The United States is one of the largest and most lucrative markets in the world for businesses of all sizes. However, as a non-American, you may wonder if you need to set up a US entity to grow your business in the United States. In this article, we'll explore the benefits and drawbacks of setting up a US entity as a non-American, and whether it's necessary for your business.
Before all that let me introduce myself and clarify that: My name is Ugur, I am not a tax expert, or a notarized representative in any state, I was fortunate enough to have a start-up that helps non-US residents to start and run their companies in the right way, over the last 6 years I worked with thousands of entrepreneurs from 150+ countries, I believe I’m the one who has the highest experience and expertise when it comes to running a business in the US as a non-American.
So let’s get to the topic:
Benefits of Setting up a US Entity
Increased Credibility
Setting up a US entity can increase the credibility of your business in the eyes of potential customers, partners, and investors. A US entity shows that your business is serious about expanding its presence in the United States and is committed to complying with US laws and regulations. When it comes to US clients they would feel better to buy from a US business over a business based elsewhere.
Access to Funding
Setting up a US entity can also provide access to funding opportunities that may not be available to non-US entities. US investors and lenders may be more willing to invest in or lend to a US entity due to its familiarity with US laws and regulations. Delaware C corp is the most common entity type when it comes to raise funds by US VC.
Accessing to US Payment Providers
Stripe, PayPal or Setting up and Amazon Seller account, you may be facing challenges when it comes to sign up to companies above from your home country banking, US entity with tax ID’s is the ultimate solution, especially for the people who’s in third world, developing countries.
Drawbacks of Setting up a US Entity
Increased Costs
Setting up a US entity can be expensive, with costs including legal fees, registration fees, and ongoing compliance costs. Even tho it may seem cheap to begin with couple hundreds to set-up your entity, in the long run there can be unplanned expenses coming up. Non-Americans may also need to hire a US-based attorney or accountant to help navigate the process which costs a lot.
Increased Regulatory Burden
Setting up a US entity also comes with increased regulatory burden, including compliance with federal, state, and local laws and regulations. This can be especially challenging for non-Americans who may not be familiar with US laws and regulations.
Increased Administrative Burden
Finally, setting up a US entity also comes with increased administrative burden, including the need to maintain records, file tax returns, and comply with other regulatory requirements. This can be time-consuming and may divert resources away from other business activities.
Is Setting up a US Entity Necessary for Your Business?
Whether or not setting up a US entity is necessary for your business depends on a variety of factors, including your business goals, market strategy, and resources. Here are a few things to consider when deciding whether to set up a US entity:
- Business Goals: If your business goal is to establish a physical presence in the United States, then setting up a US entity may be necessary. However, if your goal is to simply sell products or services online, then a US entity may not be necessary.
- Market Strategy: If your market strategy involves interactions with US customers or partners, then setting up a US entity may be necessary to establish credibility and facilitate these interactions.
- Resources: Setting up a US entity can be expensive and time-consuming, so it's important to consider whether your business has the resources to manage the increased costs, regulatory burden, and administrative burden that come with a US entity.
Conclusion
Setting up a US entity can provide several benefits for non-Americans looking to grow their business in the United States, including increased credibility, access to funding, and easier access to US markets. However, it also comes with drawbacks, including increased costs, regulatory burden, and administrative burden.
Whether or not setting up a US entity is necessary for your business depends on a variety of factors, including your business goals, market strategy, and resources. By carefully considering these factors.
Where to set-up US entity as a non-US?
If you’re a non-resident since I’m the one who understands you the most, who’s been in your path years ago we have the ultimate US formation solution on theItin.
Without BS simply theitin is:
- By far the most affordable option. (Save over $300 when it’s compared with other cheapest options)
- By far the most comprehensive option with everything needed (You’re covered, the most important tax ID substitute of SSN aka ITIN number is included in the pricing, no surprise costs)
- By far the simplest and the smoothest process. (Don’t deal or be confused with legal steps, everything is as easy as ordering food online.)
- 100% focused on the non-US, helping from scratch until you actually get paid and operational. (After the formation, your US banking, setting payment providers PayPal and Stripe, or selling platform Amazon you get a free guidance and help)
- 100% remote process with only the simple requirement of proper passport scan. (Unlike any others don’t ship any single document to anywhere.)
- TheITIN has helped many Markavo® users - it’s recognized and recommended!
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Best of luck on everyone’s entrepreneurial journey!
