How to start a company in the United States?

by CorpSeed Pvt Ltd Environment | Compliance | Finance

The United States has always attracted entrepreneurs around the world, who see it as an environment particularly favorable to entrepreneurship. The spirit of creation and conquest of new markets so characteristic of the United States encourages these entrepreneurs to try the adventure of starting a business on American soil. With more than 320k inhabitants, the development prospects for businesses are immense.

The entrepreneurs who have launched themselves continually praise the administrative flexibility and the business opportunities offered by this country compared to other countries like India, although the situation is continuously improving.

However, if launching your business in the United States may seem easy, it is essential to prepare well so as not to experience failure.

If you too wish to immigrate to the country of Uncle Sam to set up your business there or simply to test the marketing of your products and / or services on this market, we suggest that you read the following tips.

Define Your Implementation Strategy

If you want to successfully set up in the USA , you must of course start by developing your business plan  and  studying your market in order to develop a strategy that is adapted to it. It is the very basis of the business creation process . Carrying out  a good market study is an essential prerequisite for absorbing the functioning and state of the market, as well as the competition.

Then, it should be emphasized that getting started in the USA can be done in several ways: getting started without creating a company in the USA (via a simple website in English for example), getting started without creating a company in the USA but using the services of an on-site representative capable of interacting with local customers and suppliers on your behalf or even getting started by creating your company on site .

There are therefore several ways of considering setting up in the United States for an entrepreneur. To advise you on the appropriate strategy, the lawyer or “lawyer” specializing in business law and present on American soil is often the privileged interlocutor. Your role will be to advise you on the best implementation strategy and to draft all the appropriate legal documentation for your company, be it your articles of association or your commercial contracts in order to guide you among the various constraints. laws and regulations that govern your activity at federal and state level.

Get a Work Visa  

To immigrate to the United States and set up your business there , you will need a visa. In terms of immigration, American law provides for a multitude of work visas to which a foreign worker can apply: E-1 visas (“Trade” visa), E-2 (“investor” visa), L-1 (“intra-group transfer” visa) or H-1B ( temporary work visa for specialized workers) . Each of them corresponds to a specific situation and has specific criteria to be met in order to be awarded.

For foreigners wishing to start a business in the United States from India, applying for E-1 and E-2 visas may be a good option, although these visas are more expensive than the L-1 visa. For example, applying for the E-2 visa requires that the applicant invests or is about to invest a “sufficient” sum in a business in the United States. It is the State Department and Immigration Services (USCIS) which will determine, given the nature of the activity undertaken, whether the investment is “sufficient”.

The financial obstacle that can constitute obtaining an E-1 or E-2 visa pushes an increasing number of foreign entrepreneurs to apply for obtaining the L-1 visa. This visa is particularly intended for foreign companies wishing to set up in the United States by opening new premises on American soil. This visa is renewable each year for a maximum period of 5 to 7 years depending on the case. After this time, the visa holder must leave the United States for at least one year before applying for a new visa.

Let’s be clear, the conditions for obtaining a visa are complex and must respect a strict formalism, this is why it is strongly advised to be accompanied by a specialized lawyer to maximize the chances of success of obtaining the visa.

Create Your Business In The USA

In the United States, there are four predominant social forms for societies:

It is the social form suitable for a self-employed entrepreneur or a self- employed person. Its advantage is that it offers a certain flexibility to the entrepreneur who is not obliged to register as a company. However, to exercise certain activities regulated at federal and / or state level, he must have a certain authorization. Also, the income of the company and that of the owner are the same. Taxation is therefore made on this same income. This is its real drawback.

We choose this social form as soon as there are at least two owners to run the business. With such a status, for all actions of the company, each owner is responsible for his own funds. Here, registration is required. There are two forms of Partnership: the General Partnership in which the company is divided equally and the Limited Partnership allowing to limit the control and the responsibility of specified partners.

Read also: Business Registration

The Corporation is an appropriate form of corporation when you choose shareholding. From the moment you manage to have shareholders, you can choose this social form. Whether in terms of responsibilities or in terms of taxes, such a business is separate from its owners. Only the company is legally responsible for its actions and debts. And this is the advantage for the owners. However, the company may be taxable twice; when it declares a profit, and when it distributes dividends. The Corporation exists in two traditional forms: C Corp and S Corp. In general, foreigners cannot be shareholders of an S Corp. The form available is therefore the C Corp, unless the foreign shareholder has a permanent resident visa.

 The LLC (Limited Liability Company)

It is a hybrid form of partnership between Partnership and the Corporation. Its advantage is that it benefits on the one hand, from the tax efficiency and operational flexibility of the Partnership, and on the other hand, from the limited liability of the Corporation. The “Members” of the LLC may be, depending on the different States, natural persons, Corporations, single members (one-person LLC), or even other LLCs.

It must also be taken into account that to develop your business in the United States, you do not have to settle physically. You are given the opportunity to position yourself with a representative on site or even with a simple website respecting American standards.

Anticipate Labor Law Issues

Labor law in the United States is quite restrictive and requires serious consideration so as not to miss an obligation for your company. Indeed, the creation of a company on American soil and the hiring of local employees imply to carry out a series of registration with the tax administration and state and federal agencies and to subscribe to several insurance policies mandatory.

Each state has its own specificities in terms of labor law , so it is more than advisable to seek the services of a specialist lawyer to assist you.

Protect Your Business Relationships

In India, two partners who wish to establish a commercial contract to supervise their employment relationships must comply with the provisions of the Civil Code and the Commercial Code to draw up this contract. The law therefore imposes certain rules which a contract cannot violate on pain of nullity. On the other hand, in the USA the situation is somewhat different since American law is essentially an unwritten law which is based on the different cases of case law of the courts of each State. In the event of a conflict between business partners , the way in which the contract has been drafted will be decisive in deciding which of the partners is at fault. This is one of the reasons why the contracts subject to American law are generally much longer than the contracts subjected to French law, since it is necessary to provide for all possible cases.

As two business partners are free to include the clauses they wish in the commercial contract which binds them, it is essential to have their commercial contracts drawn up by a competent lawyer so as not to place all the responsibility on your company in the event of litigation. This reflection is valid for all commercial documentation: service contract, partnership contract, general conditions of sale or use, etc.

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Created on Jun 20th 2020 07:02. Viewed 347 times.

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