Business Opportunities in the US
Unites States is undoubtedly one of the largest economies in the world. It has sustained stable GDP growth, a low unemployment rate, and high levels of capital investment for a long time. Owing to these factors, it is one of the most pro-business destinations in the world.
The US consistently occupies the top spot for its overall competitiveness and ease of doing business. The country’s fair and legal financial system enables national and international entities to promote business growth. Moreover, the legal procedures for authorizing and enlisting the business are efficient, straightforward, and inexpensive.
Here are business opportunities in the US that have flourished over the years and those that faced a severe drop down during the pandemic.
Benefits of Starting a Business in the US
If you are considering setting up your company or starting a business in the US, below are a few reasons why you made the right choice.
- The US has a favorable economic environment that promotes free enterprise.
- An open investment policy allows foreign investors to grow on a uniform playing ground.
- Tax benefits offered by federal, state, and local governments are conducive to business growth.
- Stable political environment and continual technological advancements to boost business performance.
- Availability of skilled workforce across all sectors.
State and local governments in the US offer several incentive programs like grants, tax benefits, and job training subsidies to create job and business opportunities. The federal government also provides clean energy production tax credits and export credits insurances, particularly for small businesses.
Requirements for Starting a Business in the US
You must meet several requirements to start a business in the US, including –
You need a work pass if you want to set up your business in the US legally. If you are unable to relocate to the US for some reason, you must appoint a director who is a US citizen.
You must decide the company’s name that will be incorporated and registered under federal law. Without a name, you cannot start a new business in the US.
Before you get your business registered, you must choose the base location of your company. You must add a local business address having a physical existence. This address will be the point for all your business needs and communication.
You must define a capital structure for your company. Whether you will fund all operations or several partners will run the company together should be clear before starting business operations. You can raise funds from the public, but you must disclose that.
Directors and company secretary:
Before registering and incorporating your company, you must appoint a board of directors to run the company.
General compliance requirements
There are several compliance requirements that you must adhere to if you are starting a new business:
Tax Filing Requirements:
As a rule, you must file an annual income tax return and pay your taxes in due time.
Employment and Labour Law:
There are various compliances set according to the labor law of the US. You must adhere to the standards set for wages and overtime pay. Also, it is necessary to provide a workplace that is free of any serious hazards. If you have a minimum of 15 employees, you must comply with the equal opportunity law. This mandates you to recruit people from different genders, races, religions, ages, cultures, etc.
You are not supposed to conspire against your competitors by fixing market prices or by conspiring to boycott. You cannot indulge in price discrimination and monopolization as these are all against the anti-trust laws.
You must ensure that the claims in your ads are not false or deceptive on purpose. Including testimonials in your advertising is subject to additional rules. Violations of these laws might result in fines, which negates the original objective of your advertisement.
Types of Business Structures in the US
Before setting up a company in the US, it is essential to learn about the types of business entities and which one will suit your business type the most.
Below mentioned are different types of business structures prevailing in the US:
Key considerations for choosing the legal structures
- Continuity of Existence
- Investment Needs
- Complex Procedures
Company Registration Process
Here is a stepwise account of the company registration process in the US:
Decide on a business structure
The primary step is to choose a company structure. The business structure (also known as a business entity) you choose impacts how you file taxes and run your firm and the risks your assets will face if your company fails.
Some business structures are listed below:
- Sole Proprietorship: This is how a company is set up by default. Your business will be considered a sole proprietorship if you choose to run your firm without a particular business structure. There is no differentiation between business and personal assets in a sole proprietorship.
- Partnership: This type of business structure is used when two or more persons own a company. For instance, in a limited partnership (LP), one member (the general partner) is usually personally liable, while the other partners (the limited partners) are only liable to a certain extent. Contrarily, limited liability partnerships (LLPs) shield all partners from a company’s debt.
- Limited Liability Corporation or an LLC: This corporate structure protects the owner’s personal assets from the company’s obligations. The revenues and losses are generally taxed as the profit or loss of the members.
- C-Corp: This structure establishes your company as a separate legal entity from its owners (the shareholders). That means the company can be taxed, profited from, and held legally liable for its conduct independently of the shareholders. Consequently, this structure provides the greatest protection for an owner’s assets.
Choose your business location
After you’ve decided on the ideal business structure for you, you must determine a location for operating your business. That doesn’t imply you must only have a physical location for your company. When it comes to establishing your business, it refers to the address you use for tax filings, getting vital paperwork from government organizations, or opening a corporate bank account for your company.
Business name registration in the US
The next step is to register your name. Forming different entities such as LLCs and corporations includes business name registration in the US. However, if you’re launching a sole proprietorship or partnership under a name other than your own, you might need to register a DBA (doing business as) name.
Existing LLCs and corporations can also use a DBA to register new firms under their umbrella. For example, you would file a DBA if you run an advertising company and are interested in opening another under a different name. It preserves the first and second companies as separate legal entities under two different names.
Register with the IRS
Every business owner must register their company with the IRS to obtain an Employer Identification Number (EIN). Your EIN functions similarly to a Social Security number for your business and is required for tax filing. You can sign up for one online by going to this link. Again, there are some situations when you may not require one.
Register with local and state agencies
After completing all of your federal registrations, you’ll most likely need to register your business with one or more state or local government entities, such as revenue offices.
Apply for permits and licenses
Finally, double-check that you have all the necessary licenses and permits to begin serving consumers. Each industry may have its own set of specifications. Thankfully, the US Small Business Administration has made it simple to find the permissions and licenses you require by inputting your location and business type.
Timeline for company registration in the US
The process of company registration in the US for a new business might take anywhere from a few hours to several days. When dealing with a company secretary, the time limit is mainly determined by how soon each shareholder and director can provide the company secretary with personal documents for verification, such as proof of identification and address.
How Much Does it Cost to Incorporate a Company in the US?
You must pay several costs for incorporating your business. You must pay four different charges – a fee for filing all the documents for company incorporation in the US, franchise tax, the fee for government filings, and attorney fees.
- Depending on the state in which the business is incorporated, the secretary of state offices often charges $100 to $250 in administrative and filing fees.
- A franchise tax is a fee paid to the state for the right of doing business as a corporation there. This cost is generally between $800 and $1,000. The franchise tax is an essential part of the cost of incorporating the company in the US.
- Corporations must pay government filing fees ranging from $50 to $200. This is in addition to the Secretary of State’s filing fees. The fee for government filings depends primarily on the established business structure and the state where the business is incorporated.
- Many law firms charge a flat cost for forming a business, often between $500 and $700, while other attorneys’ fees might reach $5,000. This involves assisting with the completion of needed documentation and collaborating with shareholders. Thus, the more stockholders your business has, the higher the attorney’s fees will be.
Are Foreigners in the US on Certain Passes Allowed to Start a Business in the US?
Yes, foreigners are allowed to start businesses in the United States. However, they must get appropriate visas and permits and complete the necessary paperwork to start a business in the United States.
You don’t need a green card to form a business or buy a corporation or limited liability company (LLC) based in the United States. The procedure of launching a business as a foreign citizen in the United States is similar to the process that American citizens must go through. Foreign citizens are not subject to any restrictions.
Government Assistance for Foreign-owned Businesses
Depending on their line of work (industry) company location, foreign-owned enterprises receive adequate support and aid from the US government when establishing their business and operations in the US.
Foreign businesses may also receive grants from the US government to help them start or grow their operations. They provide appropriate financial incentives and services to assist in recruiting and training talented workers. However, you will have to apply for these grants and fulfill the requirements.
How Can Multiplier Help?
You now understand the elements that determine the cost of creating a business in the United States. Please keep in mind that the prices above are only averages from the industry. This is just a rough picture of setting up a company in the US. The overall process can get tricky if you aren’t aware of the local, state, and federal laws.
This is where a global PEO firm can help break the ice. Working with a reputed global service provider might assist you in launching your company smoothly.
With Multiplier, you can quickly onboard and pay full-time employees while staying inside the confines of local labor rules. You won’t have to bother forming a local entity or figuring out how to keep changing labor laws in your area. To learn more, speak with one of our experts.