Business presence in the US means growth in the world’s largest economy.
The United States is a beacon for entrepreneurs worldwide, offering a dynamic economy, diverse markets, and a robust support system for businesses. In 2023, entrepreneurs filed a whopping 5.5 million new business applications—a notable increase from 5.1 million in 2022. This trend highlights just how business-friendly the US is for entrepreneurs.
Although expanding into the US is lucrative, understanding the business landscape and the registration process is key. This article explores why the US is an attractive business destination and how you can seamlessly establish your company here.
The business benefits of registering your company in the United States
The US presents multiple advantages for businesses looking to establish a presence in a stable and growth-oriented environment.
Here are some key benefits:
- Access to a large consumer market: With a population exceeding 340 million, the US provides businesses with a vast and diverse customer base.
- Robust legal framework: The US legal system offers strong protection for intellectual property and effectively enforces contracts, ensuring a secure business environment.
- Advanced infrastructure: Businesses benefit from world-class infrastructure, including transportation networks, telecommunications, and utilities.
- Skilled workforce: The US boasts a highly educated and skilled labor force catering to various industries.
- Innovation hub: As a leader in technological advancements, the US provides an ecosystem that fosters innovation and research.
Given these advantages, businesses have two primary ways to establish themselves in the US—direct company registration or partnering with an Employer of Record (EOR). Let’s explore the differences.
What is the difference between standard company registration and expanding through an EOR?
The strategic benefits of establishing a legal entity and using an EOR vary based on business goals, budgets, flexibility, and risks.
Here’s how each approach aligns with different expansion needs:
Aspect | Company Registration | Employer of Record (EOR) |
Purpose | Establish a legal entity for long-term operations | Test new markets or manage remote teams without establishing a legal entity |
Control | Full control over operations | Limited control; EOR handles HR and administrative functions |
Cost | High initial investment (registration, legal fees, etc.) | Predictable, bundled service fee |
Compliance | Full responsibility for legal and tax compliance | EOR ensures compliance with US laws and regulations |
Setup Time | Several weeks to months | A few days to weeks |
Scalability | Complex and time-consuming | Quick and flexible workforce adjustments |
While traditional company registration allows full autonomy, partnering with an EOR significantly reduces administrative burdens, compliance risks, and time investment.
How an EOR simplifies US company registration
Establishing a company in the United States requires adherence to a complex framework of federal, state, and local regulations. Partnering with an Employer of Record (EOR) is a strategic alternative.
Here’s how an EOR helps:
- Rapid market entry: Bypassing the lengthy registration process, businesses can commence operations within days.
- Compliance management: EORs ensure compliance with federal and state labor laws, manage payroll taxes, and oversee contract regulations.
- Cost efficiency: Avoid entity formation, legal documentation, and administrative setup expenses.
- Streamlined payroll: Manage salaries, benefits, and global tax filings through a unified platform.
- Focus on core business: The EOR manages administrative tasks so your business can concentrate on strategic growth.
Certain industries—such as finance, healthcare, and government contracting—have regulatory requirements that mandate a formal legal presence. Additionally, company registration is essential if you plan on opening physical offices, obtaining business licenses, holding inventory, or directly engaging in sales and contracts with US customers. In the next section, we unpack how the registration process works.
A step-by-step guide to registering a company in the United States
Businesses opting for direct registration must complete the following steps:
Step 1: Choose a business structure
Selecting the appropriate business structure impacts your liability, taxation, and operational flexibility. Options include:
- Sole proprietorship: Owned by one individual; simple setup but with unlimited personal liability.
- Partnership: Owned by two or more individuals; shared responsibilities and profits.
- Limited liability company (LLC): Offers liability protection with flexible tax options.
- Corporation: A separate legal entity; provides liability protection but involves more regulations.
Step 2: Select and register your business name
Ensure your business name complies with state regulations:
- Name availability: Check with your state’s business filing office to confirm the name isn’t already in use.
- Trademark considerations: Search the US Patent and Trademark Office to avoid infringement.
- Domain name: Secure a matching domain for your online presence.
Trademarking your business name is not mandatory but can offer legal protection. When filing with the USPTO, costs typically begin around $225 to $400 per class of goods or services, plus attorney fees if you seek expert assistance. You can find more guidance on the US Chamber of Commerce website.
Step 3: Register with federal and state authorities
Depending on your business structure, registration requirements may vary:
- Federal registration: Most businesses don’t need to register federally unless they seek trademark protection or tax-exempt status.
- State registration: Register with the appropriate state agency, typically the Secretary of State’s office.
As a registered company in the US, you must follow both federal and state laws for labor, tax, and payroll laws to prevent hefty fines or legal action. For instance, certain states require businesses to publish a legal notice of their formation in a local newspaper.
Step 4: Obtain an employer identification number (EIN)
An EIN is essential for tax filing and hiring employees in the United States. You can apply online through the IRS website.
Step 5: Obtain the necessary licenses and permits
Some industries require additional permits:
- Local business licenses: Issued by city or county authorities.
- Industry-specific permits: Required for businesses in healthcare, construction, food service, and more.
While the US offers a business-friendly environment with access to one of the largest consumer markets in the world, setting up a company here means complying with federal, state, and local regulations. This can be difficult, but non-compliance can mean hefty penalties and legal repercussions.
Your company may need dedicated teams to manage its US workforce. It’s also advisable to hire tax and legal consultants to avoid non-compliance. Of course, this could add to your costs and impact your growth—it’s why many companies choose an EOR to hire and grow their teams in the US instead.
An EOR makes global hiring simple and cost-effective. Before exploring how, let’s break down the costs of United States company registration.
The real cost of registering a business in the United States
Registering a company in the US involves various costs, and businesses must consider these expenses when planning their expansion. Below is an overview of typical costs associated with company registration in the US:
- Business name registration fee: $50–$150 (varies by state)
- State registration fee: $50–$800 (depending on the state)
- Notary and legal services: $500–$2,000
- Bank account setup: Free to $100
- Accounting and annual compliance: $300–$1,200 annually
Cost savings with an EOR
EORs bundle these expenses into a predictable fee, eliminating entity setup requirements and simplifying budgeting. Below is a cost comparison between traditional company registration and using an EOR in the US
Cost comparison: Standard registration vs. EOR
Cost category | Company registration (USD) | EOR with Multiplier (USD) |
Setup fees | $1,000–$3,000 | $0 (covered by EOR) |
Legal documentation | $500–$2,000 | Included |
Payroll and compliance | $300–$500/month | Included |
Ongoing maintenance | $1,000/year | Included |
Time investment | 3–6 months | 2–4 weeks |
While company registration in the US involves substantial upfront costs and administrative complexity, an EOR offers streamlined services with transparent, recurring fees, making market entry faster and more efficient.
Note: The cost comparison above is a general overview of the expenses. Actual expenses often vary based on your country of operation and industry. Talk to our team for a clear comparison of costs tailored to your business needs.
Take the stress out of your US expansion with Multiplier
Expanding into the US can be seamless with Multiplier. Our EOR solutions offer a compliant, cost-efficient, and stress-free market entry strategy.
Why choose Multiplier?
- Local hiring expertise: Easily onboard US-based talent on employment contracts.
- Effortless payroll management: Ensure accurate, timely salary payments.
- Comprehensive HR solutions: Manage time-off, compliance, and expenses with ease.
- Regulatory compliance assurance: Navigate US labor laws with expert guidance.
- Attractive benefits packages: Offer competitive benefits to secure top talent.
Registering a company in the US can be costly and time-consuming. With Multiplier, you reduce risks and costs. It accelerates your market entry and helps you fully explore growth opportunities before making long-term commitments.
Book a demo today and discover how Multiplier’s EOR services can accelerate your success in the US.
