The United States is, for many reasons, an attractive place for any entrepreneur. Some of the benefits that attract a large number of people to the United States include the following:
- The choice is vast: 50 states, all with a variety of rules and regulations. Moreover, there is a heterogeneity of people with different income levels, demographic characteristics, and interests. Therefore, starting a business in the United States offers many opportunities.
- Slightly lower income tax rates than those of European countries.
- Greater financial privacy, since the United States is not required to share your financial data with other countries.
- The creation of an LLC (equivalent to a SARL) and its management outside the United States are simple operations.
Going to the United States
Currently, there is no visa program in the United States that is as interesting as the Portuguese Golden Visa. There is, however, the EB5 program, which for an investment of $900,000 in one of the targeted employment sectors, or elsewhere for an investment of $1.8 million, gives you a Visa.
Without this investment or sponsorship by a family member, only the skilled worker visa option exists.
While it is possible to obtain a tourist visa in the United States for up to six months, it is best for a digital nomad to go with the three-month ESTA visa waiver form. Otherwise, it is possible to be considered subject to tax due to the criteria called the “substantial presence test”. Although the requirements for this test are detailed on the IRS website, in general, if you spend more than 120 days per year on average in the United States, you are at risk of being taxed.
It should be noted that working under a tourist visa is still in the gray area of the law. As long as a worker is not tied to a US employer or the income received is not from the US, he is allowed to work on a tourist visa. However, it is preferable to avoid any mentions of professional activity. This will avoid much confusion for immigration officials.
Business & Taxes in the United States
The steps for developing a business in the United States as a foreigner are relatively simple. All you have to do is create an LLC (Limited Liability Company) which can be considered the equivalent of a Limited Liability Company – SARL in France. This is an operation that can be done online very quickly. An LLC does not provide access to a visa to work in the United States. It is, however, a great way to access the US market. This allows hiring qualified employees and having a US business bank account, all without being based in the United States.
When it comes to registering an LLC as a foreigner, the best states are probably Delaware, Wyoming, New Mexico, or Nevada. These states have slightly better laws for businesses. In addition, deposit fees and annual fees are reduced. Finally, state taxes are low or, in some cases, zero.
Another possibility is the C-corp. The difference lies in how the business and the owner are taxed. With a C-corp, the entrepreneur is double taxed, unlike an LLC which is taxed only once on the profits of the business (note: the taxation of an LLC may vary depending on whether the activity is carried out with US customers or not). In a C-corp, the fact tax on the profits of the company and again when the profits are paid out as dividends. The advantage, however, is that there is no tax to pay on reinvested profits, unlike an LLC. This makes it a more attractive solution for a freelancer who wants to grow a business. It is also easier to gain investor buy-in through the structure of a corporation.
Banking in the United States
Non-residents can open a bank account in the United States, either for business or personal purposes. It should be noted that opening a professional account is easier. For a personal account, most banks require a tax identification number, such as a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN).
Taxes in the United States
The United States is certainly one of the most complex tax jurisdictions in the world. It is one of only two countries in the world where citizens and green card holders must declare and pay taxes on their worldwide income, even if they live abroad.
To make things easier, we’re planning to write an in-depth tax guide for US nomads and ex-pats.
If you’d like to explore your options based on your unique circumstances, Schedule a free consultation with our team today
Disclaimer
Widelia and its affiliates do not provide tax, investment, legal or accounting advice. Material on this page has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, investment, legal or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Please consult https://widelia.com/disclaimer/ for more information.
