Step-by-step instructions: how to open a business in the USA for an immigrant

According to the World Bank's Doing Business ranking, the United States of America was ranked sixth out of 190 countries in terms of ease of doing business. Among the main advantages for entrepreneurs in this country are low taxes and many preferential programs from the state that help develop small businesses. MC.today.

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Can immigrants open a business in America, what is needed for this and how much will it cost?

Who can open a business in America

If a person is in the US legally, he can open his own business here. The conditions for launching a company are the same for everyone - for residents and non-residents.

In the US, where the company is located matters. Regardless of the business area - a cafe or a dairy - the amount of taxes will depend on the laws of each individual state.

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The activities of small businesses in America are regulated by a special law. Small businesses in America include companies whose assets do not exceed $5 million and employ no more than 500 people. Profit for the year should not be more than $ 2 million.

How to research the market and choose a business area

Before you sit down for a business plan, you should carefully analyze the market. Namely, to study the habits of American consumers, the financial capabilities of the target audience, interest rates of banks and analyze the activities of competitors. You can do this with the following resources:

• USA.gov Statistics is a section of statistics on the US government website. Here you can see how many companies are currently in a particular area and in which states they are located.
• consumer credit datea is the US Federal Reserve website. Here you can see reports on consumer loans of Americans - they most often take loans based on the season.
• Bureau of Labor Statistics These are statistics from the US Labor Bureau. Here you can find data on the level of employment of the population - depending on gender, age, place of residence, ethnic origin.
• Earnings by Occupation and Education - here they collected statistics on wages in each state, including per hour and week of work.
• Daily Interest Rates - here you can find the interest rates of most American banks and inflation indices. The data is updated every day.
• Money Statistics via Federal Reserve - here you can see rates on loans for small businesses, exchange rates, information about securities.
• Consumer Spending - here you can find out how much the population spends on a particular product or service, look at the dynamics of spending, compare data for individual states and the whole country.

What legal form to choose

Before registering a company, you should decide which company you want to open according to the legal form. In the United States, there are four main forms of legal business organization.

Private entrepreneur (sole proprietorship) is the simplest type of business structure. This option is suitable for service professionals: hairdressers, designers, photographers, accountants. The owner is responsible for his decisions and assumes all risks, including personal property and other assets. Banks are reluctant to provide loans to private businessmen for business development.

Partnership is an association of two or more equal professionals: financiers, lawyers, auditors, programmers. A partnership can be of two types: general - when all its participants are financially responsible with all property and assets, and limited liability - when participants risk only their own contribution to the company, that is, fines do not apply to personal property.

Corporation is a company with a branched structure and many owners: there may even be more than 100 shareholders. The corporation is suitable for any business. It is also easier to attract investments in a corporation than in any other form of business organization. After all, with this form of ownership it is easier to control all costs. Shareholders are only liable for their contribution to the company.

Limited Liability Company - the most common type of small business that is suitable for any type of business: online trading, a store, a hairdresser, a medical institution. It combines elements of corporation and partnership. A limited liability company can have an unlimited number of partners. The founders are only responsible for their investments. But you should study the legislation of the state in which you register a company, because for limited liability companies there are different conditions for doing business in different states.

7 steps to open a company in the USA

1. Check the company name and register the trademark. If a person is caught plagiarizing, he can go to jail and pay a fine. Therefore, the main requirement is this: do not use a name that completely duplicates the name of another company or is similar to it.

Check and register the name for free on the state website. Each state in America has its own website, you need to find the Business Name Availability section on it and fill in the fields in the box: the desired company name, email, etc. After three days, the name will either be registered or denied if it already exists. For example, here you can check the company name for the state of California.

Another name to check and in US Trademark Database website the US Patent and Trademark Office.

Some states have separate naming conventions. For example, one of these words should be added to all names of limited liability companies in the states of Texas and New York: corporation, company, incorporated.

And for example, in the state of Illinois, the names of companies should not contain such words as insurance, assurance, banking, and others.

2. Draw up the charter of the company, if there are more than one owner in the company. This is a document where the percentage of each member of the society, their duties, the scheme for distributing profits or losses, the rules for holding a meeting and voting are prescribed. For example, for a limited liability company, it is called an LLC Operating Agreement. Such a charter is an internal document of the company, it does not need to be certified by a notary and submitted to government agencies. But there are states where they can still ask for it - these are California, Missouri and New York.

3. Select the legal address of the company. The office can be purchased or rented. There is an easier option - to rent a legal address. This is a regular mailbox where official letters will be sent. The cost of renting a box is about $100 per year.

4. Register a company. You can apply online at the state website. Namely, fill in the fields: company name, location, type of business structure, for a corporation - the number and value of shares. Registration is paid, the amount depends on the state - from $80 to $130.

It usually takes 25 business days to register a company. Many sites have an urgent registration for an additional fee: from one to 10 days.

5. Get a federal tax number, or it's called an Employer Identification Number - EIN. Without it, it is impossible to conduct business activities: pay taxes, open bank accounts, hire employees. You can apply for an EIN online at the IRS website. The service is free.

6. Open a company bank account. This should be done in person, they do not provide such a service online. To open an account, you must provide a tax number, company registration certificate, license and company articles of association. Also, a businessman must be ready to prove that he received the money to open a company legally.

7. Obtain a license or permit. Even barbering in many states requires a license. For doing business without licenses, a businessman is fined. Each state has its own licensing requirements. For example, to open a car wash, you only need permission from the city administration, but to start a law office, you need a package of documents. In addition, some licenses and permits have a limited expiration date.

There are two ways to find a list of all licenses and find out their terms:

• On the official website of a particular state.
• On the Online US Department of Business and Economic Development. To find out what licenses and permits you need, select the state in which you intend to do business and the area of ​​business. The system will issue a complete list of documents and addresses of organizations where they can be obtained.

Tax accounting of companies in the USA

The founders of companies must pay three types of taxes in the United States: federal - at the state level, regional - at the state level, and local - at the city level. The federal government does not interfere with the state tax system. Each state has its own tax system, with its own rules and forms of reporting.

Therefore, usually experts advise to create a company in a state where there are no state taxes - then you will only have to pay federal taxes. These states are: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington and Wyoming.

The main types of taxes in the USA:

• Income tax or corporation tax. It is collected from companies according to the financial results of the year. At the federal level, the income tax rate is 21%, and at the state level, the rate varies from 1% to 12%. Some states do not charge income tax. Detailed information about the rates in each state is here.
• Employment tax or social contributions. This tax is calculated at combined rates. It depends on the amount of wages paid. Thus, the social insurance tax rate is 6,2% on the first $132, and the health insurance contribution is 1,45% of the total salary.
• Capital gains tax. Federal capital gains tax rates can be 0%, 15%, or 20% if the assets are held for less than one year. The choice of the rate depends on the marital status of the person filling out the declaration and income for the year. So, for example, single businessmen with an income of up to $40,4 thousand a year pay 0% for this tax. For married businessmen, the rate will also be 0%, but the total income of the spouses should not exceed $80,8 thousand. If a person or spouses earn more - up to $425,8 thousand per year, then the rate will be equal to 15%.
• Excise. The government has introduced various types of excise taxes on certain goods. The rate is not fixed - in each case it is considered separately. For example, a federal excise tax is levied on fuel.
• Sales and consumption tax. The US does not have this tax at the federal level, it is an additional tax in most states. Its rate can be up to 11%.

For more information on taxes, see Online government and the IRS.

Limited liability companies submit an annual information declaration, but do not pay income tax - either at the federal level or at the regional level. At the same time, each partner reports their share of the partnership's profit or loss on their individual tax return. In this case, the founder must pay income tax from 10 to 37%, depending on the amount of income. A non-U.S. resident who owns a limited liability company must file an annual income tax return called 1040NR.

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The declaration of the company's activities is submitted annually, but the founders have the opportunity to independently choose from what moment this year will begin. The countdown will be the date of the first declaration. Most companies choose the tax year to be the same as the calendar year, and you can change the date later.

The United States Internal Revenue Service (IRS) offers a special tax help individuals and legal entities affected by a major natural disaster or emergency.

Important links and organizations to contact about starting a company in the USA:

• Administration small business Here you can find step-by-step instructions on how to open a company, useful links, tips.
• Tax US agency. Here you can find all information about taxation.
• Service US citizenship and immigration. Here you can find all the information about the types of visas and the requirements for obtaining them.
• State department websites New York, California и Texas. They have detailed information about documentation requirements, taxes, titles, etc.

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