Recent data shows that most regions are lagging far behind the United States, mainly owing to the lack of ​​governmental involvement in business practices. This caused the number of startups to decrease, causing the gap between other parts of the world and the United States to widen. As more and more businesses find the onerous constraints in other nations, many are opting for the United States, either for better alignment with venture capital or just to prosper under the more lax corporate standards. This article discusses the growing trend of foreign business creation in the United States, its reasons, and how you may get started if interested.

Why more businesses are choosing the US

In the last few decades, the number of companies interested in establishing their business in the US has increased considerably. There are a few key reasons behind this shift which are illustrated below.

The favourable economic environment

Foreign investors can buy assets in the United States, particularly real estate, at lower prices than they can in their own country. Furthermore, the United States has the largest consumer market globally, with over 320 million inhabitants, many of whom like shopping. There is a wide range of income and interest levels in the United States, so no matter what type of company you may have, it is safe to say the US market has a decent consumer base. 

Flexible residency requirements

Most European countries require a residency permit in the country where you intend to establish your business. But in the US, owners are allowed to live and operate their businesses from anywhere in the country and do not require any special permit. Additionally, in the United States, all foreign or locally held companies are treated equally. This ensures a level playing field between competitors, and no one can seek unfair advantages. 

Federal, state, and municipal governments all provide incentives

Many states in the US provide financial incentives to foreign investors who set up shop in a particular region. Some tax benefits are also available and have lately reduced commercial real estate taxes for foreign investors. Furthermore, the United States government provides a wide range of services to American enterprises, which you will be able to take advantage of when you establish your company in the United States.

How to form an LLC as a foreigner

Now that we have seen the advantages of expanding business in the United States let us discuss the process to expand a business as a foreigner.

Choose a business structure

C corporations, S corporations, and LLCs are the three structures available to companies when looking to extend their operations in the United States. While each has advantages and disadvantages, most organisations will benefit from LLCs since they offer various advantages, including no restrictions on where you live and some tax exemptions. 

Choosing the right state

The next stage is for the business owner to decide where they want to set up their company. Delaware and  Nevada are some of the most strongly recommended states for enterprises due to their business-friendly taxation rates, maintenance costs, and corporate regulations. But for many businesses, other states can be just as lucrative, especially if they can benefit from a large population or the many commercial hubs that are set up. Some popular states with large consumer markets include New York, California, Florida, and Texas. 

Fill in the paperwork

Each state's LLC  registration requirements differ slightly, but they all follow the same basic pattern. To summarise, companies must choose a distinctive name, select a registered agent and complete a certification of incorporation. After incorporation, the company must file a report and pay a franchise tax every year.

Get an EIN

For companies, an Employer Identification Number (EIN) is the equivalent of a social security number. It enables them to recruit staff and create bank accounts for their businesses. An EIN may be obtained for free straight from the IRS.

Bottomline

Due to the various advantages, small companies operating in different parts of the world increasingly choose to incorporate their business in the United States. This gives them access to a broader audience as well as international exposure to make it global. 

While the LLC application procedure is free, it may be rather complicated and time-consuming for people who are not fluent in this field. For a small cost, several organisations offer an LLC creation service online, which will significantly lessen the stress and chance of a glitch when compared to the 'DIY' approach.