Setting up a company in the United States from India: how to get started?

 

The United States has always attracted entrepreneurs around the world, who see it as a particularly favorable environment for entrepreneurship. The spirit of creation and conquest of new markets so characteristic of the United States encourages these entrepreneurs to attempt the adventure of creating a business on American soil. With more than 320k inhabitants, the development prospects for companies are immense.

Entrepreneurs who have embarked on it continually praise the administrative flexibility and business opportunities offered by this country compared to other countries like India, although the situation is continuously improving.

However, while launching a business in the United States may seem easy, it is essential to be well prepared so that you do not experience failure.

If you also want to immigrate to Uncle Sam's country to set up your business there or simply to test the marketing of your products and / or services in this market, we suggest that you read the following tips.

DEFINE YOUR IMPLEMENTATION STRATEGY

If you want to be successful in your establishment in the USA , you must of course start by developing your business plan  and  studying your market in order to develop a strategy that is adapted to it. It is the very basis of the business creation process . Carrying out  a good market study is an essential prerequisite for understanding the functioning and the state of the market, as well as the competition.

Then, it should be noted that getting started in the USA can be done in several ways: getting started without creating a company in the USA (via a simple website in English for example), getting started without creating a company in the USA but by using the services of an on-site representative able to interact with local customers and suppliers on your behalf or to get started by setting up your company on site .

There are therefore several ways for an entrepreneur to consider setting up in the United States. To advise you on the appropriate strategy, the lawyer or "lawyer" specialized in business law and present on American soil is often the privileged interlocutor. This role will be to advise you on the best implementation strategy and to draft all the appropriate legal documentation for your company, whether it is your articles of association or your commercial contracts in order to guide you through the various constraints. legal and regulatory frameworks that govern your activity at federal and state level.

GET A WORK VISA  

To immigrate to the United States and set up your business there , you will need to obtain a visa. In matters of immigration, American legislation provides for a multitude of work visas to which a foreign worker can apply: E-1 visas ("Commercial trade" visa), E-2 ("investor" visa), L-1 (“intra-group transfer” visa) or even H-1B ( temporary work visa for specialized workers) . Each of them corresponds to a specific situation and has specific criteria to be met in order to be awarded.

For foreigners wishing to start a business in the United States , applying for the E-1 and E-2 visas can be a good option, although these visas are more expensive than the L-1 visa. For example, applying for the E-2 visa requires the applicant to invest or be about to invest a "sufficient" amount in a business in the United States . It is the Department of State and Immigration Services  that will determine, based on the nature of the activity undertaken, whether the investment is "sufficient".

The financial brake that obtaining an E-1 or E-2 visa can constitute is pushing a growing number of foreign entrepreneurs to apply for the L-1 visa. This visa is intended in particular for foreign companies wishing to settle in the United States by opening new premises on American soil. This visa is renewable each year for a maximum period of 5 to 7 years depending on the case. After this time, the visa holder will have to leave the United States for at least one year before reapplying for a new visa.

Let's be clear, the conditions for obtaining a visa are complex and must respect a strict formalism, which is why it is strongly recommended to be accompanied by a specialized lawyer to maximize the chances of success in obtaining the visa.

CREATE A BUSINESS IN THE USA

There are four predominant social forms in the United States for companies:

 The Sole Proprietorship

It is the social form adapted to a self-employed person or an independent worker. Its advantage is that it offers a certain flexibility to the entrepreneur who is not obliged to register as a company . However, in order to carry out certain regulated activities at federal and / or state level, he must have a certain authorization. Also, the income of the company and that of the owner are the same. Taxation is therefore made on this same income. This is its real drawback.

 The Partnership

We choose this corporate form as soon as there are at least two owners to operate the business . With such a status, for all actions of the company, each owner is responsible for his own funds. Here, registration is required. There are two forms of Partnership: the General Partnership in which the company is divided equally and the Limited Partnership allowing the control and liability of specified partners to be restricted.

The Corporation

The Corporation is an appropriate form of corporation when you go for share ownership . As soon as you manage to have shareholders, you can choose this corporate form. Whether in terms of responsibilities or tax, such a business is separate from its owners. It is only the company that is legally responsible for its actions and debts. And this is the advantage for the owners. On the other hand, the company can be taxable twice; when it declares a profit, and when it distributes dividends. The Corporation exists in two traditional forms: the C Corp and the S Corp. Generally speaking, foreigners cannot be shareholders of an S Corp. The available form is therefore the C Corp, unless the foreign shareholder has a permanent resident visa.

 LLC (Limited Liability Company)

It is a hybrid form of partnership between Partnership and the Corporation. Its advantage is that it benefits on the one hand from the fiscal efficiency and operational flexibility of the Partnership, and on the other hand, from the limited liability of the Corporation. The "Members" of the LLC may be, depending on the different states, individuals, Corporations, single members (single member LLC), or even other LLCs.

It should also be taken into account that to develop your Business Setup in USA from India, you do not have to settle physically. You are given the opportunity to position yourself with an on-site representative or even with a simple website respecting American standards.

ANTICIPATE LABOR LAW ISSUES

Labor law in the United States is quite restrictive and requires serious consideration in order not to miss an obligation for your company. Indeed, the creation of a company on American soil and the hiring of local employees involve making a series of registrations with the tax administration and state and federal agencies and taking out several insurance policies. mandatory.

Each state has its own specificities in terms of labor law , so it is more than advisable to seek the services of a specialized lawyer to assist you.

PROTECT YOUR BUSINESS RELATIONSHIPS

In India, two partners who wish to establish a commercial contract to frame their labor relations must comply with the provisions of the Civil Code and the Commercial Code to draft this contract. The law therefore imposes certain rules that a contract cannot infringe on pain of nullity. On the other hand, in the USA the situation is somewhat different since American law is essentially unwritten law which is based on the different cases of jurisprudence of the courts of each state. In the event of a conflict between commercial partners , the way in which the contract was drawn up will be decisive in deciding which partner is at fault. This is one of the reasons why the Contracts subject to American law are generally much longer than contracts subject to Indian law, since it is necessary to provide for all possible scenarios.

As two commercial partners are free to include the clauses they wish in the commercial contract that binds them, it is essential to have their commercial contracts drawn up by a competent lawyer so as not to place all the responsibility on your company in the event of litigation. This reflection is valid for all commercial documentation: contract for the provision of services , partnership contract, general conditions of sale or use, etc.

Read also: The guide to investing: our advice

ONE LAST TIP

While it may seem very easy to start a business in the United States, especially compared to India, it is important to prepare for it upstream and obtain the advice adapted to your situation. A successful establishment on US soil will greatly simplify the launch of your business and increase your chances of success. The faster your administrative implementation procedures will be carried out, the faster you will be able to concentrate on your business. Contrary to popular misconception, launching a business in the US is not necessarily costly as long as it is addressed to qualified interlocutors such as a lawyer specializing in business law in the United States.