Company Registration in the USA
Starting a business is a thrilling and rewarding experience, but it can also be daunting and overwhelming. If you’re an Indian entrepreneur with plans to establish a company in the United States, you’ll need to navigate a series of legal and bureaucratic hurdles before you can get your business up and running. Fortunately, the process of company registration in the USA is straightforward, especially if you know the right steps to take. In this blog post, we’ll explore everything you need to know about registering your Indian company in the United States, helping you kickstart your American business dreams.
1. Registering an LLC or C-Corp in the USA from India
Registering an LLC or C-Corp in the USA from India has become significantly easier with the help of Meerad. This process can be commenced and completed online in less than a week, without needing to physically travel to the USA. Indian companies wishing to expand or have a non-resident Indian customer base can benefit immensely from registering in the USA. With advanced infrastructure technology and ample natural resources, the USA ranks as an economic superpower with substantial English-speaking populations. Additionally, it boasts of low corporate taxes and well-established business laws and practices, making it an ideal choice for most Indian companies with global ambitions. With Meerad, business owners can enjoy a range of registration services, including LLC or C-Corporation incorporation, invoicing, banking, and payroll services.
2. Benefits of USA Company registration for Indian businesses
Indian businesses are finding it beneficial to register their companies in the USA. The business environment in India is tough, with many documents, licences and approvals needed to start a business. In contrast, the regulations in the USA are more well-formed, and the corporate income tax rates are lower, making it easier for foreign businesses to establish themselves. Furthermore, every US state has its own set of laws and regulations, with some states like Delaware, Wyoming and Nevada offering a more favourable business environment. Registering a Delaware corporation from India gives access to venture capital firms and less state sales tax and franchise tax.
Beyond these benefits, there are other advantages of registering a company in the USA. The laws and regulations are business-friendly, with low corporate income tax rates and limited liability that protects personal assets from liabilities. Also, shareholders and directors do not need to disclose their names. Finally, the USA is home to a large venture capital industry, averaging $130 billion invested in startups annually, which is essential for business growth. Overall, Indian businesses will benefit from registering their companies in the USA due to the favourable regulations and access to capital.
3. No need to travel to the USA for incorporation
Setting up a company in the USA from India can seem like a daunting task. However, with the right guidance and resources, it can be done with ease. One of the biggest advantages is that there is no need to travel to the USA for incorporation. This means that foreign business owners or citizens of other countries can set up a company in the USA from the comfort of their own country. Choosing the right company structure is crucial, and there are two options available for foreign nationals; LLC and C-Corp. It is important to consider the pros and cons of each structure before making a final decision. Both structures have their own unique benefits, and the choice depends on the specific needs and goals of the business.
One of the major concerns when setting up a company in the USA from India is the cost involved. The cost can vary depending on whether or not there is a partner in the USA with a Social Security number or ITIN. Generally, the cost involves expert guidance, registrations, and other legal requirements. The total cost of starting up a company in the USA from India can be estimated to be around $1200. It is advisable to seek help from experts who can guide and advise on the best approach to take, especially when it comes to choosing the right structure for the business.
When setting up a company in the USA from India, it is important to note that there is no minimum share capital required. This means that foreign business owners can start their businesses with any amount of capital they deem fit. However, keeping a minimum balance in the bank account is always a good practice, especially when it comes to showing seriousness in doing business in the USA. It is important to note that once a bank account is opened, the bank may have requirements for keeping a minimum balance. Some banks, like Mercury, do not have any requirements for keeping a minimum balance, making it a more convenient option for foreign business owners.
4. Process of registering Company in USA
Expanding a business globally can be tremendously profitable, especially in the United States. Indian enterprises looking to enter the American market must undergo the process of Company Registration in USA from India. The process allows business owners to expand their business in the USA, earn more profits with independence and freedom, and generate income from royalties, capital gains, etc. The rules and regulations governing the formation and maintenance of a company vary from state to state. However, there are five major types of companies that can be registered in any state of the USA, namely, LLC, C Corporation, S Corporation, Limited Partnership, and General Partnership.
The biggest benefit of registering a US company from India is the easy access to venture capital firms and startup investors. The US has averaged $130 billion in venture capital invested in startups annually. In contrast, India is on track to see a $30 billion per year capital market by 2025. Indian companies wishing to expand globally should choose the right entity type for business and decide which state to register their company in the USA. Delaware is the most preferred state, as 70% of Fortune 1000 companies and most US tech companies are registered there.
The steps to register a US Company from India include filing to incorporate, obtaining an Employer Identification Number (EIN) from the Internal Revenue Service (IRS), opening a US bank account, and filing annual reports every year. Additionally, business owners need a registered agent with a physical address in the state where they have registered their company in the USA. Business owners can consult with professionals like Capbase to assist in registering a company with minimal paperwork, and they can even incorporate their business in the USA without a headache or a USA business visa.
5. Obtaining name approval for your company in India before registering in the USA
Before registering a company in the USA, Indian businesses must first obtain name approval from the Ministry of Corporate Affairs (MCA). The process takes about 24-48 hours and is necessary to ensure that the proposed name is not identical or similar to an existing company name. Private limited companies in India must end with the words “private limited,” while One Person Companies end with “(OPC) private limited.” LLPs end with LLP, and Section 8 companies can end with words like foundation, association, or institution. Each company name must also include a word that denotes the activity undertaken, such as “financial services” in VERVE Financial Services Private Limited. Obtaining name approval is an essential first step for Indian businesses seeking to expand into the American market.
6. Conducting a trademark search for your brand or logo before registration
When registering a company in the USA from India, it is essential to conduct a trademark search for your brand or logo before registration. This step is crucial to avoid legal trouble and ensure that you are not infringing on the trademark of another company. By being proactive and conducting a thorough search, you can avoid costly lawsuits and create a stronger brand.
Conducting a trademark search can also increase the chances of your application being granted. One of the top reasons for applications being denied is a likelihood of confusion with a similar trademark. This confusion arises when two marks are similar and used for related goods and services, creating the impression that both come from the same source. By identifying similar and potentially confusing marks, you have the chance to choose a different mark before spending hundreds of dollars on non-refundable trademark application fees or investing in branding your company.
The USPTO’s Trademark Electronic Search System (TESS) is a free resource that can be used to search for trademarks. However, trademark searches can be complicated, and it may be advisable to seek help from an attorney to conduct a thorough search. The goal of your search is to uncover marks that are similar to yours and used on related goods and services. It’s crucial to check for alternate spellings, word endings, and phonetic similarity as well.
Marks can be similar without being identical, and it’s possible to have identical registered trademarks as long as the goods and services are unrelated. For example, Delta airlines and Delta faucets have identical trademarks. However, related goods and services are typically sold together, such as coffee and doughnuts. Therefore, when you find a similar mark, it’s essential to check if it’s been registered for a related type of goods or services.
In conclusion, conducting a trademark search before registering your company in the USA from India is a critical step to avoid costly legal battles and create a robust brand. With the help of TESS and an attorney, you can perform a thorough search, which can also increase the chances of your application being granted. Taking a proactive approach to trademark registration is the key to successfully protecting your brand.
7. Choosing the right entity: C-Corporation or LLC
When setting up a company in the USA from India, one of the most important decisions to make is choosing the right entity type. Generally, C-Corporations and Limited Liability Companies (LLCs) are the two structures available to foreign nationals and non-US residents. The C-Corp structure is the preferred option for businesses planning to raise venture funds, while LLCs are more suitable for small businesses.
A C-Corporation is taxed as a separate entity, providing owners with limited liability protection from business debts and liabilities. However, this structure requires more formalized and strict record-keeping and reporting requirements than the more flexible LLC structure. LLCs are not taxed as separate entities, and the income generated passes through to its owners. This structure is often easier to manage, with fewer state-imposed obligations.
When it comes to tax obligations, LLCs provide more options than corporations. While LLC owners may have to report global income in the USA, C-Corp owners report income earned under the corporation, without the need to report other income earned in their country of residence. The choice between C-Corp and LLC will mainly depend on the unique business structure, growth plan and the need for venture funds.
Furthermore, the cost of setting up a company in the USA will largely depend on an expert’s guidance and the type of company structure selected. Experts’ advice typically ranges between $1200 and $5000 or more. Additionally, there is no minimum share capital required to open a company in the USA. However, it is necessary to keep some minimum balance in the bank account to demonstrate commitment to doing business in the US. Banks like Mercury do not require any minimum balance.
In summary, choosing the right entity type when starting a USA company from India is crucial to the growth and success of the entity. Selecting either a C-Corporation or LLC structure will depend on the unique business structure, growth plan and need for venture funds. An expert’s guidance is necessary for making the right decision in company formation, which will also affect the total cost of the registration.
8. Setting up operations in the USA while maintaining headquarters in India
Many Indian entrepreneurs are interested in setting up operations in the United States while maintaining their headquarters in India. This is a smart move, given the numerous benefits that accompany a company registration in the USA. For one, it builds trust among international customers. Additionally, facilitating international payments becomes more accessible when your business is based in the US. But the question remains, can non-residents start their own company in the US? The answer is yes.
To get your business registered in the US, you have several options. You can hire an expert who will handle the registration process and provide legal advice based on your business needs. Alternatively, you can do it yourself but be careful not to make any mistakes as filings errors can land you in trouble. Recently, another option has emerged: incorporation through Stripe Atlas, a payment gateway that helps businesses receive international payments. However, Stripe Atlas only incorporates C-Corps in Delaware.
When deciding which form of entity to choose for your business, limited liability corporations (LLCs) and C-Corporations are two of the most popular options for foreigners. LLCs offer tax benefits, limited liability, and legal protection for your personal assets. They can choose to be taxed as an individual or a corporation, which is often more beneficial to avoid double taxation. C-Corporations, on the other hand, offer venture capitalists preferred stock options. But this may not be the best option if you plan to raise funds from venture capitalists.
9. Friendly states for business incorporation in the USA
When it comes to incorporating a business in the USA from India, choosing the right state can be crucial. Some states have more business-friendly laws and regulations, which can make it easier and more cost-effective to set up and run a company. Delaware, for example, is known for its flexible and streamlined business laws that provide strong protections for shareholders and a low rate of corporate taxation. Wyoming is another state that’s popular among entrepreneurs and investors, offering a favorable tax climate and protections against personal liability. Nevada is also a popular choice, due to its low filing fees and minimum amount of paperwork and disclosure requirements. By choosing a business-friendly state, Indian companies can maximize their chances of success when entering the US market.
10. Steps for forming a USA company from India
Indian entrepreneurs can tap into a massive pool of funds by registering a US company from India. Registering a Delaware corporation provides instant access to venture capital firms and startup investors. It’s crucial to understand the registration process to incorporate a company in the US from India, which involves six primary steps. The first step is to decide on the right entity type suitable for the business, with most investors preferring C corporations. The next step is to choose which state to register the company in, with Delaware being the home of most US tech companies. Consequently, filing the articles of incorporation is the next step, which can be done seamlessly with Capbase. Obtaining an employer identification number (EIN) from the Internal Revenue Service is vital to open a US bank account and pay taxes. Lastly, it’s essential to keep the company compliant by filing reports.
11. Expert assistance for a smooth company incorporation process with Meerad
Meerad offers expert assistance for a seamless company incorporation process in the USA from India. They take care of all the necessary legalities and procedures, ensuring a hassle-free registration process. With their services, businesses can easily and quickly establish themselves in the US market, which is friendly to foreign firms due to its multicultural population and sizable English-speaking population. Moreover, incorporating a company in the US has its advantages, including well-developed company laws and regulations, as well as low corporate income tax rates. Meerad’s assistance includes registration of the company, obtaining the Federal Employer Identification Number (EIN), and providing access to their invoicing and accounting tool – DASH. They offer different types of company registration in the USA, depending on the business activity. With Meerad’s support, businesses can confidently and successfully establish their presence in the US market.
12. Documents required for Company Registration in USA
Documents Required for Company Registration in USA from India:
To register a company in the USA from India, individuals must submit specific documents. Firstly, one must choose the entity type of their business. Investors highly prefer C corporations, so most Indian companies choose this type. Secondly, one must decide which state to register their company in. The vast majority of US tech companies are registered in Delaware, so research must be done before deciding. Thirdly, individuals must file articles of incorporation, which Capbase makes easy. The cost of filing is included in Capbase’s annual flat fee. Fourthly, getting an employer identification number (EIN) for opening a US bank account is required and Capbase will get this done for you. Finally, individuals should keep their company in good standing by filing annual reports every year, and Capbase gives built-in tools to make sure you are always compliant with filing requirements.
13. Advantages of Company Registration in USA
Company registration in the USA is a smart business move, especially for foreign non-residents. One of the advantages of registering your company in the USA market is that the country has a diverse population and is generally welcoming to foreign firms. The US market offers global business opportunities and is open to international business ventures. Additionally, corporate tax rates in the USA are much lower, making it a cost-effective option for business owners.
There are two types of companies that non-residents can register in the USA: Limited Liability Company (LLC) and Corporation. LLCs provide owners with limited liability protection in case of a lawsuit or bankruptcy and are operationally flexible. On the other hand, a corporation is a separate legal entity that provides investors with financial incentives such as tax advantages.
The USA provides strengthened and facilitated access to capital, making it a promising location for businesses. Investors from across the globe are attracted to this technologically advanced nation as it has a well-heeled investor market. Delaware state is considered an ideal location for investors who want to set up a large business and obtain venture capital. Besides, the nation has a strong brand and a robust economy with the largest gross domestic product globally.
Registering a company in the USA offers several advantages, such as corporate tax cuts, ease of setting up a business, and it is generally business-friendly. Failing to register a company in the USA may lead to missed opportunities, loss of profitable business deals, and business assets vulnerability. The USA is a reputable jurisdiction ideal for incorporating a business, and its legal protections are secure, regardless of politics or market fluctuations. Americans generally prefer dealing with American companies, so registering your company in the USA is a smart business decision for foreign non-residents.
14. Disadvantages of Company Registration in USA
When considering company registration in the USA from India, there are a few disadvantages that one should keep in mind. Firstly, the process of registering a company in the USA can be quite complex and time-consuming. Foreign business owners or nationals may face additional hurdles, such as obtaining visas to work in the USA. Additionally, there may be regulatory differences between India and the USA that need to be navigated. Another disadvantage is the cost involved in setting up a company in the USA. This can include legal fees, tax registration fees, and other expenses. In some cases, it may be more cost-effective to register a company in India and operate with a view to expanding to the USA in the future. Ultimately, the decision to register a company in the USA should be made after carefully considering the specific business needs and circumstances.