Do you dream of opening up a business in the USA and living the American dream? A restaurant in New York, a bakery in San Francisco, a ready-to-wear boutique in Los Angeles, a start-up in Miami... Thanks to its international influence, its dynamism and its overall attractiveness, the US is full of opportunities for entrepreneurs from all over the world. Discover how to succeed in creating a new business across the Atlantic.
Why should you start a business in the USA?
Doing business in the USA has multiple advantages for entrepreneurs from all walks of life. Here are some good reasons why you should start a business in the US:
There is a strong entrepreneurial spirit
Resolutely business friendly, the US is THE destination of excellence for entrepreneurship. Whatever your project, the country provides a rich, dynamic, and innovative business environment.
According to a French study, which compared the entrepreneurial ecosystem in 75 cities around the world, there are five American metropolises among the world's top ten cities for entrepreneurship: New York, San Francisco, Los Angeles, Boston and Chicago.
Setting up companies is quick and easy
This may vary depending on the legal status chosen, but in general, setting up a business in the US is relatively simple and quick, even for a non-resident. In addition, in some States, taxation is particularly advantageous for companies.
The market is very large
Setting up in the US gives you access to nearly 329.5 million potential consumers in 50 States, spread over 9.834 million square kilometres. You will benefit from a large network of partners, a qualified workforce, and diverse opportunities in a wide range of high-performance business sectors.
The economy is stable and dynamic
As the world's second largest economy in 2021 after China, the US is a stable, solid and reassuring market for foreign investors. In addition, the dollar is a strong and valued currency worldwide.
A springboard for international development
Given its international reach and cultural diversity, the country also offers you an ideal springboard for global development.
How to go about starting a business in the USA?
Despite these many advantages, starting a business in the USA is still a complex undertaking and there are several painstaking steps you need to follow:
Find out about the local market
Doing business in the US can be very risky if you do not know the local market well. This is why your first step should be to carry out thorough market research on:
- Consumer demand: consumer habits, culture, consumer expectations... Don't forget that the cultural norms and needs of customers in the US will differ to those of customers in your home country. While your idea may be very relevant for the European market, it will not necessarily be so for the North American market!
- The competition and your offer: analyse the offers of direct and indirect competitors in the area you are planning to set up and the market share they occupy. How can you differentiate yourself?
- The local market: what are the new trends in the sector? Innovative concepts? Opportunities to be seized?
- Legal regulations and administrative procedures: is starting a business in the USA favourable for your sector of activity? What are the challenges to be aware of before starting a business?
Define your strategy and choose your location
Once you have completed your market research, you will be able to draw up a business plan and define your economic and commercial strategy for your company.
To do this, you need to take into account the necessary financing, the administrative and legal steps to be taken, the local legislation, the health of the local market, and the communication strategy you need to put in place, etc.
You will also need to carefully target the most suitable city and neighbourhood in which to set up your business.
Choosing your legal status
Another important step before setting up a business in the US is choosing the most suitable legal status for your business. There are about 15 different legal business statuses in the USA. Here are the three best known:
- Sole Proprietorship: this is the equivalent of the auto-entrepreneur status. It is relatively simple to set up and manage and is ideal for owners who are starting their own business.
- Limited Liability Company (LLC): this is very popular and appreciated for its flexibility, ease of setting up and attractive taxation rates. The personal liability of the partners is limited to the amount of their contributions and you may only have to pay income tax (no company tax). It is fiscally transparent and offers a favourable tax rate, with an unlimited number of company members.
- The C-Corporation: this is composed of one or more shareholders whose liability is limited to the amount of their contributions. It is subject to corporate tax.
Choosing the legal status for your business in the US will depend on several criteria such as the type of business activity, your financing capacity, the number of partners, your development prospects, etc., but also on the state where you wish to set up. Indeed, legal forms can vary from one state to another.
You can also choose to set up an American franchise or buy a local company.
Applying for a visa
Obtaining a visa is a prerequisite for setting up a business in the USA. Investors qualify for visas called E visas (the Treaty Trader visa -E1- and the Treaty Investor visa -E2). These visas are intended for investors who wish to buy or create a company on US soil. The E1 and E2 visas are intended for citizens of countries that have signed a trade treaty with the US.
These visas are not immigration visas, but can be renewed indefinitely, provided the business is still profitable. They are issued for five years. For information on the steps you need to take and the conditions you need to meet to benefit from these visas, visit the website of the US embassy in your home country.
Getting support as you set up in the USA
There are many organisations that can help you establish your company in the US and you should also consider contacting the Chamber of Commerce and Industry in your home country.
In addition, you will need to find a chartered accountant and to get advice from a notary or a lawyer specialising in setting up a business in the US.
Finally, if you live in a non-English speaking country or do not speak English perfectly, don't forget you need to find a reliable translation agency that will take care of the translation of the documents you need to set up your business in North America. At Alphatrad, we provide you with specialised and experienced professional translators to carry out the translation of your documents, whatever they may be (legal documents, financial documents, marketing documents, websites, sworn translations for your official documents...), in more than 100 languages.
Which US cities should you consider setting your business up in?
The US offers a plethora of attractive, dynamic and globally oriented cities where you can set up your business, including:
- Los Angeles and San Diego, California
- Seattle
- New York
- Miami, Florida
- Washington DC
- Chicago, Illinois,
- Houston, Texas
- Charlotte, North Carolina...
Choosing a city in which to base your business will of course depend on your personal preferences in terms of where you would like to live etc. You should also take into account the local growth sectors, the local cost of living and the local economy.
You should also look at the local regulations regarding forming a business and local taxation. For example, in some states such as Nevada, Delaware and Florida, corporate taxes are very low.
What are the growth sectors in the US?
There are a wide range of economic sectors in the US, including:
- Biotechnology
- Fintech
- Agri-food industry
- Automobile
- Telecommunications
- Tourism
- Real estate
- Agriculture
- Digital
- Aviation
- Clean energy.
However, the most favourable sectors of activity depend above all on the area in which you are located. You should therefore find out what opportunities are available in the State or city where you want to set up your business.
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Answers to your questions about starting a business in the USA
If you are looking for an idea for a business in the USA, you should be aware that anything to do with Southern Europe is very popular on the American market. Consequently, you should consider importing French, Italian, Spanish… know-how (fashion, wine, luxury goods, gastronomy, culture...). Some of the growing sectors include science, IT, organic products, digital services (e-commerce, artificial intelligence, cybersecurity, etc.), fintech, renewable energy, etc.
To create an LLC in the USA, you will need to:
- Apply for a visa and obtain a US residence address
- Choose a name for your LLC and check that it is available
- Appoint a registered agent (this is a person who acts as an intermediary in case of disputes)
- Prepare the necessary supporting documents, draft the operating agreement and file the documents with the relevant administrative body in the State concerned
- Obtain your EIN (Employer Identification Number)
- Open a bank account with a US bank.
To simplify these procedures, you can use a notary or a law firm.
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