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Company Formation in USA

Overview :

An economic and political powerhouse, the United States is unmistakably a prominent business player. A nation founded on the fundamental principle of equality. Considering the volume of exposure many of us have to certain aspects of American culture, when doing business in the United States of America it is important not to fall in the trap of feeling it is already familiar. Just like any other country, it is imperative to understand the cultural concepts behind the surface in order to harness the many benefits of doing business in the US like those highlighted below.


Advantages
  • Firms that operate in USA tend to develop at a much quicker pace.
  • Exposure to foreign competition will encourage increased efficiency. Doing business in the international market allows firms to improve the quality of their product in order to gain a competitive advantage.
  • Business presents firms with new market opportunities. These new markets provide more opportunities for expansion, growth, and income.
  • A bigger market means more customers, increased revenue, a larger profit margin, and allows the business to realize economies of scale.
  • The United States has entered into tax treaties for the primary purpose of eliminating double taxation.
Tax Regime
  • Income tax – 35%
  • Federal corporate income tax is imposed at graduated rates from 15% to 35%. The lower rate brackets are phased out at higher rates of income, with all income subject to tax at 34% to 35% where taxable income exceeds $335,000.
  • Long term Capital gain – 20%

Types of entities

The Corporation :

This type of entity is best suited for seeking venture capital or other outside investment on going, profitable business management looking for traditional structure. The main advantages are Decades of legal precedents to follow Well-understood shares, options and bonds and Well-understood legal structure


Limited Liability Company :

This is best suited for owners looking for less formal structure, investing in real estate and passive investments and corporate subsidiaries. It provides protection for the owners, easy to maintain, extremely flexible for legal and tax purposes, so can be tailored to the needs of the owners and the particular deal. It also has flexible allocation of profits/losses among the members.


Sole Proprietorship :

Sole proprietorship is suitable for those looking for no long term commitment. It is easy to start and stop Simple taxes fast, easy and cheap to form on your own and also easy to close/end.


Time Period

It usually takes 6 days to incorporate a business in USA.