Politics may have been extremely polarizing lately but the United States is still a magnet for global startups. Despite the current state of international affairs, the travel limitations and work from home guidelines imposed on countries all over the world due to the pandemic there is still reason to start your own business and to choose the US to set it up.
You might feel that things are on hold at the moment but it could be a smart decision to use this year to prepare for 2021 and look at the benefits of incorporating in the US.
Some of the reasons why the US can be a good choice to set up your startup are the following:
1] The US embraces innovation
One of the best reasons to incorporate your foreign startup in the US is how open they are to new technologies in products and services, they truly embrace change. This can be the perfect environment for your startup to thrive and grow in an ever changing landscape that likes to challenge the status quo and is always at the forefront of new technology development.
This kind of mindset can help your startup find the venture capital you might be looking for by being in the right kind of environment that nurtures investments and innovative ideas.
2] The US has high levels of immigration and integration
There might be a lot of controversy in recent years around immigration laws but the US has always been a country of opportunity and has always welcomed immigrants since its formation. Especially in the main business hubs of New York, San Francisco, Los Angeles, Boston and Silicon Valley the majority of startup owners and employees are foreigners or children of immigrants - there is a long line of successful immigrant entrepreneurs in the States.
3] The US is a global hub
If you want your startup to truly have an international feel for marketing and branding purposes then the US might be a good choice to create your business as it is always at the forefront of global trends in technology and many other industries that are innovative and part of the future business landscape.
The US has an open and friendly attitude towards business ventures and entrepreneurs thrive in such a positive and extroverted environment. There are no real business restrictions between the US and other countries thus a foreign startup can feel like part of the wider global business family without feeling cut off from the world.
4] American culture is influential
Why not incorporate your business in a country that has global influence through its pop culture, technological advancements, financial benefits and access to a host of opportunities in various industries. You can profit off of the credibility and branding that a US incorporated business can offer you as well.
5] Foreign startups are not treated differently
There might be some more hurdles that you will need to overcome as a foreign startup setting up a business in the US but you will still be able to enjoy the same benefits that solely US based businesses have.
There are some formalities that will need more effort on your part or even require travel to the US, for example if you want to open a US bank account and do not already have one in your name. This is due to US money laundering laws; banks are required to know their clients so opening a bank account might not be able to be done remotely.
LLC and Corporation formation in the US as a foreign startup
The most popular business structures for foreign startups might be LLCs and Corporations as they both have liability protection for the owners and are perfect for high risk ventures that want to keep business and personal affairs separate.
LLCs and Corporations have many advantages for businesses that are well established and are making or expected to make substantial profits and need liability protection.
They are also pretty simple to set up but you do have to make sure that you will be able to obtain a US visa in order to travel to the US and take care of formalities and paperwork that cannot be handled remotely. Apart from researching what paperwork is needed to set up your LLC or Corporation which is fairly straightforward, you will need to find the right type of business structure for your business.
There are also informal business structures to consider if your startup is quite small and does not intend on making a major profit anytime soon and is in a low risk industry. The main types of informal business structures are sole proprietorships that have one owner and partnerships that have more than one. These structures do not offer any liability protection or tax benefits so you should keep this in mind when considering them.
If you need more insight TRUiC can be an invaluable source of information on the subject of US business structures for foreign startups; you can look into setting up an LLC, a Corporation or even more informal business formations such as a sole proprietorship or a partnership depending on your business needs.