September 30, 2022

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In which state to establish a company in the United States?

In which state to open an American company

If you have decided Open a company in the United StatesYou are faced with many important decisions that you have to make. These decisions include, first of all, what form of company to adopt (which we talked about earlier in the article “Opening a company in the United States? Legislation and advice“) and in Any of the US states put the registered office to the community.

In this article I will go over and outline the main useful items that can guide you in the Choose the United States Where to go Open the company. Before continuing, however, I would like to point out right away that this article is a brief reference and that in these cases it is appropriate to assess the specifics of each case, with the help of legal and tax professionals with experience in internationalization in the USA. At the end of the article you will find a file appearance Contact form to contact us directly and receive tax and legal assistance regarding your situation and procedures internationalization at United States of America.

What to consider when choosing a US state to open a company in

There are many operational and financial considerations that come into play when starting an offshore business, and before that Choose the country Where is a file opened? Company under US law Careful consideration should be given to the various options available. The United States consists of 50 statesEach has its own rules and laws. Choosing one can seem like a complicated option. However, with the help of experienced professionals, you can choose the best case for your specific business needs. First, it should be made clear that you can decide to set up the company in one country but actually operate in another or in several additional states. However, among the main things to consider:

  • The results of your market research (also in relation to the characteristics of competition and Suppliers);
  • reach the target market;
  • tax rates (we should not forget that the United States has state, federal and even municipal rates);
  • initial costs of opening the company;
  • annual costs of company maintenance;
  • time zones;
  • Where it is easy to find talent (American workers who specialize in your industry);
  • Where are the resources and suppliers;
  • business environment
  • The legal system, Business Courts etc.
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Most Selected US State: Delaware

Some US states are more tax friendly, such as Delaware. There are certainly good reasons for the popularity of this state of opening businesses (read more: “Delaware LLC: AdvantagesHowever, Delaware is not always the best state to open a business in.

Advantages of opening a company in Delaware

according to Delaware division of corporations67.8% of companies fortune 500 It is incorporated in Delaware and 1.5 million companies are registered in the state. Delaware has worked hard to position itself as The first US state to slots Society. The Advantages of opening a company in Delaware Includes:

  • The state offers some tax advantages. Delaware does not impose income tax on corporations that are registered in the state but do not operate in the state. In addition, shareholders outside of Delaware do not have to pay taxes on shares owned in the state;
  • there Court specialized in corporate affairs. Delaware has one Embassy Court, which deals only with corporate issues. Judges are experts in corporate law and the decisions of this court tend to be more predictable than those of other states;
  • Deposits and registrations are processed quickly. Delaware was able to register a new company even within a few hours; Generally, on the same day it was requested;
  • there aggregate protected. When opening a corporation in Delaware, it is not necessary to disclose the names of the partners or members of the board of directors (directors). This allows for anonymity, however, beware that this does not mean anonymity for tax purposes;
  • Residence not required. It is not necessary that the shareholders or directors or managers They are residents of Delaware.
  • The social management structure can be very weak. Delaware law permits one person to assume the role of sole shareholder, director, and sole director simultaneously; A very attractive option for small businesses;
  • Investors prefer Delaware. If you intend to increase your investment capital by angel investors or money venture capitalIt is important to know that the vast majority of investors (both private and institutional) prefer investing in a Delaware company.
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Other factors to consider when opening a business in Delaware

  • There are no real tax savings for small businesses. While Delaware does not tax incorporated corporations that do not operate in its territory, the state in which the corporation actually operates will tax your corporation; So choosing Delaware does not allow you to avoid taxes;
  • Deposits and memberships are more expensive. The raise fees It is higher in Delaware than in other states (even if it is still limited);
  • there franchise tax. Even if your corporation does not pay income tax in Delaware, it will have to pay Delaware franchise tax based on the value of the shares. This tax is generally minimal for small businesses (in many cases, less than $200 on an annual basis), but the more shares a company has, the higher. In addition, you may also need to pay one franchise tax in the state (or states) in which the company operates;
  • The company must meet the requirements of the country in which it operates. Even if you open a business in Delaware, you still have to meet the requirements (regarding deposit and licenses) for the country in which the company actually operates. It will be necessaryAnnual Report In both countries
  • It is necessary to set a Registered Agent Based in Delaware. When incorporating your company, you must provide the name of the person or company located in the state of Delaware you are working in Registered Agent The company itself, which can accept legal documents (for example, subpoenas) and official communications from the state in your name. The cost of this service is very low;
  • Legal disputes require travel. Since legal disputes related to your business will need to be heard in a Delaware court, you will need to travel to Delaware to deal with any legal issues. You will also need to hire a Delaware-licensed attorney to handle it.
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Which US state chooses to open a company in the US: conclusions and tips

The choice of a company’s investment model in the United States depends primarily on the type of economic activity to be carried out in the United States and on the growth plan implemented for the company.

open one LLC It can be logical if, say, a A natural person not resident in the United States of America want to make investment Real estate. In the case of purchasing a property in the United States to be rented, in effect, the title deed allows the LLC to deduct the total costs related to managing the property. Tax aspects relating to the taxation of income in Italy (possibly to be distributed to shareholders) and aspects relating to the relevant legislation tax control.

The CorporationOn the other hand, in the event that the ownership of the American company must be owned by one of them Corporation (Srl or Italian Spa) as well as if you want to implement a long-term growth plan in the US market or aim to raise investment capital in the US. Also in this case, the tax implications associated with the taxation of dividends distributed to the parent company domiciled in Italy must be taken into account.

In any case, it is still necessary to consult Professionals with experience in legal and tax matters Before choosing the type of company and country of incorporation. The aim of this article is to get you to start evaluating your situation and then compare yourself to professionals (CPAs and CPAs) who are experts in this topic.

If you are interested in speaking with New York-based Tech Legal Partners PLLC, you can book a consultation. At the end of the article you will find a contact form to fill out. Tech Legal Partners offer comprehensive packages to start your business in the United States with an experienced team of legal and tax advisors who will support you as you grow.
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