Breaking into the U.S. market can be a rewarding venture for many foreign individuals and businesses. As a place to do business, the United States offers a regular and transparent legal system, outstanding infrastructure, and access to a lucrative consumer market.
Business entities are formed at the state level in the U.S. Which state you choose depends on where and why you are forming the business. Some U.S. states are more “business-friendly” or “international-friendly” .The process will vary from state-to-state, but generally involves registering or forming an entity with the state’s Secretary of State. Depnding on the type of entity you may also have an attorney draft an operating or shareholder agreement.
Before determining what entity to form you should consult with a lawyer and tax advisor to determine the type of entity to form for both liability and tax purposes. Most foreign individuals own their U.S. business interests through foreign entities for both business and tax purposes. These professional advisors can also be an invaluable resource in learning how to operate your U.S. business and in making connections in the U.S. markets.
The steps to starting up a U.S. business are as follows:
- Determine the legal structure of business, deciding whether to form a sole proprietorship, partnership, LLC, or corporation;
- Registering the business with the state Secretary of State’s office;
- Obtain a Tax Identification Number (TIN) from IRS and open a business bank account. This will be required to open up a bank account, file tax returns and make payroll payments;
- Register for state and local taxes;
- Obtain business licenses and permits as necessary.
Investing in the United States brings many advantages. With a population of more than 300 million and the largest economy in the world, the United States is the most important market for any global company who wants to enlarge its potential and credibility.