Published on and written by Cyril Jarnias
The United States remains a top destination for entrepreneurs worldwide looking to expand their business internationally. With the world’s largest consumer market, a dynamic business environment, and numerous tax benefits, establishing a company in the USA can prove to be a wise strategic decision to boost your business. In this article, we will explore in detail all aspects of starting a business across the Atlantic, from legal structures to administrative procedures, including taxation and recruitment.
The American Dream: Why Create Your Company in the United States?
Launching your business on American soil offers numerous advantages that make it a particularly attractive option for entrepreneurs:
A colossal and dynamic market: With over 330 million consumers and a GDP of $23 trillion, the United States offers unparalleled growth potential. The size and diversity of the market allow for rapid testing and development of new products or services.
A pro-business environment: The country is renowned for its entrepreneurial culture and regulatory framework favorable to businesses. Establishing a company there is relatively simple and fast compared to other developed countries.
Access to funding: The United States has a highly developed venture capital ecosystem, offering numerous fundraising opportunities for innovative startups.
Advantageous taxation: Since the 2017 tax reform, the corporate tax rate has been reduced to 21%, making the country more competitive tax-wise.
Innovation and talent: The country is home to many world-renowned innovation hubs like Silicon Valley, attracting top talent in various fields.
International credibility: A presence in the United States can significantly strengthen your company’s credibility and visibility on a global scale.
Good to know:
The United States regularly ranks among the most favorable countries for entrepreneurship according to the World Bank’s “Doing Business” report, particularly due to the ease of creating a business and obtaining credit there.
American Legal Structures: Choose the Right Form for Your Project
The American legal system offers several options for structuring your business. Here are the main legal forms to consider:
LLC (Limited Liability Company)
The LLC is the most popular structure for foreign entrepreneurs. It combines the flexibility of a partnership with the protection of a corporation:
C-Corporation
This structure is preferred by large companies and startups aiming for strong growth:
S-Corporation
Similar to C-Corp but with tax advantages for small businesses:
Sole Proprietorship
The equivalent of a sole proprietorship, suitable for solo entrepreneurs:
Good to know:
The LLC is often recommended for foreign entrepreneurs as it offers a good balance between legal protection, flexibility, and tax benefits, while being relatively simple to manage.
American Taxation: A Major Asset for Your Company
The American tax system offers several advantages for businesses, especially since the 2017 tax reform:
Competitive tax rate: The federal corporate tax rate is set at 21%, placing the United States in the lower range of OECD countries. Some states apply an additional tax, but the overall rate remains attractive.
Tax incentives: Numerous tax credits and deductions are available, particularly for R&D, capital investments, or job creation.
Tax treaties: The United States has signed tax treaties with many countries to avoid double taxation.
LLC taxation: LLCs benefit by default from pass-through taxation, avoiding double taxation.
Sales tax: There is no federal VAT, but most states apply a sales tax ranging from 0 to 10% depending on the jurisdiction.
It’s important to note that taxation can vary significantly from state to state. States like Delaware, Nevada, or Wyoming are particularly attractive from a tax and regulatory perspective.
Good to know:
Delaware is often considered the internal tax haven of the United States, with very advantageous taxation for businesses and favorable case law in business law matters.
Creating Your Legal Structure: The Step-by-Step Procedure
Here are the main steps to create your company in the United States:
1. Choose the State of Incorporation
Select the state where you will register your company based on your needs (taxation, regulation, proximity to your activities).
2. Define the Legal Structure
Choose the legal form most suited to your project (LLC, Corporation, etc.).
3. Choose a Business Name
Check the availability of the chosen name with the Secretary of State of the relevant state.
4. Designate a Registered Agent
Appoint a legal representative based in the state of incorporation to receive official documents.
5. Prepare and File the Formation Documents
Draft the articles (Articles of Organization for an LLC, Articles of Incorporation for a Corporation) and file them with the Secretary of State.
6. Obtain an EIN (Employer Identification Number)
Request this tax identification number from the IRS (Internal Revenue Service).
7. Draft Internal Documents
Establish the Operating Agreement (LLC) or Bylaws (Corporation) to define the company’s internal operations.
8. Open a Business Bank Account
Choose an American bank and provide the necessary documents to open a business account.
9. Obtain Necessary Licenses and Permits
Check the specific requirements for your activity and location.
Good to know:
Creating an LLC can generally be done online in 2 to 3 weeks, at a cost ranging from $100 to $500 depending on the chosen state and services used.
Offshore vs United States: Comparison with Other Attractive Jurisdictions
While the United States offers many advantages, it’s interesting to compare them to other popular offshore jurisdictions:
The United States stands out for its political stability, vast domestic market, and innovation ecosystem, while offering tax benefits comparable to some traditional offshore jurisdictions.
Good to know:
Unlike many offshore jurisdictions, the United States benefits from a positive image and strong international credibility, which can be a major asset for your business development.
Social Obligations: Understanding the American System
The American social system differs significantly from that of many European countries. Here are the main points to know:
Social Security: Employer and employee each contribute 6.2% of the salary (annual cap of $147,000 in 2022).
Medicare: Contribution of 1.45% for both employer and employee, with no cap.
Unemployment insurance: Rate varies by state, generally between 2% and 5% of payroll.
Workers’ Compensation: Mandatory insurance covering workplace accidents, with costs varying by industry and state.
Paid leave: No federal legal requirement, but most companies offer it to remain competitive.
Health insurance: Mandatory for companies with over 50 full-time employees, often offered by smaller structures to attract talent.
It’s important to note that practices and expectations regarding social benefits can vary considerably by industry and geographic location.
Good to know:
Although social charges may seem lower than in Europe, it’s crucial to properly budget for the social benefits expected by American employees, particularly regarding health insurance.
Opening a Business Bank Account: Key Steps
Opening a professional bank account is a crucial step for your American company. Here’s the procedure to follow:
1. Choose the Bank
Opt for a national bank (Chase, Bank of America, Wells Fargo) or a local bank depending on your needs.
2. Prepare Necessary Documents
3. Schedule an Appointment with an Advisor
Most banks require an in-person meeting to open a business account.
4. Make an Initial Deposit
The minimum amount varies by bank, generally between $100 and $1,000.
5. Set Up Online Banking Services
Activate online banking features to facilitate remote account management.
6. Obtain a Business Credit Card
Consider applying for a professional credit card to clearly separate personal and business expenses.
Good to know:
Some banks offer special deals for new businesses, including reduced fees or account opening bonuses. Compare offers to find the one that best suits your needs.
Promising Sectors: Where to Invest in the United States?
The United States offers opportunities in many innovative and growing sectors:
Information technology: AI, cloud computing, cybersecurity, blockchain.
Health and biotechnologies: Telemedicine, gene therapies, connected medical devices.
Renewable energy: Solar, wind, energy storage, electric mobility.
Fintech: Digital payments, neobanks, insurtech, automated wealth management.
E-commerce and logistics: Innovative delivery solutions, specialized marketplaces.
Edtech: Online learning platforms, virtual reality for education.
Agrotech: Vertical farming, alternative proteins, precision technologies.
These sectors often benefit from significant support in terms of investments and favorable public policies.
Good to know:
The United States remains a leader in many technological fields, with a particularly dynamic innovation ecosystem. In 2021, American startups raised over $300 billion, nearly half of the global total.
Recruiting in the United States: Keys to Building Your Team
Recruitment is a crucial challenge for the success of your business in the United States. Here are some essential points to consider:
Understand American work culture: Value individual initiative, flexibility, and direct communication.
Use the right recruitment channels: LinkedIn, Indeed, Glassdoor, but also alumni networks and professional events.
Offer attractive packages: Competitive salary, health insurance, retirement savings plan (401k), stock options for startups.
Master legal aspects: Respect anti-discrimination laws, verify candidates’ work eligibility (I-9 form).
Consider regional differences: Salary expectations and skill profiles can vary significantly by region.
Integrate effectively: Implement a structured onboarding process to facilitate new employee integration.
Manage diversity: Value cultural diversity and inclusion, which are major assets in the American market.
Good to know:
The American job market is generally more flexible than in Europe, with high professional mobility. It’s common for employees to change companies frequently, which can impact your talent retention strategies.
Creating a company in the United States represents an exceptional opportunity for ambitious entrepreneurs. With a huge market, a business-friendly environment, and a premier innovation ecosystem, the USA offers fertile ground for your business development. However, navigating the administrative, tax, and cultural complexities requires careful preparation and often expert guidance.
Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
