9 Benefits of Setting Up a US Company as a Foreigner

When it comes to global business, the United States shines as a beacon of opportunity. As a foreign entrepreneur, you might wonder about the advantages of launching and maintaining a business in the US. The truth is, starting a business in the United States offers a myriad of benefits, including the potential to structure a tax-efficient US company. That's why we advocate that the US should be your top choice when considering where to register your company.

In this article, we will delve into the wealth of benefits a US company can provide for your business and why it should be your preferred option when embarking on a new online venture. This article is a part of our comprehensive US LLC for Non-Residents Ultimate Guide. If you're unfamiliar with the differences between an LLC and a Corporation, we recommend you read our guide.

With that introduction, let's explore the advantages a US company offers:

1. Reputation

The United States of America boasts the world's largest economy, and businesses based within its borders are held in high regard. Choosing a US-based company can significantly enhance your business's reputation. If you opt for an offshore company registered in a tax haven like Seychelles or Bermuda Islands, you might encounter difficulties when dealing with European clients. European tax authorities often scrutinize transactions involving offshore companies, causing hesitation and skepticism among clients.

However, by using a US company to issue invoices and conduct financial transactions, you eliminate this issue. Your customers will readily accept your invoices because the USA is not generally perceived as a tax haven. This boost in reputation can lead to greater trust and smoother business operations.

2. Tax Benefits

When considering registering a US company, taxes inevitably become a focal point of concern. The good news is that, contrary to popular belief, it's entirely possible to structure your US company to be tax-efficient in the US, thanks to the versatile LLC structure.

If you've read our article on how to launch a tax-efficient US business with the US LLC structure, you're aware that you can establish a tax-efficient online business through a US LLC. This applies as long as you maintain no physical presence in the US and employ no US-based personnel or agents. These favorable conditions extend to a wide range of services, including copywriting, consulting, software development, dropshipping, and SaaS offerings, among others.

3. Access to the US Market

The US consumer market is renowned as the world's largest and most lucrative. With a staggering GDP of $20 trillion and a population of 325 million people, it boasts the highest household spending globally, accounting for over a quarter of global household consumption.

When you operate a US company, you gain seamless access to this vast and thriving market without intermediaries. Moreover, US consumers tend to prefer doing business with domestic companies over foreign ones. Establishing a US-based presence not only unlocks the potential for significant sales but also instills trust and familiarity among American consumers.

4. Access to US Capital

The United States boasts the most esteemed venture capitalists globally, with a vibrant investment sector that surpasses that of other nations. If you harbor an exciting startup concept, launching your company in the US and approaching US-based investors is a strategic move.

If you choose this path, forming a Delaware C-Corporation is often the most viable option. The majority of angel investors and venture capitalists prefer to invest in Delaware Corporations due to their familiarity with Delaware Corporate Laws. However, it's crucial to bear in mind that opting for a C Corporation structure may offset the tax advantages mentioned earlier. Thus, carefully evaluate your unique circumstances to determine whether forming a corporation or registering an LLC aligns with your goals.

5. Great Banking System

While the American banking system isn't flawless, it offers a host of advantages for entrepreneurs. Banking fees are notably low, and the US dollar stands as a stable currency, accepted virtually worldwide. Furthermore, bank accounts in the US are insured up to $250,000 by the US government, a higher threshold than that of most European and other first-world countries.

US banks also extend a range of perks and bonuses to US credit card holders, far exceeding those offered by banks from other countries. Notably, the ability to buy and sell cryptocurrencies using US dollars via a US Bank Account adds to the allure of the US banking system.

For a more comprehensive understanding of US business bank accounts tailored for foreigners, consult our article on [US Business Bank Accounts for Foreigners].

6. Payment Processors and Credit Facilities

In the USA, you'll find an abundance of payment processing options, including those you're already familiar with. Stripe, Shopify Payments, Paypal, and even high-risk payment processors are readily available for your US LLC.

Stripe, a favored choice among LLCs owned by non-US residents, stands out. With a US LLC and Stripe, launching an online business becomes a reality, even if Stripe is unavailable in your home country. Furthermore, a US-based Stripe account offers the fastest payouts, with funds arriving in just two business days. For those in urgent need of cash, instant payouts are possible, albeit with a minimal 1% processing fee.

These accelerated payout times can significantly improve cash flow for your online business compared to Stripe accounts in other countries, where waiting periods can extend up to 30 days. Additionally, a US-based Stripe account grants you access to Stripe Capital, a division of Stripe that extends loans based on your historical performance. Remarkably, you can qualify for Stripe loans even without a credit history, provided you have a US-registered business and a consistent revenue stream over the past few months.

7. No VATs or GSTs

For online businesses aiming to market their products or services through paid advertising, the United States presents a lucrative proposition. If you choose to advertise with a company registered in Delaware or Wyoming, you'll enjoy the benefit of not having to pay sales tax, VAT, or GST on every advertising dollar spent on platforms like Facebook, Google, or TikTok.

In stark contrast, advertising with an Indian company entails an 18% GST. Opting for a Chinese company incurs a 6% GST, while a Singaporean company demands 7%. If you're not VAT-registered in the UK, advertising with a UK company subjects you to a hefty 23% charge due to the inability to perform a reverse-charge. These variations underscore the significant financial advantage of leveraging a US-based entity for your online advertising efforts.

8. Low Setup and Maintenance Fees

Surprisingly, the United States stands among the select few countries where both initial registration and subsequent maintenance remain remarkably affordable. The process is swift and streamlined, allowing for remote execution without the need for physical presence in the US. Importantly, you can navigate this process without the expenses associated with hiring a lawyer, local director, or corporate secretary, which can be exorbitant in other jurisdictions.

For instance, the filing fee for an LLC in Wyoming is a mere $100, a stark contrast to countries like Italy, where the total fees can easily exceed 2000 euros. Furthermore, dissolving a US business is as straightforward as its formation, with costs sometimes totaling less than $100 in select states.

9. Easy Annual Compliance

Business owners understand that in some countries, annual compliance can be an arduous and costly endeavor. Certain nations mandate extensive annual reporting, with mandatory audits conducted by certified public accountants, regardless of the business's size. Additionally, some jurisdictions require the appointment of a local director, as seen in Singapore, which necessitates substantial annual fees for nominee directors.

However, when you register a US company, simplicity prevails. It can be 100% foreign-owned, eliminating the need for a local director. With a US LLC, your obligations primarily revolve around paying the annual reporting fee, retaining the Registered Agent Service, and filing Form 5472 if you possess no federal tax liabilities.

In the quest for a tax-efficient US LLC structure, our comprehensive guide on [LLC in the US]offers invaluable insights.

Conclusion

We hope that by now, you're convinced of the exceptional advantages that the United States offers to online entrepreneurs and digital nomads. If you believe there's another country that can rival the opportunities we've presented, please feel free to share your thoughts in the comments section. We're eager to engage in discussions regarding the pros and cons.

In summary, the United States emerges as the premier destination for foreign individuals seeking to launch an online business. The country combines low fees, a straightforward process, diverse payment processing alternatives, and abundant access to capital. Most enticingly, it provides a path to achieving complete tax efficiency in your entrepreneurial endeavors.

At Global Offshore Company, we're committed to guiding you through the process of US company formation and international business banking, empowering your global ambitions. Contact our experienced advisors today or explore our USA-Delaware company services . 

Disclaimer: While these guidelines are generally applicable and effective in most scenarios, they are not a one-size-fits-all solution. For highly complex situations, it is advisable to consult a US accountant or attorney well-versed in international taxation.