Businesses in the United States can be registered by citizens, residents and non-residents of the state. To open an enterprise, a foreigner does not need to obtain a passport or residence permit ( green card ), and to find employment in his own organization, it is enough to obtain a work visa.
The American business model is based on equality, competition and mutually beneficial cooperation. According to the Doing Business ranking, the United States ranks 6th in terms of ease of doing business. All organizational business processes in America take place as quickly as possible, online. The United States has a Generalized System of Preferences (GSP), which is aimed at developing international relations in terms of doing business. Under this program, developing countries gain access to the US market and the right to duty-free import of products.
Doing business in the USA: rules for foreigners
Foreign citizens who are legally present in the states have the same rights when registering a company as Americans. Immigrants can open their own enterprise, buy or sell a business. Nonresidents also have the right to manage a U.S. entity from a foreign country through a registered agent, and to purchase stock or serve as a remote director of a firm without obtaining a travel permit. However, to manage an enterprise in the states, a foreigner must obtain a business visa. This document gives the right to official employment in your own organization.
All entrepreneurs who plan to open a business in the United States must meet certain eligibility criteria. Thus, there are internal requirements regarding the conduct of business in an institution, as well as external factors that affect taxation issues and communication with government agencies. Specific state laws govern the payment of fees and reporting. Mandatory requirements for all US entrepreneurs are obtaining a license and health insurance for employees. For each field of activity, a corresponding permit is provided. For example, restaurateurs need a health and safety certificate, alcohol producers/distributors need a sales license, and so on.
Buy an existing business or open an enterprise
A foreigner can open his own business or buy a business in the United States. For aspiring managers, the best option would be to acquire an existing organization. Buying a company in the US can be less expensive than starting an institution from scratch. Among the advantages of a ready-made business is the ability to immediately receive income, without the need to hire staff, equip a premises or office, enter the market, develop external relations, look for clients, etc.
As for the downsides, the new owner may have problems with the incompetence of specialists and staff turnover associated with a change in management. Lack of awareness in the field of activity can lead to reputational and financial losses. In addition, when purchasing a company, it is necessary to take into account the costs of a lawyer and an auditor who will check the business for legality and the presence of tax debts.
The advantages of registering a new company in the USA are the opportunity to choose a management model, develop along the intended vector, hire a team of like-minded people, personally select premises and equipment, and develop your own successful business. Disadvantages – distant prospects for making a profit, the need
How to open a company in the USA: step-by-step instructions
- Definition of the business environment. Each state has its own laws, taxes and business regulations. The choice of location depends on the field of activity, target market and local legislation. For example, if an entrepreneur intends to work with the chemical industry, he needs to find out whether the federal service of the US Department of Health allows this type of activity in the region.
- Selection of organizational and legal structure. Depending on the scope of activity and the scale of the future organization, the entrepreneur chooses a future business model. Entrepreneurship in the USA can be organized individually or in cooperation with partners. Opening of independent public corporations and non-profit charitable companies is also allowed. The business structure determines the specifics of taxation.
- Creation of a trademark and name. The original name distinguishes the brand from competitors and is a tool for its promotion in the market. A business owner in America should come up with a unique trademark and register it with the US Patent and Trademark Office. When developing a website, you also need to create and officially approve a unique domain name.
- Business registration. Opening/relocation of a business, creation of a company branch in the USA takes place in local administrative authorities, at the level of a certain state. You can submit an application online or during a personal visit to a government agency. The entrepreneur must submit a dossier to the relevant authorities, which contains the registration data of the institution and documents relating to its field of activity. The applicant fills out a special form and pays a state fee of 300 USD. The result of this stage is obtaining a certificate of registration of the organization.
- Obtaining an IIN. Employer Identification Name (EIN) is an employer and federal taxpayer identification number that must be obtained immediately after registering a business. The document is required for paying taxes, paying salaries to employees, opening a bank account and other financial transactions. Citizens of the country can obtain the code using the IRS (US Internal Revenue Service) support tool online; foreigners need to send a request by email or in person by visiting the fiscal service.
- Submitting an application for a license. An entrepreneur must obtain a special permit to conduct business from the authorized territorial government agency. For example, the activities of carriers are under the protection of the US Department of Transportation, the Alcohol and Tobacco Tax and Trade Bureau is responsible for issuing licenses for alcohol and tobacco products, and the Federal Communications Commission issues licenses for conducting business in the field of radio and television broadcasting.
- Opening a bank account. Based on the EIN, the entrepreneur opens a corporate account at a local bank. You can contact any American financial institution, providing an EIN, articles of incorporation, and a business license. The bank may also require other documents from the applicant.
- Registration of insurance. The policy is a mandatory document for business owners in the United States. Depending on the field of activity, you can insure product quality, real estate, general liability, or directly the founder of the organization.
All stages of starting a business in the USA are required to enter the market and structure the operation of the enterprise. The support of international law specialists will help you avoid common mistakes and carry out business immigration as soon as possible.
The nuances of registering a company in America
The features of opening a company in the USA largely depend on the field of activity, form of management and the chosen state. Each administrative unit puts forward its own legislative conditions. Basic requirements for all businessmen: compliance with laws and timely fulfillment of tax obligations.
Forms of activity
Organizing a company in the USA begins with choosing a form of management. Foreigners can open the following types of businesses in America:
- Individual entrepreneurship (IP) .
This type of commercial activity is suitable for cosmetologists, legal consultants, and tutors. An individual entrepreneur is not a separate business entity and is the sole property of an individual who bears full responsibility for its obligations. An individual entrepreneur cannot sell company shares or take out a bank loan. However, this type of commercial activity is a good option for testing a business idea before opening a larger organization. - Partnership .
The company is registered with the participation of several entities. In the USA, you can open partnerships (Limited Partnership, LP) and limited liability companies (LLC). In the first case, all participants in the business project bear full financial responsibility for the assets, in the second, everyone risks only their personal investments. The partnership is suitable for activities that require team fulfillment of obligations, for example, for IT institutions, personnel and real estate agencies. This form of government is convenient for organizing medium and small businesses. - Corporation .
It is the most common and reliable form of doing business in America. Corporations operate separately from their shareholders, and therefore co-owners are not personally liable for obligations. However, unlike individual entrepreneurs and LLCs, this type of company provides for double taxation, within which deductions are made for the organization’s profits and dividends for each shareholder separately. Corporation shares can be freely traded on the stock exchange. This type of company is suitable for large businesses with a large number of employees. - Closed joint stock company .
The structure of a closed joint stock company is not much different from a corporation, except that the shares of a company of this type are prohibited from public trading. Closed-end organizations can be managed by a small group of co-founders without a board of directors. This type of activity is suitable for large companies that are created as part of a family business.
Required documents
The dossier required to register a business in the United States depends on the structure of the company. The list of basic documents consists of:
- copies of the founder’s identity card;
- confirmation of the location of the object;
- charter of the enterprise;
- information about the co-owners of the organization;
- taxpayer identification number;
- certificate of availability of a bank account.
Depending on the line of business, the applicant may be asked to provide a business plan, information about the financing of the company’s authorized capital, licenses and other documents.
Cost and timing of opening a company
The duration of the procedure for registering a company in the USA depends on the field of activity, structure and location of the organization. The process of creating your own organization can take from several days to six months. Registration fees are regulated at the state level; average values are shown in the table.
| Registration procedure | Cost, $ |
|---|---|
| Enterprises | from 100 |
| Trademark | 250 |
| Licenses | from 50 |
Business taxes in the USA
To pay taxes in the US, you must log in to the US Treasury website. The payer logs into the system and submits a declaration for the reporting period. Rates are determined at the legislative level of the individual state.
| Tax | Rates as of 2023, % |
|---|---|
| Corporate | 21 |
| Dividends | 15 |
| Royalty | 10 |
| Self-employment | 15.3 |
| Social contributions | 12.4 – social security and 2.9 – health insurance |
Tax benefits for US companies
To support business, the US government offers entrepreneurs tax breaks and loans. Each state develops special programs that can be used by both beginning businessmen and companies that have been operating in the market for many years. For example, New York State has tax preferences for employers who hire workers with disabilities. In Wisconsin, there are financial incentives available to help you grow your livestock business.
Certain preferential tax programs are aimed at supporting entrepreneurs who create new jobs, develop energy-efficient technologies and reconstruct cities. The federal government offers incentives to small businesses that contract with the government and are based in sparsely populated areas.
What kind of business can you open in the United States of America: a review of ideas
To implement a business idea in America, you need not only experience and start-up capital, but also choose a suitable niche for yourself. Immigrants can realize themselves in different areas, the most popular of which are:
- Cleaning. To open a company, it is enough to rent a small space and hire several employees. The most suitable business structure in this area is individual entrepreneurship. The main costs when organizing a business are associated with advertising, the purchase of special cleaning products and equipment. There is no requirement to obtain a professional license for this type of business activity. On average, the cost of opening a company will be from 1000 USD.
- Cosmetics industry. A beauty salon can be opened as an individual entrepreneur or partnership. An entrepreneur has the right to find employment in his own organization and independently provide services to clients or rent premises and hire appropriate personnel. To provide cosmetology and health procedures, a medical license is required. The minimum starting investment in a business is 5000 USD. The main expense items are related to renting premises, purchasing funds and equipment, and marketing.
- Catering industry. Opening a cafe, restaurant or snack bar is the most popular business in America, since many residents of the country are accustomed to eating out. At the initial stage of business development, expenses will be about 30,000 USD. The founder of the company needs to rent premises, equip a kitchen, a living room for guests, hire staff, and conclude contracts with food suppliers. A custom menu design will help you stand out among your competitors and make your business more profitable. To organize this type of commercial activity, you can register a partnership, closed or open joint-stock company. To open a cafe that sells alcohol, you must obtain the appropriate license.
- Transport service. Depending on the scale of the business, an entrepreneur can register an individual entrepreneur or LLC. The main expenses will include not only the purchase of cars, but also the rental of premises, as well as the organization of car service and car wash services. Starting capital can be from 50,000 USD.
- Furniture manufacturing. A businessman can buy a company and work there as a manager, or implement his own business project from scratch. It is advisable to register an organization in the form of an individual entrepreneur or a corporation (for large production volumes). To implement a business project, the owner may need complex certified equipment, machines, and chemical materials. The starting capital for opening a small furniture workshop is at least 10,000 USD.
Business immigration: how to get a green card through company registration
Foreigners who have invested more than USD 800,000 in a targeted employment area/infrastructure project or financed a new business enterprise in an amount of USD 1,050,000 or more can obtain a green card through an EB-5 investor immigrant visa. The firm must benefit the U.S. economy and provide a minimum of 10 jobs for qualified employees.
To obtain the document, the applicant submits a petition (petition I-526) to the US Immigration Department. The application is considered for about two years. The cost of the service is 1140 USD. A green card gives a foreigner the right to reside in the territory of the state, and after 5 years – to apply for citizenship.