How Can an American Attorney Help You Open a Business in the USA?

Many successful foreign business people are still reluctant to enter the US market. There are several reasons for this, such as the allegedly high taxes and complex regulations. However, this is not always so. For example, in some cases, foreign shareholders of the US companies pay minimal or no taxes. In addition, the US regulations may not be a problem if you have an experienced American attorney who can help you open a business in the USA and provide you with legal services related to running your company in the United States.

By registering a company in the United States, you will gain status in the American market. This status will help you open a bank account, a client brokerage account, lease an office, hire staff, and do many other things that an American company can do. Another advantage of setting up a business in the USA is the confidentiality of your information. You can register a company in such a way that information about the shareholders is not public.

When it comes to taxes, having a good consultant can help you reduce taxes significantly, and in some cases, you may not have to pay them at all if you are not a US resident. It all depends on your status and on the status of the company you are registering. Therefore, it is crucial to have an experienced American corporate lawyer by your side.

An American lawyer can help you better understand all the pros and cons of establishing your business in the United States. For instance, you will need professional advice when deciding on the type of company you form, the State of its registration, where to open your office, how to open a business account, etc.

What Types of Companies Are There in the USA?

There are the following types of companies in America:

1. Partnerships
2. Limited Liability Companies
3. Corporations

There is one more type of doing business in the United States, namely sole proprietorship. It is the simplest form of doing business in America. It is controlled by a single person and does not form a legal entity. The physical person who does business as a sole proprietor is personally responsible for all business losses.

1. A partnership is an association of two or more persons running their business jointly for profit. The partnership does not have to pay federal taxes. Instead, partners pay their taxes on the distributed profit. On the other hand, partners bear unlimited joint liability for the partnership’s losses. Another essential feature of the partnership is that it does not require registration or any other formalities. A simple, informal arrangement is usually enough to form it. Moreover, some business relationships can be recognized as “partnerships” in court even if their “partners” did not intend to establish them.

In limited partnerships, there are also limited partners besides general partners. Limited partners don’t run the business, and their liability is only within their contribution to the partnership.

2. A corporation is a prevalent form of doing business in America. It offers limited liability to its shareholders and usually has a developed management structure, including a board of directors, corporation’s officers, and regular shareholders’ meetings. Traditional corporations (C-Corporations) have double taxation. First, they pay taxes on the corporate level, and then the declared and distributed dividends are also subject to personal taxation for their shareholders.

Small corporations (S-Corporations) do not have taxation on the corporate level. At the same time, they have certain limitations:

-Small corporations cannot have more than 100 shareholders.

-They can have only one class of shares.

-Their shareholders can be only US citizens and permanent residents.

3. A Limited Liability Company (LLC) is a hybrid form, combining some of the best features of a partnership and a corporation. It is one of the most popular forms of doing business in America. Like in the case of the corporation, members (shareholders) of the LLC are not held personally responsible for any losses or other issues of the company. Their liability is limited by their contribution to the company. On the other hand, like in partnerships, LLCs are not taxed on a corporate level.

Being a hybrid form, the LLC is very flexible in many ways. For instance, it can be managed by members or hired managers. It can have straightforward management like a partnership or rather complex like a corporation. LLCs are legal entities and must be registered in one of the US States.

Which One Is Best for You?

The answer to this question depends both on your business plans and your situation. For instance, if you are going to form a startup in the United States, raise investments in the US venture market, and launch an IPO, you probably should choose a corporation. Moreover, it should be a C-Corporation, because institutional investors and venture capitalists want a familiar structure with certain corporate features and management. In addition to that, there must be different classes of stock. For this reason, S-Corporation would not be a good choice.

If you are a nonresident willing to form a business company in America, your type of company would be an LLC in most cases. However, in certain situations, it also can be a corporation (C-Corporation), even if you are not going to form a startup. There are many issues to analyze and consider before registering a company in the United States.

Which US State Is the Most Business-Friendly?

It is fair to say that, one way or another, all the States in America are business-friendly because America is actively promoting private business initiatives and entrepreneurship. At the same time, there are different factors to consider when deciding which State can be best for you. There are a lot of rankings of the US States based on many criteria. For example, Forbes considers business costs, labor supply, regulatory environment, economic climate, growth prospects, as well as the quality of life. Other rankings can include over 100 criteria.

Although for different businesses, different criteria matter, one of the most important is taxation. That is why it makes sense to start with a tax analysis like in “The 2021 State Business Tax Climate Index”. Keeping state taxes in mind, you can go further by considering other issues in every particular State that are important for you and your business.

If you are a US nonresident and your US company does not have any business in any of the US States, you probably won’t have to pay any state taxes, and the chances are that your federal taxes can be minimal or even zero. However, to get a complete and correct picture of your taxation in the United States, you need to consult a certified public accountant (CPA) or tax attorney.