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

Opening 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 (2022 data from the World Bank) offering access to one of the world's largest consumer markets.

Having a subsidiary in the country makes it easier to do business with local companies, as they often prefer to interact with companies subject to U.S. jurisdiction.

In this article we will examine the steps necessary to open a company in the United States, and the requirements for doing so.

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

Generally, opening a branch office in the United States does not involve complex procedures or overly restrictive regulations, thanks to an efficient bureaucracy. However, for a company that wishes to selling in the United States, it is crucial to carefully consider the type of company to be established, taking into account a number of key factors. 

First, let's be clear about what is not necessary for starting 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 amount of capital

Instead, the type of society to be adopted depends on factors such as:

• the expectation of hiring employees
• Taxation of profits through the corporation rather than individually
• The assumption of responsibility and risk for any debts
• The choice to undertake the business activity together with a business partner

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

Sole Proprietorship

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

This is a company model that is very popular in the U.S. business landscape due to its ease of start-up, as it does not require employees and involves minimal bureaucracy. 

However, it is important to note that, depending on the 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 separate and independent corporate entity consisting of multiple shareholders who hold shares in the corporation. This type of structure offers several advantages, including legal separation between the corporation and its owners, thus limiting the personal liability of shareholders. 

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

The most common form of Corporation is the “C-Corporation“, which allows taxes to be deducted in a manner similar 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 level. 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) is a form of corporation also popular in the U.S. in which the owners are called partners rather than shareholders. This corporate model is particularly popular because of 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 society, who report them on their personal tax returns, being able to take advantage of tax deductions for the individual.  

In addition, LLCs offer limited liability to their members, protecting their personal assets from any debts or lawsuits by the corporation.

It should then be mentioned that, in the United States, companies are required to pay a tax on profits, 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 with 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 for opening a company in the United States in 2024, taking the most common type of company, namely a Corporation, as an example:

• Choose the state in which to establish the legal entity, as well as the legal and mailing address; 
• Choose the name: Check the availability of the corporation name at the chosen state and make sure 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 papers: file incorporation papers with the office of the secretary of state in the state where you wish to form the corporation. This usually involves payment of a registration fee;
• Obtain an EIN: Apply for an Employer Identification Number (EIN) from 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 tax laws relevant to corporations, including the payment of income taxes;
• Obtain necessary licenses and permits: make sure to obtain all licenses and permits necessary to legally operate in the specific industry in which the corporation operates.

Octagona aims to be your ideal partner, offering comprehensive support every step of the way. Thanks to our extensive experience and expertise in the’export, along with our established presence in the United States, we are committed to accompanying you through every step, ensuring full regulatory compliance and streamlined procedures.