USA Company Registration in 2023-24
The country where dreams come true, the USA is a preferred name for startups as well as established organizations to do business. The thriving US markets and access to a global marketplace make it one of the best countries for businesses to thrive. It is an economic superpower with advanced technology and infrastructure coupled with abundant natural and human resources.
Here are some factors that make the USA the best place to establish your presence:
- Helps your business gain an international reputation
- The country has regulations and laws that are business-friendly
- You get easier and better access to capital
- Access to new markets
- Low corporate tax
- Technology-friendly country
- Availability of abundant natural and human resources
- A competitive and innovation-friendly economy
USA Company Registration Process
Here is how you can register a company in USA:
- Find a local registered agent
- Choose the type of entity that you would want to set-up
- Choose the state where you want to register your company in USA
- Determine the state(s) where you would want to conduct business
- Consider the type and activity of business and make a list of the required permits, licenses, and registrations
- Apply for an Employee Identification Number (EIN)
- Open a bank account and a merchant account (if needed)
- Get business insurance
- Understand your tax liability
- Get a list of the documents needed for registration
- File the incorporation documents with the filing office of the state
- Register the company in multiple states if needed
- Start business
USA Company Registration Step-By-Step
It can take between 4 to 6 weeks to register a company in USA provided you have all the documents ready. Also, you will not be required to visit the USA to complete any formalities as our team will do the necessary legwork for you.
Here is a step-by-step process of USA company registration.
Step 01: Consultation & Determination
Once you decide to register a company in the USA, you need to determine if you can legally open a business in the country. Also, you will need to ascertain the state(s) in which you want to incorporate and run your business. You also need to determine if you want protection for your intellectual property or need any special licenses. Our team will help you draft a preparation plan to register a business in the USA.
Step 02: Planning and Preparation
When the business requirements is identified, you need to choose a company name that is relevant, unique, and appropriate. You will also need to determine the type of entity you want to register.
It is important to remember that in the USA, each state has its own laws and regulations. Hence, you need to ensure that you are aware of these regulations before registering your company name and preparing for incorporation.
Step 03: Prepare the documents needed for USA company registration
While the documents needed can vary from state to state, here is a generic list of documents required to register a company in the USA:
- Bylaws of the company
- Operating agreement (for LLCs)
- Employment Agreement
- Apostille (if you are planning to deal with international trade)
- Non-Disclosure Agreement
- Memorandum of Understanding between all the partners in the business
- Proposed business plan
- Privacy policy and terms of use for online portals
- Details about the directors and shareholders
- Proof of registered address
- Details about the partners (for partnership)
- Partnership Agreement (for partnership)
- Other documents as might be needed on a case-to-case basis
Step 04: Application for company registration in the USA
Once you have your documents in place and a local registered agent by your side, you are ready to submit the incorporation application to the respective state department. If you are planning to operate in multiple states, then you will have to register your company in all such states. You will also be required to obtain the EIN and file the BE-13 Survey with the US Bureau of Economic Statistics.
Step 05: Open a Corporate Bank Account
The next step is to open a corporate bank account in the name of the entity. As soon as the bank account is opened, you need to deposit the initial share capital of the company, if required.
Types Of Companies You Can Incorporate In The USA
There are different types of companies that you can incorporate in the USA. Before you register a company in the USA, it is important to identify the best structure for your business.
Here are the different types of companies you can incorporate in the USA:
| Type of Company | Features |
|---|---|
| Sole Proprietorship | While you get a trade name, the entity does not have a legal personality. This means that the proprietor is responsible for the debts of the sole proprietorship. These are good options for low-risk businesses or for those who want to test an idea before registering a company. |
| Partnership | A minimum of two people can work together under a common entity name. You can opt for a general limited partnership (LP) or a limited liability partnership (LLP). Partnerships are a good option for businesses with many owners or professional groups. |
| Limited Liability Company (LLC) | This structure offers the benefits of a corporation and a partnership. It protects you from personal liability unless the LLC faces a lawsuit or bankruptcy. LLCs are a good option for medium-to-high-risk businesses. |
| Corporation – C-Corp | This is a standard business corporation with a legal identity separate from its owners. You are required to maintain financial records and pay corporate taxes. C-Corps are a good option for businesses that need to raise money or intend to go public in the future. |
| Corporation – S-Corp | This is a special type of corporation allowed in some states in the US. It offers the benefit of passing on some profits and even losses directly to the personal income of the owners without being subjected to corporate tax. |
| Corporation – B-Corp | A Benefit Corporation or B-Corp differs from C-Corps in accountability, purpose, and transparency. They are usually driven by a mission and profits. The shareholders of B-Corps hold the company responsible for generating profits and ensuring some public benefit. |
| Corporation – Close Corp | A Close Corporation is similar to a Benefit Corporation with a less traditional corporate structure. |
| Corporation – Non-Profit | These are corporations that are involved in charity or social causes. Non-profit corporations can get tax exemption from the IRS. They are also referred to as 501(c)(3) Corporations. |
| Cooperative | This is a structure that is owned and operated by the people who use its services. Profits are usually distributed among the members of the cooperative. |
Benefits Of Registering Your Company In The USA
| Quick Facts | |
|---|---|
| Types of companies | Limited liability company S-Corporation C-Corporation limited or general partnership |
| Share capital for LTD Company | No requirement |
| Shareholders for Limited Company | Minimum 1 is required |
| The time frame for the incorporation (approx.) | Around 2 weeks |
| Corporate tax rate | 21% |
| Dividend tax rate | Between 0% and 20% |
| Local director required | No |
| VAT rate | 10% |
| Foreign-ownership Allowed | Yes |
- The US has an economic environment that is favorable to international businesses
- The Federal, State, and Local governments offer a range of benefits to foreign investors
- Resident and non-resident businesses are treated the same
- You get access to new markets with different demographics and geographical conditions
- Availability of skilled workers
- Ranks in the 6th position and among the top ten countries for ease of doing business around the world
- Stable political environment
- Well-connected with the world for easy movement of goods
- Access to advanced technology
- Protection of intellectual property is the best in the world
Types of Business Visas in the US
While you can register a company in USA from your home country, if you want to go there to run it, you will need a US business visa.
There are different types of business visas available in the US:
- B1: Short-term visa that does not permit you to sign contracts
- E-1: Valid for the term for which the business is operational in the US. Good for setting up a business that is involved in trade with your home country
- E-2: Allowing you to run and operate a business in the USA
There are various other visas that can be explored. Our team can help you find the perfect visa for your requirements.
Compliances for companies incorporated in the USA
While the compliance requirements will depend on the choice of business structure and the state, here are some common compliance requirements for companies incorporated in the USA:
State Compliance Requirements
- Annual report or biennial statement
- Payment of the statement filing fees
- Payment of franchise tax (if applicable)
- Articles of Amendment (if applicable)
Federal Compliance Requirements
- Payment of Federal taxes
- Compliance with the Affordable Care Act
- Keeping the licenses, permits, and certificates up to date
- Compliance with workplace health and safety laws, advertising and marketing laws, copyright laws, and Americans with Disabilities Act.
USA Corporate Taxation Policy
When a foreign national starts a business in the USA, the net US-sourced income of the business is called ‘Effectively Connected Income’ or ECI. This is taxed at the corporate tax rate of 21% plus applicable state/local taxes. This can be a direct business or via a branch or subsidiary.
Further, if the business holds assets that generate ECO, then it is subject to another tax called, Branch Profits Tax or BPT. The rate of BPT is 30%. However, if there is a treaty between the US and the home country of the business owner, then this rate can be lower.
Also, if the business holds US situs assets, like US stocks or domestic partnerships or US real estate, then the income from such investments can be deemed as ECI or Fixed, Determinable and Periodic (FDAP) Income. FDAP is subject to a tax withholding of 30%.
Tax Calendar in the USA
- Usually, the tax year in the US is the same as the calendar year. You can also choose the fiscal year for calculating tax liability. A fiscal year is a period of 12 consecutive months ending on the last day of any month except December.
- The tax system in the US is based on self-assessment and voluntary reporting.
- Corporations need to file annual returns by the 15th day of the fourth month following the close of the tax year. A six-month extension can be sought for filing returns.
Conclusion
The United States is placed in the sixth position as per the recent Doing Business index. You may find it advantageous to incorporate your business in the USA as you will have access to a number of government and tax benefits as well as a variety of other benefits. There are around 68 double taxation treaties that assist firms in avoiding paying taxes twice on the same income. Additionally, practically every sector is eligible for subsidies and tax incentives from the government, particularly organizations regarded to be beneficial to the US economically or those that increase employment.
You can speak with our professionals at Odint Consulting if you want to register a company in the USA. Due to their extensive knowledge, our business formation specialists can easily walk you through the USA company registration process.
FAQ’s
If all your documents are in order, then you can register a company in the USA within 4-6 weeks. However, some states like New York offer rush processing where the incorporation process is completed within 2-3 days. However, this is available for an extra fee.
There are various factors that you need to consider before deciding the state in which you want to register your company. These include demographics, local competition, the presence of the supply chain, state regulations and laws, and budget.
There is no minimum capital required to register a company in the USA.
No, you can register a company in the USA without leaving India by appointing a local agent.
Yes, you can register a company in the USA as a non-resident. You can either setup a limited liability company or a C-Corp.
A visa available for entrepreneurs who would like to launch a firm in the USA and want to expand and oversee its activities is the E-2 visa.
