the shares can be held by a private buffer company in Europe and you must be proactive to avoid litigation, worst case scenarios.
An INC is a corporation, a company that is “incorporated” and meets all legal requirements for the corporation type filed. Universities, healthcare, government, semi government, and municipalities generally work only with US “Incs”.
An LLC is a Limited Liability Company wherein income tax liability from the business flows to the owners while the liability remains with the business.
The Inc is the most common business entity form in the USA. One reason for the popularity is the “corporate shield” or “corporate veil” – under most circumstances – neither shareholders nor board members can be held personally liable for judgments against the company.
Private Company for Export
In the end, it’s all about customized advice, so we won’t go into detail about S Corps or C Corps, LLCs and LLPs. What’s the probability that it will go wrong? Can you transfer some of the risk to, for example, export agents or partners? Are the owners European or American? And what are the pros and cons? In which country/countries do you already pay taxes?
Whether you make a product that’s a part of the food chain, or a part for an aircraft, all considerations give you the best possible advice.
Control
Your choice of business form also has to do with your product or service, and how you plan to approach the market. Think of the distribution channels in your specific industry or sector.
Business Help
Of course you also need a US accountant. Which taxes are applicable and what are the federal, state, and local tax rates? What local permits do you need? The Van Holland Group helps you with all these questions – everything you need to start your own Inc including tax returns and everything in between and beyond.
Your personal agents in the USA
All Van Holland Group relations and clients who own an Inc automatically become members of our “Advisory Council Network ” – a team of lawyers, accountants, and other entrepreneurs who have already taken the steps to do business in the USA. This helps ensure that we can always advise and assist you and, if necessary, put you in contact with the right people.
Most common mistake
“Let’s just get started!” Entrepreneurs are known for charging full-speed ahead without protecting their assets. Typical scenario: the order has been received, the contract between the US buyer and the EU seller has been signed and before you know it those first dollars hit your European bank account. But yes, sadly, something goes wrong in the after-delivery, and before you know it you have an American Lawyer after you. At that point, applying asset protection strategies is too little, too late…
Pricing Overview
We work completely transparently with All-In rates.
We publish all prices online. That way, you always know exactly where you stand!
What is the best solution for you?
We are here to help.
- Please contact us by phone 239 268 7083
- Or email to: info@vanhollandgroup.com
