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Benefits Of Setting Up a U.S. Company As A Non-Resident

Setting up a U.S company is as rewarding as it is challenging. From a general point of view and being a non-resident, most people are caught up with the complications and lack of knowledge of setting up a business in the U.S. In fact, most people are unaware that it is possible to create a profitable and tax-free company in the U.S. Better yet, you can do it as a non-resident from outside the U.S.


From an entrepreneurial point of view, starting a company in the U.S. paves the way for a lot of opportunities. Such as – receive grooming for creating startups, scaling the company, work with angel investors for getting investment, get bank loans from U.S. banks, and so on. 


All these welcoming facilities make it a viable option for setting up a U.S. company as a non-resident. Also, these facilities make it easy for the U.S. economy to incorporate non-residents and host new businesses. 


And in this article, I will discuss all the benefits of setting up a U.S. company for your business, and why you need to make it your top priority. 


Here are some of the highlighted benefits:

  1. Unbeaten reputation for nurturing and promoting businesses

  2. Globally competitive setup and maintenance cost

  3. Easy entry point for starting a new business

  4. Flexible bank loan sanction and repayment process

  5. Taxation system favourable for businesses

Benefits of Setting Up A U.S. Company

The following benefits will serve you a great motivation to start a business in the U.S.

  1. Tax Benefits

If you have a US LLC, then you do not have to pay the corporate income taxes. Instead, the profits and losses from your company are added with your personal income. Simply put, your personal tax return will depend on your share of the company’s profit or loss. This feature makes it great for non-residents to carry on business without residing in the U.S. because they can operate a business without residing in the U.S.


Additionally, forming a US LLC enables the IRS (The US taxation authority) to view your business operation in the country as a transparent entity and hence, does not impose tax on it. 

The general notion for issuing a US LLC is to engage in a trade or a business in the US, otherwise called the ETBUS. This separates your US company income from your other incomes and also indicates that your income is associated with trade and business, which makes only your US income a subject to taxes.

  1. Access to more than 300 Million Customers

With a 300 million and growing population, the U.S. holds one of the most dynamic markets for growing a company. Even more, the U.S. market is open to new ideas and change, which makes it a favourable ground for creating a business out of a new idea. 


Besides, with a demandable share market, you can choose to announce your company as a publicly traded company and sell shares to a wide range of people.


Lastly, a business in the US is a way for you to access the capital market of the country, such as venture capital, angel investors, public markets, and others. 

  1. Access to the U.S. Capital

If your business is based on a promising idea, then getting access to US capital is one of the easiest routes to create a gigantic company. To start with, you can think of venture capitalists. The US market has some widely known venture capitals (VC) in the world. Alongside, there are also angel investors, and other facilities that fund your company for rapid exponential growth.


Choosing this route is easy, but with a little hard work. In order to attain investment from angel investors, it is better to form a Delaware C-corp, i.e., a corporation rather than forming a US LLC. The reason is – most angel investors and venture capitalists are more interested in investing capital on C-corps as opposed to LLCs. And also, investors are more familiar with the Delaware C-corp laws.

  1. Flawless Banking System

The US has the most powerful and reputed banking system in the world. And what aligns the entrepreneurs with the banking system is – low banking fees, reputed bank jurisdiction, deposit guarantee, etc.


Providing such facilities for startups and other businesses make it possible for the largest banks to operate flawlessly with the biggest companies in the world. Here are some features you get for having a US bank account as a non-resident:

  1. Allows you to use reputed online payment systems in the word like – PayPal, Stripe, Amazon, Google Pay, etc.

  2. The banking jurisdiction is highly secured yet liberal with large transactions, i.e., you do not need to provide credible proof of your transaction in most cases.

  3. To retain the public's confidence in US banks, the FDIC insures your bank deposits up to $250,000 which is more than what you get anywhere else in the world.

  4. With a good credit score, you can avail up to 3 times to 5 times more credit bonuses offered anywhere else in the world including – shopping bonuses, plane fare discount, hotel fare discount, etc.

  1. Fastest Payment Options

The US offers all famous payment systems in the world including – PayPal, Stripe, Google Pay, Amazon Pay, etc.


Especially, if you have a US LLC, you can easily start a business using Stripe as your payment gateway. In this case, you can still operate your business if Stripe is not available in your country.


Besides, the payout is the fastest in the US as opposed to any other country in the world. For example – normally it takes 7 working days to get your Stripe payment in Singapore, and 30 days in Brazil. But, in the US, you can get your money within 1 working day with a 1% fee in case of an emergency.


Lastly, a US based bank account enables you to have access to Stripe Capital – a Stripe based loaning feature that allows users to take loans from Stripe. If you have a good performance history, you can easily avail a sizable amount of loan from Stripe Capital.

  1. Exclusion of VAT and GSTs

For online businesses, it is important to promote your products through online advertising. And this cost of advertising is indispensable and also vital for your business. In the US, if your company is registered in Delaware or Wyoming, you do not have to pay any sales tax, VAT, or GST for online promotion.


However, the situation is very challenging outside the US. As for example – in the UK, you need to pay 23% GST with a UK company, 18% with an Indian company, and 6% with a Chinese company.

  1. Low Setup and Maintenance Costs

In the US, LLCs are very easy to incorporate with your business. There is no need for a lawyer or a third-party service. And so, setup costs are significantly low. For example - in the US, you can have a business LLC organized within a week under $500, whereas in Canada, you require at least $2000 to complete the same formalities.


Besides, there is a competitive industry centring around issuing LLC for business in the US. And so, even if you get it done through a third party, the fees are super affordable.

  1. Easy Annual Compliance

Annual compliance is crucial in some countries, if not most of them. This is because companies often prefer to have their accounts cleared and verified by a professional accountant. In Singapore, you even need a local director for your annual compliance.


However, in the US, the entire annual compliance process is simple. In most cases, if you register a US LCC, you only need to pay attention to THREE things:

  1. Pay the Annual Reporting Fee

  2. Pay the Annual Registered Agent Service

  3. File the Form 5472 (in case of Federal tax liabilities)  

  1. Market Reputation

The US continues to be one of the richest and the most powerful economies of the world. Such impressions make it easy for people to trust a US company as opposed to any company outside the country. This high level of trust gives a lot of leverage. For example – your customer will have no issues if your company decides to deduct the invoices permanently.

Conclusion

Overall, these are some of the main upshot that give all the reasons for which you should think about setting up a U.S. company as a non-resident. In all honesty, these advantages are more startup friendly and are directed towards the healthy growth of a new company. Having said that, I sincerely believe that setting up a company in the US is a good option and also one that you should consider because of the benefits.