Forming a US company as a non-resident can be a game-changing move and open the doors to US markets which are one of the most lucrative markets of our time.
With its high return on investment and huge client base, the US has a business-friendly infrastructure that allows new entrepreneurs and investors from the entire globe to enter the US markets.
Non-US residents can bring limited liability, tax optimization, and a wide reputation that will increase their business to the world level.
In this article, let’s explore the 9 benefits of forming a US Company as a non-resident is a worthwhile idea.
1. Access to the U.S. Market
According to reports, the USA has a GDP (growth domestic product) of about $26.7 trillion, which makes up over 24% of the global economy. The USA is one of the largest consumer markets with consumer spending in the US reaching over $18 trillion in one year.
With a strong current domestic demand, it is the best time for the growth of businesses. For example, the people of the US have become used to online shopping with a figure of more than 1 trillion USD in online retailing in the year 2022 and an increase expected for the next few years.
A foreign company that registers as a US entity can acquire warehouses, fulfillment centers, and selling points in the United States which would significantly lower the shipping time and cost for its customers within the US territory.
Moreover, the US has free trade agreements with over 20 countries which makes it easier for businesses that wish to set up in the United States as they will not need to deal with complicated tax and other non-tax barriers.
2. Enhanced Credibility and Brand Image
Entering into new global markets is competitive, and it can be a huge advantage for foreign firms wanting to penetrate these markets that U.S.-based firms have a reputation for being more reliable.
According to Edelman’s Trust Barometer data, 60% of the population around the world is willing to rely on brands that are based in the United States, thanks to their innovations and strict adherence to standards as well as regulations.
Also, a U.S. address listed in brochures or on websites increases clients’ and partners’ confidence in relations since American firms are usually viewed as well-organized and responsible.
For example, Shopify and Zendesk have made significant improvements in brand equity as well as brand credibility after they set up U.S. entities although they are foreign companies. Smaller foreign-owned firms can also gain the same credibility and recognition with U.S. exposure.
3. Ease of Access to Funding and Investment
The USA has been home to the most established and cutthroat Venture Capital (VC) market, owing to the total value of about 70 billion dollars worth of VC funding in the first half of 2023 alone. Over half of these unicorn businesses are American for the most part due to readily available financing and an encouraging environment.
Most Investors back home carry such sentiments and choose to invest in domestic markets because of the ease of regulations, governance, and legal enforcement. However, they get integrated into such an ecosystem by setting up a company in America and this provides them with activities such as incubators, accelerators, and angel investors as well as VC funding and mentoring.
However, both Stripe and Brex, which are American-based financial technology companies as well as funded by American-based capital investors, were able to swiftly expand because they were able to attract American investment.
4. Tax Benefits and Treaty Advantages
Business owners wishing to establish entities in the United States can do so at an affordable rate, owing to various tax advantages in states such as Wyoming, Delaware, and Nevada, and appeal more to foreign-owned LLCs and corporations.
A good case is the case representation of Delaware not having any sales taxes and lower franchise taxes which attracts several companies to the state, around 60% of Fortune 500 firms are placed there. Moreover, the US has tax agreements with more than 60 countries aimed at preventing upstream tax complications and letting foreign businesses receive tax benefits from their countries as well.
In addition, forming an LLC gives the opportunity not to collate more than one level of taxation to the business itself, rather taxation occurs on the individual level of the owners making it lower for non-residents. Business owners from abroad are a good example of employees from high-tax regions and can take advantage of such tax treaties combined with the LLC structures.
5. Intellectual Property Protection
The International Property Rights Index 2024 selected the United States as the leader in the protection of intellectual property. In 2022 alone, a total of more than 374,000 patents were granted by the United States Patent and Trademark Office (USPTO), indicating how valuable IP laws are to the country.
According to US law, businesses that are based in the US can more easily register and enforce their patents, trademarks, and copyrights domestically, and foreign businesses can accomplish this by having a US-based entity. Besides, the US is always a member of WIPO, which makes it possible to file for IP protection in different countries, thus protecting inventions, brands, and other creative works on a worldwide scale.
Companies from abroad with effective technology or branding have much to benefit from these protections as legal actions further provided are effective in deterring infringement.
6. Improved Payment Processing Options
Establishing a company in the United States enables foreign nationals to obtain bank accounts that can integrate into globally used payment methods including Stripe, Square, and PayPal, which has a user base of more than 500 million users worldwide.
Numerous payment gateways require a U.S. business entity to obtain access and this may impede some foreign-owned businesses. Accessing these platforms is easier for foreign entrepreneurs who possess U.S. businesses as their foreign accounts can be set up easily, avoid high currency conversion costs, and speed up transaction time.
As highlighted from a survey conducted by McKinsey & Company in 2023, 60% of consumers prefer to use domestic payment options while making a purchase which reiterates the value of local payment support.
Integrating US payment methods can help in enhancing the level of customer satisfaction and their trust in a brand which helps in providing effective operational processes.
7. Simplified Trade and Logistics
The U.S. logistics market offers combined infrastructure solutions having its worth around $2 trillion in 2023, and direct logistical connections with major shipping channels, as well as a range of well-known logistics partners, including Amazon Fulfillment, FedEx, and UPS.
It is possible for companies opening a U.S. entity to avail themselves of such services which are likely to result in better delivery times for shipments, lesser import duties for target items, and improved options for customs handling.
Take for example the foreign e-commerce companies which use the U.S. fulfillment centers; they can provide 2-day deliveries to American consumers, which is a major marketing ploy today.
According to a McKinsey report, U.S. companies cut business logistics costs by 15-20% relative to costs in other countries, due to useful transportation systems and the low costs of shipping within the country.
8. Potential for Visa Opportunities
Non-residents who own or have a management position in an American Company can apply for a relevant E-2 Investor Visa or an L-1 Intracompany Transfer Visa which will save them time on the management of their business in the US.
There were more than 45,000 E-2 visas issued in 2023 to foreign nationals that invested in US businesses with over 600000 L-1 visas issued for transfer of employees from a foreign company for operations in the US branch.
Such visas grant business owners the legal right to apply their skills in the US and deepen the roots of their businesses in the country. For instance, Japanese company SoftBank was able to permit its senior executives to the US to work with American partners and investors using the L-1 visa.
This is also useful for small businesses where owners seek to manage their company from America and look for potential clients face to face.
9. Limited Liability Protection
Many entrepreneurs prefer to work in LLCs or corporations, since these structures in the United States provide limited liability protection, meaning that trying to recoup outstanding debts or legal cases will not put the owner’s private properties at risk.
This offers some assurance to budding foreign businessmen who would be entering into an entirely new space. As per research conducted by the Small Business Administration (SBA), it was found that more than 80% of the small companies in the USA are in the form of LLCs to avail of the benefits.
International business owners can form an LLC to protect their assets, such as personal savings, real estate, and other investments, from the liabilities of the business.
In other words, if a foreign-owned LLC has outstanding debts or is sued, only the debts of the company, which owns the LLC and its assets, are at risk, not the personal assets of its owners. This type of structure enables reasonable risk management and reduces the chances of any adverse effects on investor confidence which would otherwise deter foreign direct investment into the country.
Easyfiling can Set Up Your US Company
As a conclusion, doing business in the United States as a foreigner has many advantages, including access to a huge market and excellent opportunities to safeguard not only copyright but also one’s private possessions.
Because of these factors, foreign entrepreneurs can establish a U.S. entity with ease, and doing so not only strengthens their reputation but also creates other strategic opportunities that significantly contribute to business growth as well as sustainability Signing up a company in the United States requires partner organizations.
EasyFiling simplifies the process of setting up a U.S. company for foreign entrepreneurs, guiding you through each step, from selecting the right business structure to ensuring compliance with U.S. regulations.
With expert support in managing paperwork, securing registered agent services, and providing resources on tax and funding opportunities, EasyFiling makes it straightforward and hassle-free to establish your U.S. business presence efficiently and with confidence.
Book a free consultation for clear guidance on how to set up a US Company and any other services that you may need.
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Nabin Adhikari
