The Ultimate Checklist for Starting a U.S. Company in Days
Editor’s Note: This is a guest post written by Carlos Jimenez, Product Partnership Manager at Firstbase.io.
If you’re an entrepreneur, founder, or freelancer and you want to launch and grow a successful global business, there is no better country on earth to make it happen faster than the U.S.
In addition, the U.S. is also the world’s largest importer and the second-largest exporter of goods.
To improve the odds of success for businesses and people in the United States, Uncle Sam has free trade agreements with several nations, including Australia, South Korea, Israel, and several others, thereby providing access to over 790 million consumers.
Furthermore, Americans also have the highest average household and employee income among OECD member states, meaning more Americans can afford to pay for your products and services than citizens or residents of most other countries.
Here are a few more stats to consider:
- The U.S. offers the largest consumer market on earth with a GDP of $20 trillion and 325 million people.
- It has the largest internal market for goods and services trade. Total trade amounted to $4.2 trillion in 2018.
- Revenue from eCommerce in the U.S. amounted to 431.6 billion U.S dollars in 2020. Statista’s Digital Market Outlook estimates that by 2025, revenue will increase to 563.4 billion dollars
- Of the world’s 500 largest companies, 121 are headquartered in the U.S.
The U.S. Economy Rebounds from the COVID-19 Lull
While the pandemic adversely affected the global economy and hurt businesses in the U.S., the local economy has shown significant resilience and is rebounding faster than expected.
According to this BBC report, the U.S economy grew at an annualized rate of 6.4% in Q1 2021, up from 4.3% in the final three months of 2020.
In addition, the U.S. Federal Reserve expects the American economy to grow 7% this year, supported by nearly $6 trillion in approved stimulus spending and about $2.6 trillion in extra savings by American households built up during the pandemic, according to a report by the Wall Street Journal.
No Better Time to Tap into the U.S. Market Than Now
By launching your business in the U.S., you’ll be able to access the world’s greatest entrepreneurial ecosystems featuring next-generation businesses, working spaces, educational institutions, and extensive financing options and funding mechanisms.
You’ll also be able to leverage legal services, accounting, business mentoring, business development resources, and quality talent.
A U.S. incorporated company means you can also access:
- Low or zero taxes if your business has no U.S.-connected income, that is, you conduct all business activities outside of the U.S. You will only be taxed if you are engaged in trade or business in the U.S. More on this here.
- Venture Capital, especially as most American investors prefer to invest in companies with a U.S. presence.
- Accelerators that provide you with the right support and resources you need to scale your business fast. Most U.S. accelerators require startups to have a local parent company.
- Starting a business in the U.S. makes it easier to obtain a visa or permanent residency. Great for those who want to make America their home.
How to Set up Your Business in the United States
While launching a business in the U.S. is a super-smart decision, the process of incorporating one and getting it off the ground is not particularly an easy task, especially for foreign entrepreneurs.
There are two main stages to incorporating your company in the U.S.:
The incorporation phase consists of the following:
- Deciding a name for your business
- Deciding where you want to incorporate your business in the U.S., Delaware, Wyoming, Nevada, etc.
- Check that your business name is available in the selected U.S. state
- Determining what type of business you want to start: LLC or C-Corp.
- Finding a local registered agent/formation company to help you register the business
- Complete different incorporation forms etc.
After you’re done with this process and your company is successfully registered, you’ll need to:
- Apply for a tax identification number or EIN and wait to get a response from the IRS.
- Open a bank account.
- Pay annual fees and any other required fees.
- Engage a tax consultant and legal advisor to, among other things, make sure you’re compliant with city, county, state, and federal requirements
During this stage, you will be required to submit specific documents which provide clear and necessary information about operations, the board of directors, issuance of stock, and other vital details about your company.
Some of those documents include:
- Certificate of Incorporation
- Stock Certificates
- Indemnity Agreement
- Initial Action by the Board of Directors
- Stock Purchase Agreement
- Stockholder Consent
- Stockholder Consent of Indemnification Agreement
- Technology Assignment Agreement
- Unanimous written consent
It’s crucial to have these documents drafted and safely secured to prevent tax liabilities, civil liabilities, personal liabilities, protect the personal assets of the owners, and generally keep your corporation in good standing with the state of incorporation.
All this costly, time-consuming work can take several weeks, and you still may not get it right.
The good news is you don’t have to do it the hard way.
Firstbase.io to The Rescue
Backed by Y Combinator, Carta Ventures, CEO of TransferWise, and many others, Firstbase.io is the easiest, fastest, and most convenient way to launch a company in the U.S. today and has helped over 10,000 entrepreneurs incorporate and launch their businesses in America.
Entrepreneurs who incorporate their businesses through Firstbase will get the opportunity to access over $40,000 in perks.
If you do not live in the U.S. or are not a citizen, then there’s no need to worry as Firstbase.io has partnered with Payoneer to help you set up a bank account for your business without stepping foot on U.S soil.
To learn more on how to set up your company in the U.S., visit us here.
Carlos Jimenez is a Product Partnership Manager at Firstbase.io. He is passionate about startups, venture capital, SaaS sales, and helping startups get funded in Latin America. Find us on Facebook and LinkedIn.