Opening a company in the United States: what you need to know

Open a company in the United States represents an attractive opportunity for many Italian companies. 

This is evident when considering the vast population of over 333 million people and an annual GDP of 25.4 billion dollars (2022 data from the World Bank) which offers access to one of the largest consumer markets in the world.

Having a branch in the country allows you to facilitate business relationships with local companies, as they often prefer to interact with companies subject to American jurisdiction.

In this article we will look at the steps needed to open a company in the United States, and the requirements needed to do so.

Open a company in the United States, which legal form to choose?

Typically, opening a branch in the United States does not involve complex procedures or overly restrictive regulations, thanks to an efficient bureaucracy. However, for a company that wants sell in the United States, it is essential to carefully evaluate the type of company to be established, considering a series of key factors. 

First, let's clarify what it is not necessary for start a business in the United States, answering a common question we receive from our customers:

• have a visa
• be a resident of the United States
• the establishment of a board of directors
• have an American director or partner
• pay a mandatory minimum capital

The type of company to adopt depends on factors such as:

• planning to hire employees
• taxation of profits through the corporation rather than individually
• the assumption of responsibility and risks for any debts
• the choice to undertake the business activity together with a commercial partner

There are three most widespread corporate models in the United States, we present them by illustrating their main characteristics.

Sole Proprietorship

There Sole Proprietorship represents a type of business owned exclusively by an individual, such as a freelancer or small trader. 

It is a very widespread corporate model in the American business landscape thanks to its simplicity of start-up, since it does not require the presence of employees and involves minimal bureaucracy. 

However, it is important to note that, depending on your business sector and professional position, local business permits may be required, in accordance with the laws of the state of residence.

Corporation

A Corporation represents a distinct and independent business entity, made up of multiple shareholders, who own shares in the company. This type of structure offers several advantages, including legal separation between the company and its owners, thus limiting the personal liability of shareholders. 

Open a company in the United States, opting for the Corporation model, means adopting a corporate form that is also widely used in the country, thanks to the stability and flexibility it offers to businesses. 

The most common form of Corporation is the “C Corporation“, which allows you to deduct taxes in a similar way to an individual. 

However, the profits of a C-Corporation are subject to double taxation, as they are taxed at both the corporate and personal levels. Finally, a C-Corporation is subject to specific regulations and must file regular financial reports with the Securities and Exchange Commission (SEC).

Limited Liability Company (LLC)

A Limited Liability Company (LLC) it is a form of company also very widespread in the USA, in which the owners are called partners rather than shareholders. This corporate model is particularly popular due to its advantageous tax features.

In fact, LLCs enjoy preferential tax treatment: unlike Corporations, LLCs are not taxed as separate entities. 

Profits and losses are transferred directly to the members of the company, who report them in their personal tax returns, thus being able to benefit from tax deductions for the individual.  

Additionally, LLCs offer limited liability to their members, protecting their personal assets from any company debt or lawsuits.

It should also be remembered that, in the United States, companies are required to pay a profit tax, currently set at 21% after being reduced from 35% in 2017 through the Tax Cuts and Jobs Act. This means that there are no fixed costs associated when starting a business in America, but taxes are calculated based on the profits generated by the business. 

How to register a company in the United States

Here are the main steps to open a company in the United States in 2024, taking the most common type of company, i.e. a Corporation, as an example:

• Choose the State in which to establish the legal entity, as well as the legal and postal address; 
• Choose the name: check the availability of the corporation name in the chosen state and ensure that it is unique and complies with state requirements;
• Designate a Registered Agent: Identify a registered agent who can receive legal and official communications on behalf of the corporation;
• File incorporation documents: File your incorporation documents with the secretary of state's office in the state where you want to form the corporation. This usually involves paying a registration fee;
• Obtain an EIN: Apply for an Employer Identification Number (EIN) with the Internal Revenue Service (IRS) for tax and business identification purposes;
• Open a separate corporate bank account for the corporation to handle corporate financial transactions;
• Meet tax requirements: Make sure you understand and comply with all federal and state corporate tax laws, including payment of income taxes;
• Obtain the necessary licenses and permits: Make sure you obtain all the necessary licenses and permits to legally operate in the specific industry in which the corporation operates.

Octagona proposes itself as your ideal partner, offering you complete support at every stage of this journey. Thanks to our vast experience and expertise inexport, together with our consolidated presence in the United States, we are committed to accompanying you through every step, ensuring full regulatory compliance and simplification of procedures.