Company Registration in the USA
The United States of America is a jurisdiction that introduces an enormous number of opportunities to start and grow a business in the industrial, trade, IT, financial and other sectors of the economy. The jurisdiction consists of 50 states where certain peculiarities of regulation and priorities on economic growth exist. But, in general, the country is associated with these basic advantages foreign investors may enjoy by default after entering it.
Advantages of the Jurisdiction
The decision to open a firm in the USA or buy an existing one is potentially promising in view of the following advantages of the jurisdiction:
- openness to foreign investments as well as creating favorable conditions for non-resident investors to enter it
- qualified labor force
- local economy that is highly developed, including in the trade, finance, IT, machinery, and tourism sectors
- high level of confidentiality and the culture of entrepreneurship
- developed local infrastructure
The list of concrete advantages varies depending on the concrete sector. Prifinance lawyers will be glad to consult you more precisely on the matter of doing business in your concrete case.
Major Forms of Legal and Business Presence
If you are planning to buy a business in the USA or create a new one, it is possible to realize this intent in one of these forms:
- Limited Liability Company – a maximally easy option for creating a new legal entity where the participants do not bear liability in excess of the amount invested. The option is suitable for small enterprises. The participants govern this legal person on their own. The accounting and reporting procedures are maximally easy. Entering the stock exchange and public offerings of shares are not allowed.
- S-Corporation – a form of entrepreneurship suitable for small and medium businesses. The maximum number of participants of this corporation is 100 and their liability shall not exceed the amount of investments into shares. More flexible rules of accounting, reporting, hiring employees, and paying taxes are applied to this type of corporation. Only the income of the shareowners is taxable in this case.
- C-Corporation – an option suitable for a medium and large business that intends to attract investments. The creation of a legal person requires compliance with numerous legal formalities. The corporation is entitled to issue shares of different types. The shareowners don’t bear any liability in excess of the amounts invested in the share purchase. The shares may be freely alienated and offered to third parties. The management system is more complicated where holding a general meeting and the existence of a board of directors. Stricter rules are applied to accounting and reporting. Double taxation exists in this case – both incomes of a corporation and a separate shareholder are taxable.
- General Partnership – an option for doing business according to which the participants act jointly and equally participate in the management of a partnership as well as bear full responsibility for the results of joint activity. Even the personal property of partners may be called in the case of potential losses.
- Limited Partnership – a variation of a partnership where there are (1) one or several partners who bear the entire liability for the outcomes of joint operation and manage such common activity jointly also, and (2) one or several partners whose liability is limited to the amount of funds contributed but who don't participate in managerial activities related to a partnership.
- Limited Liability Partnership – the partners of this formation bear restricted liability for the outcomes of joint operation (within the funds invested exclusively) and their obligations are set forth in a partnership agreement.
- Branch – an option suitable for a non-resident legal person that plans to carry out in the territory of the states the same types of business activities as abroad. Registration is required in this case.
- Representative Office – an option suitable for a non-resident legal person that after registration in the states can conduct the investigation of local markets as well as promote goods/services but without carrying out commercial operations.
Prifinance lawyers will be glad to review each separate case and pick the most appropriate legal and organizational form for it.
Company registration in America requires passing the list of interrelated registration stages:
- Determining commercial priorities for realization through the American legal person.
- Choosing a suitable legal and organizational form.
- Searching for an official legal address.
- Statutory capital formation.
- Composing and formalizing statutory documents.
- Filling registration forms and paying registration fees.
- Forming and submitting the package of registration documents.
- Obtaining certificates confirming the registration.
- Registration for the purposes of paying taxes and hiring employees.
- Opening a corporate bank account.
- Arranging insurance.
- Obtaining extra licenses and permits that are required for carrying out regulated types of activities.
Prifinance lawyers will be glad to review each concrete case in detail as well as develop the required action plan. Lawyers will prepare all required documents, carry out negotiations with local advisors and government authorities as well as support the operation of a legal person further.
Legal and Regulatory Framework
The US legislation is based on common law. There is federal legislation as well as legislation at the level of each concrete state. Carrying out entrepreneurial activity in several states requires taking into account the provisions of the conflict of laws.
The procedure of company registration in the USA is easy and without any excessive bureaucratic formalities. The option of remote registration of legal persons is available also. The most popular states to form or purchase a legal person are Delaware, California, New York, Arizona, South Carolina, Ohio, Nevada, Wyoming, and Florida.
The aspects of regulatory law vary depending on the state. The license will be required for carrying out banking and financial operations as well as other types of regulated activities according to federal and state legislation. Prifinance lawyers will be glad to consult in detail on the matter of the necessity to obtain licenses and approvals for carrying out types of operations that interest you.
Tax System in the USA
After the purchase or company registration in the USA, to such an entity will be applied the respective provisions of local tax legislation that foresee the next tax rates:
- Corporate income tax rates – (1) federal – 21% (2) at the level of states it varies from 1% to 12% (in separate states, corporate income tax is absent at all)
- Personal income tax rate – 37%
- Value-added tax – not applicable
- Withholding tax rates (applied to the income of non-residents) – (1) dividends – 30% (2) interests – 30% (3) royalties – 30%
- Capital gains tax rates – (1) corporate – 21% (2) personal – 20%
Prifinance lawyers will be glad to consult you in detail on the matters of tax accrual and payment, carry out tax calculations of the sums of taxes due and conduct all further arrangements related to submitting tax filings in the USA actually paying taxes.
How Prifinance Lawyers May Help You
Prifinance lawyers consider each separate case individually, analyze its peculiarities, and develop the action plan for the realization of commercial objectives in the USA and abroad. Lawyers will prepare all required documents, handle negotiations with local advisors and state authorities as well as open corporate bank accounts. Lawyers will be also glad to support the further operation of a legal person in the USA and other jurisdictions.
We offer prompt company registration and bank account opening services in the USA and worldwide. New registration and ready-made options. Call the Prifinance Company: ☎ +372-602-65-11: 24/7 customer support.