The need to expand to global markets, leads thousands of entrepreneurs and businessmen to inquire about the most attractive and stable places based on the growth projection of each project.
One of the best known scenarios is the United States, entering this market will always represent a boost in multiple areas such as: proximity to suppliers, access to high-traffic or high-performance ports, the incorporation of wide-ranging payment processing gateway, in addition to joining a strengthened and constantly growing economy.
REASONS TO REGISTER YOUR COMPANY IN THE UNITED STATES
The main reason for registering a corporation or forming an LLC is to minimize your personal liability, once your business is incorporated (either by forming an LLC or a corporation), it exists as a separate business entity, basically you put a wall separating your personal assets of anything in business.
Of course, there are other benefits too, these are the main reasons to register your company in the United States:
- Minimize your personal liability and protect your personal assets.
- You can get more flexibility when it comes to taxes. (Talk to our team of tax advisers for specific advice on your personal situation)
- Increase the credibility of your small business.
- Add a layer of privacy (By not using your personal name and home address to represent your business)
- Build your business credit.
- Protect your company name and brand at the state level. (You can also protect it globally with our trademark registration service)
PROCESS TO REGISTER A COMPANY IN THE UNITED STATES
Although it is true that to register a new company or a branch of your company in the United States, administrative procedures are required in which attention to detail must be paid, comply with government regulations, specifically define the company's own structure and the market niche to be exploited, it is also important that you know that this process doesn't have to be a headache for you, for this purpose we have prepared a list with some important steps to follow before, during and after registering your company in the United States to facilitate this task.
STEPS TO FOLLOW BEFORE STARTING THE FORMALIZATION OF YOUR COMPANY
Determine the Type of Entity
Let's start by knowing the most common American business structures, each of them will mainly determine: the separation of personal property from business property, tax implications, complexity vs liability protection, and profit and loss distribution.
An LLC (limited liability company) is a hybrid of sole proprietorship / partnership and corporation, this structure is very popular with small businesses for good reason, the LLC limits the personal liability of the owners, but doesn't require much of the formality and paperwork of the corporation.
This makes it a great option for business owners who want liability protection, but don't want to deal with exhaustive meeting minutes, addendum filings, or other paperwork that you would need to file as a corporation.
Incorporating as a C Corporation can result in higher taxes for some small business scenarios due to double taxation, with a C corporation, the business must pay taxes on the profits, and then the owners also pay taxes when the profits are distributed to them. .
Obviously, if you are looking to put your small business profits in your own pocket, you may end up paying a lot in taxes.
As mentioned above, the C Corporation tax structure is not optimal for many small businesses, as business owners often pay taxes twice on profits, however, corporations may opt for the tax treatment of “ S Corporations ”, often called a“ transfer ”entity, an S corporation does not file its own taxes, instead, the profits and losses of the business are transferred and reported on the business owner's personal tax return.
To qualify for S Corporation tax treatment, you will need to complete Form 2553 with the IRS, you will need to do this no more than 75 days from the date of incorporation, or no more than 75 days from the start of the current tax year, have Note that not all companies can qualify to be an S Corporation, for example an S Corporation cannot have more than 100 shareholders and all shareholders must be US citizens or residents.
Choose the most suitable state to register your company
Before forming your company, you will need to choose in which state you want to incorporate. In the event that you are a resident of the United States, incorporation in your home state is the most recommended, if you are a non-resident alien, everything will depend on the requirements of your organization, Delaware, Nevada and Wyoming are popular states for incorporation Due to legal and other benefits, if it is not entirely clear which state to select, consult our team of advisers, we will gladly guide you and make suggestions according to your needs.
Choose the Name of your Company
Choosing the name of your company can be one of the most complex tasks, achieving a striking name and at the same time being easy to recognize or remember is sometimes one of the main obstacles to face, we recommend that you choose something that perfectly represents your product or service while standing out from your competition.
One suggestion is to use simple, distinctive, meaningful, emotional words, try to create a verbal or sound association trying to create a mental image of your products or services.
You should also verify that the company name is not used by anyone else in the states where you want to do business, if you have already defined the name you will use for your company, but are still fine-tuning details before registering it, you can request our reservation service name to prevent it from being used by someone else.
Get a Registered Agent for your Business
To incorporate your business, you must have a "Registered Agent" these are persons or entities that are designated so that they can accept legal notices and other correspondence for your business on your behalf, if you have chosen a person as a registered agent, you must live in the The same state in which the company is registered, if you choose a company as a Registered Agent, it must be able to do business in that state, they must also have a physical address and not a PO BOX.
Our company provides a comprehensive registered agent service that is free for the first year if you register your company through our plans. Our registered agent service includes a panel where you can review received documents, receive automatic notification of correspondence, and get free forwarding of all official legal correspondence.
Note that if you are a resident of the United States, you can act as your own registered agent, but many business owners choose to have a professional registered agent service for privacy, availability or other concerns.
STEPS TO FOLLOW FOR THE FORMALIZATION OF YOUR COMPANY
Register your Company
There are three common methods of incorporation for forming an LLC or a Corporation, each with its own pros and cons depending on your needs:
- Do It Yourself: It is the lowest cost method, but you will need to do it all on your own, this is the best option if you are more interested in saving money than time, with this route you have to be able to deal with many details and government rules.
- Online Legal Incorporation Service: An online legal filing service will complete and file the documentation for you. Like any legal document, the articles of incorporation and application forms are full of tedious details, a professional service can ensure that your application is successful and processed smoothly. Our team can talk with you about your requirements and prepare the most appropriate plan to achieve the objective of having your company operating in the United States in record time.
- Hire an Attorney: This is the most expensive option, but may be necessary in certain situations. For example, if you have complex requirements on how your shares should be allocated or if you are dealing with millions of dollars, you should seek the advice of an expert. If this is your case, contact our team and we will advise you on the matter.
It is important to take into account that to register your company in the United States you must have a valid business address, depending on the type of company this address may be your home address if you are a resident of the United States, in the event that you If you are a non-resident foreigner, you can rent a physical or virtual office, see our virtual office options directly in our online store. Our team can also manage the rental of a physical office space if required.
When incorporating with our plans, you can choose whether to use our virtual office services.
Request your EIN
Whether you intend to employ people or not, you will need your federal identification number (EIN) from the IRS. This unique number allows LLCs, Corporations, and Sole Proprietors to identify themselves for tax purposes.
Think of your EIN as a social security number for your business, you use it to pay wages, file taxes and pay any money you owe to the IRS, your state secretary may also use an EIN for certain administrations or tax related payments.
All of our incorporation plans include the request for the EIN of your company, avoiding that you have to complicate with this type of paperwork.
Open a Business Bank Account
If you are an LLC or a Corporation, you must have a separate business bank account, managing your business finances in a different account will make it much easier to manage financial transactions, see when invoices have been paid, keep track of expenses and reconcile them with your accounting records.
Setting up a business bank account is easy, each bank has its own requirements, but most will need your state's incorporation documentation (such as your Articles of Organization) and your EIN, we can tell you all the information you need and send it to you.
When it comes to banks, choose one that works for you, whether it's a large chain like Bank of America, Wells Fargo, or Chase, or a smaller local bank.
Contact your bank to see what your specific requirements are for opening a business bank account, most banks will provide checkbooks and business debit cards linked to your account.
In the event that you are a non-resident foreigner of the United States, contact our team and we will gladly provide you with all the advice regarding the procedures to follow to open your commercial bank account.
Apply for the ITIN For you and your Partners (Non-Resident Foreigners)
Any non-resident foreign person who forms a new company in the United States must request an ITIN number from the IRS at least 2 months in advance of the deadline for filing taxes, this number will allow them to file declarations before the tax service Additionally, having your ITIN you can manage the opening of a personal bank account. You can request that we handle your ITIN application directly from our online store.
If you use our company incorporation service in the United States, you can request the management of ITINs for you and your partners (if you have them) at the time of placing your order, the ITIN application process takes approximately 8 weeks and this Time depends entirely on the volume of requests that the IRS handles when submitting your documents.
An ITIN does not authorize an individual to work. The ITIN is only for reporting taxes.
STEPS TO FOLLOW AFTER REGISTERING YOUR COMPANY
Register your Commercial Name
When registering your company, other companies will not be able to register with the same name in the state where you have been incorporated, if you want greater protection of your commercial name, you can register it as an official trademark, we provide the full service of search and registration of trademarks - We check to see if your name is already registered with the US Patent and Trademark Office and if available we will register it on your behalf.
Define your Corporate Identity
You may want to design a logo yourself or use an inexpensive design service, but it is generally worth paying for a graphic designer. Our Branding team can help you create the perfect design for your company logo as well as your corporate image, selecting the appropriate font and color combination.
Remember that your logo is the first part of your brand in the world, so investing time and money to get it right will pay off later.
Request the Business Licenses You Require
Depending on the type of business you run, you may need certain licenses from the city, county, region, state, or federal government, these requirements vary between industries. For example, to run a restaurant you will need food and hygiene certifications, if you want to sell alcohol you will need a liquor license.
The world of permits and licenses can be complex, for that reason we offer a commercial license research service to help you, we investigate all the permits or licenses you may need and inform you how to apply for each one, the costs and even We help you to correctly complete the application forms.
Set up a Payment Processor
You may need a payment processor to accept credit and debit card payments from your customers. Some accounting programs, payment gateways, and other settings allow you to accept cards automatically, especially if you are only making payments online.
If you accept payments in person (such as in a physical store), we can help you set up the right solution to get the best rates on your card transactions.
Learn how to Track Expenses
Every business has to spend money to run, these payments for the goods and services necessary to run your business are "expenses", generally the expenses are deducted from the income of your business when you calculate your profits you will not normally have to pay taxes on their expenses.
Expenses can be complex, our accounting team can discuss the details with you; These are some of the most common that you can deduce:
- Product costs: raw materials, manufacturing, shipping, etc.
- Office expenses: rent, insurance, repairs, utilities, etc.
- Operating costs: Software, hardware, furniture, accounting, hosting, miscellaneous, etc.
- Customer service costs: returns, repairs, refunds, customer service systems, etc.
- Marketing and sales costs: marketing, advertising, branding, etc.
- Transaction costs: Fees for processing payments through PayPal, Stripe, or debit / credit cards
Understand the Types of Taxes
There are many taxes you will have to pay as a business owner, if you registered your business as an LLC, the profits from your business will flow through to your personal tax return, which is where you will pay taxes.
The types of taxes you will need to pay include:
- Federal income tax: You will need to pay income tax on the profits you make from your business.
- Self-Employment Tax: Unlike employees, your business profits will be subject to a self-employment tax (FICA and Medicaid). This is a little over 15 percent of your earnings. (Applies only to residents of the United States)
- State Tax: Most states have a state income tax, if yours does, your earnings will be taxed as usual, to register for state taxes, visit your secretary of state's website or ask our team for advice.
- Payroll Tax: If you pay employees, you will be liable for payroll tax.
- Corporation Tax: If you are incorporated as a C corporation, you will also have to pay corporation tax; You will be taxed both on your profits as a business and when you make a profit from your business. This “double taxation” is one of the reasons we typically recommend LLCs as a good business structure, as they avoid them.
- Other taxes: In certain circumstances, you may have to pay other types of taxes. Our team of accountants will inform you of what other tax you may be responsible for.
Once you know what taxes you are likely to pay, you will have to pay estimated taxes to the federal and state government four times a year.
Important note for non-resident foreigners:
Anyone who has income from US sources must pay taxes on that income, you as a non-resident alien must file Form 1040NR, do not let them fool you into saying that you should not pay taxes as a non-resident alien, as this can lead to legal problems with the finance department.
If your business sells physical products or certain types of services, you may need to collect sales tax and pay it to your state department of revenue, sales tax is usually collected at the point of purchase when you sell the product or service to your customer.
Sales tax rates vary slightly depending on the region, county or city in which your business is located. The types of products or services that you should collect sales tax on generally include:
- Goods that you sell like books, cars, electronics, furniture, appliances, raw materials, etc.
- For some services you provide, most states do not collect sales tax on necessities, such as food, medicine, clothing, or gasoline.
What is the Sales Tax Nexus?
Another important concept for sales taxes is that of "nexus." A nexus, also known as "sufficient physical presence," helps define whether you will have to pay sales tax in a particular state, for example, if you have a nexus in North Carolina, you must pay Carolina sales tax. North.
For traditional brick-and-mortar companies, the idea of a sales tax nexus is simple: If you have a physical store, office, or other presence, you will have to pay sales tax to the state government.
Where it gets more complicated is if your business is an online retailer or e-commerce website, because you are selling across state lines, having a nexus or not is a little more confusing, it is usually will define you as a nexus if you have an office, employee, warehouse, or branch in a state.
Some states may also define a sales tax nexus if you make a certain amount or quantity of sales, or if you are temporarily doing business in a state, if you have a nexus, you will need to collect the sales tax and pay it to the state government. Because the nexus rules can be confusing, we recommend consulting with our team of accountants and we will gladly clarify all your concerns.