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Company formation USA
Company formation USA offers one of the largest consumer market, which hardly any other country has to offer. This has the advantage that even in times of crisis, stable and consumer-friendly customers exist. For company founders, this location is therefore very interesting.
Legal structures of a company in USA
In the US there are two important legal types of structures to choose from; LLC and Corporation.
Key information regarding a Corporation structure :
Shareholders completely insulated from liability if the corporation stays in compliance. Resident- and non-resident-owned corporations pay the same tax rate, although foreign-controlled corporations have to file extra information on their tax returns. Tax treaties were usually designed with corporations in mind, so many foreign-owned US companies are corporations. Shareholders are the owners. The shareholders elect the directors, who govern the corporation and set policies and goals, and review the activities and progress of the company. Directors appoint the officers, who run the corporation on a day to day basis. Only officers can bind the company and sign contracts.
Key information regarding a LLC structure :
Members are insulated if they are not managing the company as well, and follow proper procedure to separate personal and business matters. LLCs are fiscally-transparent by default, which can be a problem for non-resident-owned companies. An LLC can choose to be taxed as a corporation, but if they are planning to do this could just form a corporation instead.If the company will not be used to do business in the US, then an LLC is the better entity type. The treatment of distributions from LLCs to foreign owners may be hazy, so be careful of doing business in the US using an LLC. Members own the LLC, and control everything. The Members create an Operating Agreement, which can be as long or short as the Members want, and which sets out all the rules of the company. The Members can appoint Managers to run the company on a day to day basis. If there are many Members, appointing Managers is a wise thing in order to control the structure (and spending) of the LLC.
How is it treated from tax perspective?
US tax law grants a classification option for some specific legal forms. This is exercised by ticking the tax form 8832 and is also referred to as the “check-the-box” procedure. It is possible to choose between three types of taxation : 1. As corporation, subject to US corporation tax, 2. The partnership (LLC), then the profit shares are subject to income tax, 3. In case of a one-person LLC as a “disregarded entity” in which the taxation is immediate takes place at the shareholder.
Major advantages for incorporating in USA
- Quick account opening - physical presence required
- Virtual office in Las Vegas, New York or Chicago
The biggest mistakes when starting a business abroad
Many agencies and company formation law firms do not advise comprehensively or wrongly. Learn what to look for.
Gravity of the situation
Often, these law firms think foreign companies are half-silk, tax evasion is favored and mailbox companies are the leaders rather than the exception. This is true, however, only in some start-up agencies that do not have the necessary expertise. Self-proclaimed law firms that do not employ tax accountants or lawyers usually set up companies that are unlikely to operate legally. We set up and look after companies that can withstand tax audits and that are legally operated.
Is physical presence required in the country where you wish to set up your company?
You can set up a company worldwide, as long as the respective country allows you as a foreigner to acquire shares in local companies or to act as a managing director. If this is not the case trustees can be used. For example, Cyprus allows every EU citizen to own and run a business. Nevertheless, trustees can be used for the purpose of identity protection. However, it is important that the management takes place locally, in the country in which the company is to be taxable. In addition, a permanent establishment must be set up. Without these, a major tax offices around the world do not recognize the company and in the worst case would require additional payment of corporate and business taxes plus late payment surcharges. We rent you a real office and set up a permanent establishment that meets all requirements beyond doubt.
Problematic Law firms: Privacy is not regarded.
Some law firms bind customers with toggle contracts and exert pressure when the customer wants to close his company. If you are a client of a law firm that has established a legally flawed company, they can be blackmailed. Because in the case of a fiscal problem, law firms without a license are not bound by a duty of secrecy.
Migrating to a different law firm
We receive many inquiries from customers who already own a foreign company and are looking for a new law firm. The process of changing law firm is made often difficult on purpose. Therefore, we have developed a principle of trust. If you are not satisfied with us and want to change, you can do that at any time. The necessary documents (resignation letter), you receive from us standardized after founding. You are therefore protected against unexpected costs and you are free at any time to visit another law firm. So far we have not lost any customer to another law firm.
Privacy / Firm Location
Your accounting documents are kept safe with us. In addition, all electronic data is stored encrypted and accessible only by us, which are bound to a professional secrecy. All accounting records are also stored locally only. Neither authorities nor hackers are able to access this data.
There are quite a few locations in the world that do not charge taxes on companies or individuals, or only estimate a very low flat rate tax. But this can rarely be used without corresponding change of residence. If you are a resident of any major country, the relevant double taxation agreement is decisive. Providers who promise otherwise lead them to tax evasion, which in the case of discovery usually punishes severely. We advise against setting up companies in countries that have already been blacklisted by the OECD. The foundation is usually very cheap, but the tax consequences in your origin country can be devastating. Since the introduction of the automatic exchange of information between almost all major countries, an anonymous private account no longer exists.
We comply with the following code:
- Legally secure foundations
- No unexpected(hidden) costs
- No false promises
- Finding the right solution by focusing on your requirements
With this strategy, we have been on the market since 2013 and have not disappointed any customer so far. And we prioritize it in keeping that way. We strive to ensure that every client is satisfied and does not take risks with the solutions we provide for them, but only exploits legal opportunities. Starting a company that involves doing real business is more costly than a letterbox company, but it is the only way to save on taxes without risking legal action.
What makes starting a business abroad so attractive?
As a rule, the financial benefits are the main reason for starting a business abroad. These are not only due to tax savings or lower salaries. There are also other environmental standards in other countries that just reduce the costs of production.
The USA has the following advantages for company incorporation
- Quick incorporation process
- Low start-up costs
Tax burden comparison
Here are some examples of the tax differences between a highly taxed jurisdiction versus major tax havens.
|German Limited (GmbH)||Company in the USA|
|Corporate Tax||15,825% including solidarity surcharge||The corporate tax in the US is progressive.
15% tax on the first $ 50,000 of the taxable profit. Up to $ 75,000, 25% tax will apply and the excess will be taxed at 35%. In addition, there is the income tax of each state, depending on the state of 0 - 12%.
|Business tax||Lifting rate national average 2010 35%||N/A|
Company formation USA - That's how it works
Starting a business in the US is easy and the founder does not have to travel to the US. For the foundation only a certified ID or passport copy and a power bill is needed. Depending on the choice of bank and a short CV or bank reference.