Table of Contents
Main Reasons to Open a US Company as a Non-resident
Opening a US Company may give you valuable business opportunities. Among the most important are the following:
- You will get access to the US market as a local company.
- Owners of offshore companies have significant problems opening a bank account anywhere in the world. Having a US company will let you open an account in one of the US banks.
- A US company is usually viewed as much more reputable than any offshore or even European company when you do business in the US market.
- It is a must to register your company in the USA if you plan to get access to the American venture capital for your startup.
- The American legal system is based on the supremacy of law and independent courts.
Company Structure: LLC or Corporation?
First, you should choose the structure of your company. As a non-resident, you probably will be choosing between LLC and C-Corporation. It is worth mentioning that besides a C-Corporation, one can form an S-Corporation or small corporation in the USA. However, although the S-Corporation has a similar to LLC “pass-through” taxation, which allows it to avoid double taxation, there are certain restrictions on who can be S-Corporation shareholders. For instance, non-resident aliens are not allowed to be S-Corporation shareholders.
On the other hand, both LLCs and C-Corporations do not have limitations on their shareholders’ citizenship or any limitations on the number of shareholders or whether they are physical persons or legal entities. At the same time, there are important differences between LLCs and C-Corporations. The most important one lies in taxation. Unlike C-Corporations, LLCs are not taxed on a corporate level. The IRS treats LLC as a “disregarded entity” for the tax purposes. Only LLC’s shareholders (members) pay their taxes on distributed dividends.
LLCs are easier to maintain; there are fewer formalities in their structure, decision-making, and annual requirements. So, if you have 1-2 shareholders and you do not need any specific formalities, an LLC would probably be a better choice. But, on the other hand, if you want to set up a structure with its board of directors, annual shareholders’ meetings, etc., or if you plan to raise venture capital in America, you will need a C-Corporation.
Where to Set It Up?
If you plan to conduct business in America, the best state to set up your LLC or C-Corporation would be where you do business. The reason for this is quite simple. In the USA, most corporate laws and legal precedents are of state and not national origin. Thus, your company’s status, the way it conducts its business, and other business regulations will be of the state where you do business.
However, if you are going to form a startup, which aims to raise venture capital, or if your company will have operations in many different states in America, you would probably want to open a US company in Delaware or Nevada. Both states have a reputation of being pro-business. However, Delaware will be a better choice for a startup because this state and its laws are most familiar to venture capitalists. Moreover, some US venture capitalists will not invest in a startup unless it a Delaware company.
Opening your US company is just the beginning. After registration, you will need to get an Employer Identification Number (EIN), open a bank account, lease an office, etc. We can help you to register your company and provide you with other after-registration services. The scope of services will depend upon your type of business and your needs. Please contact us for further details.