USA company registration

USA company registration

DOING BUSINESS IN USA

For over a decade, Healy Consultants has efficiently and effectively assisted with business incorporation in the United States for domestic and foreign Clients. Our firm’s experts help our Clients with i) choosing the optimum corporate structure ii) government license registration iii) US corporate banking iv) visa solutions v) staff recruitment and vi) office space rental solutions.

SummaryC-CorpMulti-Member LLCSingle Member LLCFast business solutionFree zone LLCPublic limited companyLLPRepresentative officeBranch officeS-Corp
Best use of company?All purposesTrading/holdingAll purposesClose a deal nowManufacturing and export tradingSecure public fundingProfessional servicesMarketing & researchSpecific projectsFamily Business
How soon can you invoice Clients\sign sales contracts?1 week1 week1 week2 days1 week1 week1 weekNo1 week1 week
How soon can you hire staff?1 week1 week1 week2 days1 week1 week1 week1 week1 week1 week
How soon can you sign a lease agreement?1 week1 week1 week2 days1 week1 week1 week1 week1 week1 week
How long to supply corporate bank account numbers?5 weeks1 month1 month2 days1 month5 weeks1 month1 month1 month5 weeks
How long to supply company registration numbers?1 week1 week1 week2 days1 week1 week1 week1 week1 week1 week
Corporate tax rate on annual net profits?15% - 40%0%0%0%0%15% - 40%0%0%15% - 40%15% - 40%
Limited liability entity?YesYesYesYesYesYesYesNoNoYes
Government grants available?YesNoNoNoNoYesNoNoYesYes
Government approval required for foreign owners?NoNoNoNoNoNoNoNoNoNo
Resident director/manager/ legal representative required?NoNoNoNoNoNoNoYesYesYes
minimum paid up share capital?US$1US$1US$1US$1US$1US$1US$1NoneNoneUS$1
Can bid for Government contracts?YesNoNoNoYesYesNoNoYesYes
Corporate bank account location?IllinoisSingaporeHong KongIllinoisNorth CarolinaNew YorkFlordiaCaliforniaNorth CarolinaNew York
Can secure trade finance?YesYesYesYesYesYesYesNoYesYes
VAT payable on sales to local customers?0% - 7.5%No sales in the USNo sales in the USNo sales in the US0% - 7.5%0% - 7.5%No sales in the USNo sales allowed0% - 7.5%0% - 7.5%
Average total business set up engagement costs?US$6,860US$6,700US$6,700US$11,340US$10,020US$6,860US$6,500US$6,750US$6,750US$6,860
Average total engagement period?6 weeks5 weeks5 weeks3 months1 year6 months5 weeks5 weeks5 weeks6 weeks

See full table

Accounting and tax considerationsC-CorpMulti-Member LLCSingle Member LLCFast business solutionFree zone LLCPublic limited companyLLPRepresentative officeBranch officeS-Corp
Statutory corporate tax payable?15% - 40%0%0%0%0%15% - 40%0%0%15% - 40%15% - 40%
Legally tax exempt if properly structured?NoYesYesYesNoNoYesYesNoNo
Must file an annual company tax return?YesYesNoNoYesYesYesYesYesYes
Shareholders must file an annual personal tax return?YesYesYesYesYesNoYesNoNoYes
Must file annual financial statements?NoNoNoNoNoYesNoYesYesNo
Must appoint an auditor?NoNoNoNoNoYesNoNoNoNo
Access to double taxation treaties?YesNoNoNoYesYesNoNoYesYes
Withholding tax on payments to foreign shareholders?35%0% (if services rendered abroad)0% (if services rendered abroad)0% (if services rendered abroad)35%35%0% (if services rendered abroad)None30%None
Company RegistrationC-CorpMulti-Member LLCSingle Member LLCFast business solutionFree zone LLCPublic limited companyLLPRepresentative officeBranch officeS-Corp
Resident director/manager/ legal representative required?NoNoNoNoNoNoNoYesYesYes
Minimum number of shareholders/partners?1111111Parent companyParent company1
Maximum shareholding for foreigners?100%100%100%100%100%100%100%100%100%0%
Minimum statutory paid up share capital?US$1US$1US$1US$1US$1US$1US$1NoneNoneUS$1
Shelf companies available?YesYesYesYesNoNoNoNoNoYes
Time to incorporate a new entity?1 week1 week1 weekNone1 week1 week1 week1 week1 week1 week
Can easily convert to a PLC?YesYesYesYesYesYesNoNoNoNo
Public registrar including directors and shareholders?YesYesYesYesYesYesYesNoNoYes
Can have preference shareholders?YesYesNoYesYesYesNoNoNoYes
Business ConsiderationsC-CorpMulti-Member LLCSingle Member LLCFast business solutionFree zone LLCPublic limited companyLLPRepresentative officeBranch officeS-Corp
Good entity for trademark registration?YesYesYesYesYesYesYesNoNoYes
Can secure an import and export license?YesNo sales in the USNo sales in the USNo sales in the USYesYesYesNoYesYes

Sponsorship by a local citizen required?No
Our Client needs to travel to US for business set up?No
Temporary physical office solutions available?Yes
You need a local resident as bank signatory?No
Can be wholly foreign owned?Yes
The entity will likely be regulated by?"Secretary of State" in state of incorporation
Security deposit to be kept with Government?No
Minimum number of directors/managers?1
Monthly VAT reporting to the Government?Depends on the State of registration
Must sign an office lease agreement during incorporation?No
shareholders & directors documents to be attested\translated?Yes
Each foreign director needs a personal income tax number?No
Foreign non resident director needs a work permit?No
Maximum number of staff allowed?None
Expatriate to local staff ratio?None
Can secure residence visa for business owner?Yes
Group HQ tax incentives available?No
Other useful information
What will be included in my customer sales invoice?Click here
This country has signed free trade agreements?Yes
This country is a member of WIPO/TRIPS?Yes
This country is a member of the ICSID?Yes
Average custom duties suffered?2%
Government foreign investment approval required?No
Average monthly office rental? (US$ per sq m)US$45
Minimum statutory monthly salary? (federal minimum wage)US$1,257
Average monthly US$ salary for local skilled employees?US$3,700
US$ deposit interest rate? (1 year average)1%
Overseas remittance currency controls?None
Banking considerations
Multi-currency bank accounts available?Yes
Corporate visa debit cards available?Yes
Quality of e-banking platform?Excellent
Crowd funding available in this country?Yes

Tell us what you need - we’ll send you a customised proposal in 5 hours!

Benefits and problems of registering a company in USA

Press the link headings below to read detailed, relevant, up to date information.

  • Benefits and problems

    Benefits of USA company registration

    USA business registration advantages for foreign entrepreneurs

    1. USA company incorporation is very easy because:
      • American LLCs can be incorporated in many states within a day, with only one shareholder and one director of any nationality. Also, no minimum paid up share capital is required and our Clients will not have to travel for company registration;
      • A foreign-owned USA company formation requires minimal licensing and is allowed to purchase property, assets, and securities without any restriction. Consequently, the US ranks 4th globally on the Ease of Doing Business survey conducted by the World Bank.
    2. USA company incorporation allows 100% tax transparency:
      • USA LLCs are by default taxed as partnerships at the federal level, which impute the company’s profits and losses onto the owners’ personal tax returns;
      • Corporations in the US can make an “S-Corp” election under certain circumstances to be tax transparent like a partnership;
      • This tax treatment removes the intermediate layer of tax imposed by most countries’ corporate tax laws, saving our Clients money;
      • The United States boasts 293 free zones that allow for i) 100% duty exemption on re-exports ii) deferral of duties on imports and iii) exemptions from state inventory taxes for exports.
    3. A USA company enjoys multiple tax advantages including:
      • To conduct business throughout the country, foreign entrepreneurs can incorporate a company in one of the lowest taxed states in the Union like Delaware, Texas and Nevada. For example, a company incorporated in Delaware enjoys 100% tax exemption on state taxes if it does not operate within the state;
      • A USA company can be transferred to successors indefinitely without suffering capital tax or estate taxes. This is an efficient way to transfer family assets while avoiding inheritance taxes;
      • A USA business setup has access to 68 double taxation agreements. These materially reduce the withholding taxes of payments to and from the US and allow for preferential access into foreign markets.
    4. The government offers several incentives for a USA business setup including:
      • The Small Business Administration grants subsidized loans up to US $5 million and also guarantees at least 25% of government contracts to companies deemed beneficial for the economy;
      • The government offers grants and tax incentives for virtually every industry, especially those that create jobs or are deemed helpful to the US economy (green energy, education, health, technology, real estate, etc.). On average, more than $500 billion is paid in annual awards;
      • A myriad of corporate tax deductions are available which, on an average, lower the effective corporate tax from 35% to just 15%. In total, there are over US$1 trillion dollars’ worth of deductions granted nationally each year;
      • US bankruptcy laws hold no grudge against past failures. Resident firms can shed pension obligations and limit creditors’ immediate claims by declaring “Chapter 11” bankruptcy. Plus, the management may retain their positions after bankruptcy;
      • American E1 and EB-5 programs allows foreign entrepreneurs investing a minimum of US$500,000 to gain permanent residency status, known as “green cards”. Examples include investments in manufacturing facilities, large businesses employing US citizens, and investments in economically depressed regions (Detroit, Buffalo).
    5. United States is the world’s biggest consumer of products and services because:
      • US consumers spend US$11.9 trillion per annum with per capita income of US $53,750. Plus, with Americans preferring to do business locally, it is critical to establish a presence in the country to connect with 316 million residents;
      • The American shale gas revolution will make the country energy independent by 2025. This trillion dollar industry will significantly reduce the national debt, raise GDP, and create an upwards of million jobs. As a result, the consumer market will be bigger than ever;
      • 78% of the US GDP is generated from the services sector, valued at more than US$13 trillion per annum. Consequently, we encourage our Clients to engage in USA company incorporation to increase global sales;
      • As it emerges from the recent depression, Healy Consultants predicts USA business confidence will peak over the coming 7 years. This will be a great opportunity for our Clients to expand their operations in the US.
    6. The USA is the world’s largest corporate finance market because:
      • US boasts the world’s deepest and most liquid financial markets. Most business loans above US $100,000 are available at 6-7 percent interest rates and are guaranteed up to 85% by the Small Business Administration;
      • The US is also the home to the world’s largest IPO listings, based on flexible exchange regulation and massive investment banks. Consequently, it is advantageous to have a presence in the US to secure public equity.

    Problems with USA company registration

    1. Hiring workers in the US is expensive for young businesses because:
      • The average monthly wage for high-skilled workers is US $6,000, including health care and retirement benefits;
      • There are also strict legal rules regarding hiring and firing of workers. Consequently, countries like China and Mexico have completely replaced the United States as the hub for low-end manufacturing.
    2. Setting up operations across multiple states is complex because:
      • Incorporation is handled at the state level, meaning that your company needs to make new registrations in each state it enters;
      • Setting up operations in a new state requires either the incorporation of a new company, or registering a branch of your “foreign company” in this new state and making filings with each state’s companies registrar (usually the Secretary of State).
    3. Managing taxes for a US company is difficult and time-consuming because:
      • Taxes apply at the federal, state and even municipal levels, requiring knowledge of, and compliance with, a large number of tax regulations;
      • The federal tax code is huge, complex and constantly changing, making it extremely difficult to know how to file for what income and when;
      • Companies with income from multiple states have a higher tax compliance burden due to a requirement to file tax returns in each state from which they derived income;
      • US tax law has a huge number of deductible items, meaning that companies have to spend time planning their expenditure in a tax-efficient way, then reporting that in their tax filings. The need to make use of these deductions is made greater by the high 35% corporate tax rate;
      • There is no participation exemption for income from foreign subsidiaries, meaning that dividends are taxed at 35% when paid to the US parent company (with deductions for tax already paid on that foreign income). Because the 35% rate is high compared to the rest of the world, this can mean an additional 15-20% tax on foreign income for US-headquartered businesses.
    4. A USA company setup can incur losses due to high rate of litigation because:
      • Annually, 15 million civil lawsuits are filed in the United States at a cost of US $251 billion, which is the highest in the world. Italy, the country with the 2nd highest litigation rate, incurs a cost of only US $2.7 billion;
      • Even if our Clients succesfully defend a lawsuit, the legal bills are likely to be high and unrecoverable, as the US legal system does not attribute the costs of litigation to the losing party;
      • Consequently, we encourage our Clients to plan for the cost of liability insurance, potential lawsuits as well as precautionary measures.
    5. There is a high cost of inefficient Congressional laws including:
      • Calculating tariffs and import duties is complicated because almost every product has its own rate, which varies by country of origin. In addition, clearing US customs is also cumbersome given the modern fear of drug trafficking, hazardous materials and terrorism;
      • The federal-state system leads to extremely complex and irregular regulations. There are basically 50 unique jurisdictions within the US, being the states themselves, that can require extremely odd regulations like: blog licensing, raw milk licensing, interior design licensing, license to close business, babysitting, and vending machine licensing.
    6. The US market is highly competitive market for young firms, with new businesses failing at a rate of 50% in the first 5 years. Furthermore, there are several American industries that are impossible to enter as a young startup due to high costs of entry and regulatory barriers. For example, agriculture and large manufacturing industries are dominated by large corporations, as the initial capital required is in billions of dollars.
  • Best uses for a USA company

    1. United States is the world’s 2nd largest manufacturing and distribution hub because:
      • While only 19% of the US GDP is derived from the manufacturing sector, it is still the 2nd largest in the world (valued at US $3 trillion) after China;
      • Energy costs in the United States are low and will continue to get lower. Electricity is 10.3 cents per Kilowatt hour in the US, compared to 30-40 cents in Europe;
      • The US labor is the world’s 3rd most productive in terms of output per hour (US $67). In addition, the workforce has 92% English fluency;
      • The country’s enormous network of roads, railways, airports and ports enable easy and cheap distribution of goods;
      • Hypermarkets littered throughout the US are excellent places to sell and promote our Clients’ goods. Walmart, Best Buy, Target, and K-Mart stores assist our Clients with marketing, logistics, and distribution – acting like a nation-wide trade show;
      • While the US has largely eliminated low-cost manufacturing, it excels in manufacturing sectors such as planes, turbines, computers and robotics. High emphasis on cutting edge technology and economies of scale have made manufacturing more competitive;
      • The US government has signed major free trade agreements with over 20 countries. As an instance – NAFTA allows for tariff free imports and commerce with Canada and Mexico. This provides American firms access to the entire North American market, similar to the EU;
      • The government is also currently negotiating two massive free trade agreements with the EU and Pacific nations. The Trans-Pacific Partnership is being negotiated between the US, Australia, Brunei, Chile, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. These countries would eliminate tariffs, quotas and lower customs regulations for 11% of the world’s population and nearly 40% of global GDP. Meanwhile, talks continue with the EU on the Transatlantic Trade and Investment Partnership.
    2. US is the entrepreneurial hub of the world because:
      • It is a cauldron of startup companies, financial backers and innovative entrepreneurs, which fosters and funds creativity and exchange of skills across industries and cultures. As an instance – there is no better place in the world to set up a tech firm than the Silicon Valley, surrounded by the likes of Google, Facebook, Apple, Intel, and Yahoo and the colleges of Stanford and UC Berkeley. To learn more about what makes Silicon Valley special, read this comparison of Silicon Valley and Singapore for launching a startup;
      • Several major American cities with developed industries cause spillovers in technology, thinking, employees and culture and this will assist a young business. For instance, the following cities are industrial hubs that offer advantages to the businesses clustered within them: Technology – Silicon Valley; Energy – Houston; Automobiles – Detroit; Finance – New York City; Aerospace – Seattle; Entertainment – Los Angeles; Agriculture – Chicago and Midwest.
  • Similar low tax jurisdictions

Contact us

For additional information on our company registration services in USA, please email us at email@healyconsultants.com. Alternatively please contact our in-house country expert, Mr. Paavan Chhabra, directly:
client relationship officer - Paavan
US sec us chamber US dhs US commerce department US irs US sba US aicpa acaus