If your dream of opening a company offshore became true today, where would be your preferred destination? We will tell you of one jurisdiction that will never disappoint—the United States. All about company formation in USA non residents just below.
The country has all that an entrepreneur would want to see, a large population, well-developed infrastructure, and a level playing ground for businesses.
For investors who have already expanded their offshore business to the US, it is like a big door flushing open and ushering them into a land of endless opportunities. So, if you also want to expand there, here is all that you need to know about company formation in USA for non residents.
The US Economic Outlook
The economy of the US is the largest in the globe by nominal GDP and net worth. According to the 2021 estimates, GDP of the US was $22.785 trillion.
The country has the most technologically powerful economy on the globe, and most companies operating there are at the forefront in tech advances, especially in pharmaceuticals, computers, aerospace, military hardware, and artificial intelligence.
Anything you think of about business in the US is ahead of others, and registering a company there will catapult it ahead of competitors on the globe.
From there, growth into a multinational will be pretty easy. Here are other important information about the US economy that you should know when considering company formation in USA non residents.
- US GDP per capita according to the 2021 estimates is $68,310.
- The largest contributor to the GDP growth is the services sector (80.2%), followed by industry (18.9%) and agriculture (0.9%).
- The country’s economy is fueled by the abundance of natural resources, high productivity, and a world-class infrastructure. In 2015, US natural resources were estimated at $45 trillion.
- Among all the OECD countries, the US has the highest average employee and household income.
- In 2020, the country’s exports was $2.127 trillion, with manufacturing accounting for 74.8% of all exports, while agricultural related products accounted for 10.7%.
- In the same year, 2020, the US imported products worth $2.808 trillion, with manufacturing products accounting for 78% while agriculture accounted for 10.5%.
From the economic outlook of the United States, one thing is pretty clear, the potential of the jurisdiction is very high. Whether you want to target exporting products from the US and importing others, the market is ready for you to conquer. So, it might be the perfect time to get started with company formation in USA.
Why does the US Stand Out as a Unique Place for Offshore Business?
The primary reason more investors target expanding their companies to the US is because of the country’s strong focus on democracy.
This means that whether you are offering new mobile apps or hospitality-related products, among others, the targeted clients will decide to buy based on quality. Simply put–if you get superior quality products, the market will be there for you. Other reasons more people take their companies to the US include:
US company formation for non residents
Think of a business opportunity and the chances are that it is available in the United States. Whether you would like to invest in the tourism, rain gutters, manufacturing or pharmaceuticals, there is something for all. The country’s more than 300 million people will provide the market that you need to sustain high profits after company formation in USA non residents. So, are you ready to cover this new market?
You Get a lot of Incentives from the Federal and Local Governments
The US appreciates that to keep employment opportunities at the peak for its citizens and maintain an edge in economic growth over others, businesses must be supported to thrive.
This is why many states provide financial incentives to foreign investors willing to invest in their locales. For example, some states offer tax credits while others might come in to help with research and development. This means you can get the company off the ground fast and start making the projected profits fast.
Better Access to New Markets
When you look at the US, perhaps the most notable market is that of the local population which is over 300 million, it has a lot more to offer.
US has signed many bilateral agreements with different countries to help increase the reach of local companies.
For example, you will be able to easily access new markets, such as Canada, the EU and most of the Asian countries. This is the leverage that you need to rapidly grow your company into a global brand.
Stable Political Environment
For your business to be successful, it is important to think long term, and this is only possible when working in a country which is politically, economically, and socially stable.
This is where the US stands taller than its peers. According to Ernest and Young, a lot of tech and financial firms have been heading to the US to take advantage of this stability. With a stable economy, it becomes easy to plan your business and map it on a road to success.
Excellent Property Rights Protection
Today, the US is known all over the globe as a country that fiercely protects intellectual property rights of its brands. Every year, the country’s patent office receives over one million applications for trademark protection.
This means that once you work on a new invention, it is fully protected and you have the opportunity to monetize it through partnerships and even licenses. All about US company formation for non residents.
Company formation in USA non residents : When to Consider Expanding Your Company to the US?
For some people, the idea of company formation in USA non residents is good, but making the decision about it is a major dilemma. The common signal that should tell you it is time to go offshore is poor performance back home. If your company is rarely meeting its targets, it might be a good idea to think of new markets. This might be the alternative route the business requires to restore its profitable ways. Other signs to consider include:
- When your company is posting very good results: This is an indication that you need new challenges for the business. You do not need to close the home business to open a new one in the US. Consider running both of them for higher profits.
- Stiff competition in the local market: Entry of competitors means that your market share is likely to shrink. Therefore, as you develop strategies for addressing new competition, offshore expansion to the US might be a great idea.
- New punitive policies. If your business is located in a country where there are so many punitive laws, there is no need to try and excel there. It will not work. Instead, you should look for new locations in the US and your enterprise will grow rapidly.
- Desire to become a multinational. If you have been thinking of making your company a global brand, it will be a good idea to incorporate it in a jurisdiction that provides the global exposure and faster growth. One of the top options is the US and you should not hesitate to initiate the process of company formation in USA non residents.
These are only a few of the reasons why you should consider opening a company in the US. Others might be to increase profitability, building partnerships with international brands, and taking advantage of the highly advanced technology in the US to lever growth.
How to open a company in USA non resident?
Now that you understand the economic outlook of the United States, we will now highlight the main steps involved in registering your business there:
Step One: Select the Preferred State
The US is a combination of different states, and some of them have varying state taxes for companies that operate there. So, it will be a good idea to try and identify a state without state taxes so that your enterprise will only handle US Federal Taxes.
As you select the state, it is also important to determine whether the enterprise will have a physical office in the country, employees, and job site.
If you will need all these physical attributes, a limited liability company (LLC) will be the best option.
If your company will not have physical needs, a state without state taxes will be a good option. Good examples include, Wyoming, which has very foreigner-friendly laws, annual fees, and no capital gains taxes. Other equally excellent states are Delaware and Nevada.
Step Two: Name Your Company
The second step in company formation in USA is selecting the preferred company name. Note that each state has varying rules about company names. Here are some general requirements when selecting a name for your new company in the US.
- The name must include the term/phrase limited liability company or abbreviation LLC or L.L.C.
- (II)The name you select cannot include words or initials that can make people confuse it with an agency of government.
- (III)If you want to use words such as bank, university, doctor or attorney, additional paper work and permits might be required.
Step Three: File Your LLC Document
At this point, you need to get the LLC document (articles of association) for company registration and file them with the respective state’s office for company registration. This document outlines the rules of company operations. For example, is the company manager-managed or member-managed?
Step Four: Develop an Operating Agreement
Although an operating agreement is not a requirement in many states during company formation in USA non residents, it is a good practice to prepare one.
This is a legal document that outlines the procedures and ownership of an LLC. It helps to ensure that all shareholders of a company are reading from the same script to reduce the risk of conflict in the future.
Step Five: Get an Employer Identification Number (EIN).
EIN is the tax ID for your company in the US. Note that An Individual Tax Identification Number (ITIN) or Social Security Number (SSN) is not required for you to get an EIN. For non-resident entrepreneurs, you can make application for EIN through fax or mail.
If you opt to use Fax, simply fill, sign, and fax Form SS-4 application for Employee Identification Number. For those who prefer to use mail, you need to get Form SS-4 and then send to IRS (Inland Revenue Service) email. It will take about five weeks for the number to be processed. Remember that the attn. and IRS address designations will depend on the state of focus.
Step Six: Get a Physical Mailing Address
Now that you have already selected the preferred state, you will require a physical mailing address. This is very important because it is required when opening a bank account.
One way of doing this is getting a physical office in the selected state where your business will operate from after company formation in USA. Even for a company that does not need a physical office, a mailing address will still be required.
Step Seven: Open a Bank Account
For your company to start operating, get paid and make payments, you need to have a bank account. This should be the last step in your company formation in USA. Indeed, you can do it after forming LLC and getting EIN. Note that unlike other steps, from step one to five, you will need to make a trip to the US to open a bank account.
The steps we have outlined above can be complex and it is not uncommon to find some people who thought of company formation in USA non residents opting out.
The good thing is that there is a simpler and more straightforward way of doing it – using the services of an agency of experts. These are professionals who specialize in company formation and will help you to complete it fast and at an affordable cost. One of the globally accredited agencies is ICD Fiduciaries.