The US market has always been a favorite of companies around the world. Thanks to the simplicity and low cost required to Start Your Business Setup in USA from India, as well as the numerous tax breaks, more and more Indian companies and startups decide to make this investment.
To open a company in the United States of America, however, you must be prepared from every point of view.
Which type of company to open, which country is best suited to your business, how to open a bank account, how to interface with local investors, how to offer the product to people with a mentality completely different from the Indian one, how taxes work, and much other.
The amount of information you need to get hold of before opening a company or branch in the USA shouldn't scare you. Fortunately there are also consultants and Indian companies specializing in India-USA import-export that can give a big hand to established companies and startups, from the beginning to the end of the process of setting up on the American market.
For our part, with the contribution of a company specialized in helping Indian companies and startups to do business in the USA, the Export America Group, we will try to give some important information on these aspects, to give a first smattering to the entrepreneur Indian who wants to start doing business in the United States by opening a company or starting a startup.
Open a company in the USA
Here are the main factors to evaluate before starting a startup and opening a company in the USA:
1. Choice of corporate form;
2. Company incorporation status;
3. Open a bank account in the USA;
4. How to interface with American investors;
Choice of the corporate form in the USA
The United States allows you to open companies with different corporate forms. Each of these has specific characteristics that can adapt or not to the type of business you want to do.
Among the main corporate forms we find:
1. Corporation (Inc or Corp), comparable to our SPAs
2. LLC (Limited Liability Company
3. Limited Partnership is a company made up of at least two people
4. Sole Proprietorship, a company that belongs to a single owner
Usually, startups and companies tend to choose one of the top two American corporate forms. But while the former is more suitable for large companies listed on the stock exchange or that plan to do so in the short term, the latter is preferable for small companies and startups for a variety of reasons. One of these is the benefit for members of not having to respond with their private capital in case things went wrong.
Corporation type companies
The oldest corporate form ever existed in the United States. The opening procedures are very simple. Basically the registration of the company (better to say the incorporation) is done by submitting to the local authorities an "article of organization". Its capital is represented by shares.
LLC type companies
It is a company form of more recent origins and designed to encourage the influx of foreign investors into the US market. So the conditions are very advantageous. The type of taxation is defined as "pass-through-out", meaning that they are not subject to double taxation of profits and, at the same time, shareholders have limited liability. Private capital is protected and only the capital physically invested in society is at risk.
Another advantage is that the foreign entrepreneur who opens this type of company is not obliged to take up residence in the USA.
In which country to open a new company
It must be said that in the US, an LLC must pay a small tax to open the company to the state in which the seat is elected. If the same company also does business in other states, it must be registered in each of them.
The cost of opening a company in the US is about $ 100 on average and you can get it open in 24, maximum 48 hours.
The choice of the state of incorporation, regardless of fiscal convenience, should also be assessed on the basis of costs and type of business. For many types of business, it would be counterproductive to open a company in New York if you want to do business in California for example.
That said, there are US states where opening a company is cheaper, both for tax reasons and for the protection they offer companies in many ways. Let's take a couple of examples.
Delaware
One of the best states to open in America is Delaware, especially for large corporations. Delaware offers modern and efficient tax flexibility, such as to encourage entrepreneurship in all its aspects. To this must be added the tendency to simplify and streamline the entire business process. Lastly, the state of Delaware protects the privacy of the company, its members and its directors.
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North Carolina
North Carolina is also an excellent state for establishing a new company. He was elected as the second best American state to do business. The income tax of companies residing in this state is among the lowest in the world and the lowest in the entire USA: just 3%.
North Carolina's native and foreign attitude towards entrepreneurship is extremely friendly and encouraging. Finally, the low cost of living makes it ideal for startups.
Open a bank account in the USA
Opening a company in the United States therefore leads to the need to open a bank account in a local institution. This, in addition to serving to be able to physically open the new company, is indispensable for obtaining financing for companies.
The corporate bank account should be separate from the personal bank account (mandatory for corporations). In addition, the account opening is necessary, because through the traceability of the movement of money, it can be shown that the company or the startup is a real business. In fact, if after a certain period of time the company does not produce significant profits, the business is demoted to the rank of "hobby" and loses the opportunity to take advantage of various loans and concessions. Well ... if you open a company in the USA, the Americans themselves want it to be productive and profitable.
How to interface with American entrepreneurs
If you want to open a company in the United States, you have to consider dealing with American investors who are eager to do business. On the contrary… proposing these people to do business with you must be one of the objectives to be set.
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It must be known, however, that the American has a different philosophy from ours and it is necessary to approach it correctly in order to avoid losing the deal. Here are some tips.
Never propose to an American investor something that will be done in the future (we will do ....). We need to offer them what is ready to make money. If the investor is interested, he wants to start immediately. Otherwise it will liquidate you with a "come back when it's ready".
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