U.S. Entity Complete Formation Video and Mistakes to Avoid

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If you or someone you know is looking to form a U.S. entity for your global e-commerce business, this video will be a big help.

You will want to watch our new video on our process, tools, support, and packages because you will learn what is really involved in the process and the costly mistakes to avoid will be very clear.

If are still selling on Amazon.com FBA or on any e-commerce platform in the U.S. or looking to protect your assets from your home country with a U.S. entity, our U.S. entity formation video will be very helpful.

U.S. Entity Video

Before forming a U.S. entity watch the video on this page.

Here are some of the big reasons you may want to form a U.S. entity:

Perhaps you have been selling in the U.S. and have never collected or remitted sales tax and you are way behind. You are hoping it goes away but you see that is not likely to happen. That is largely due to the June 2018, U.S. Supreme Court Case, Wayfair vs South Dakota. This case has opened the floodgates for other states to require sales tax to be collected even if you have no physical presence.

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12 Questions to Ask BEFORE Forming a U.S. Entity

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These 12 questions below are not only important to ask, but are necessary to get the best answer and support. They apply to all foreign e-commerce sellers looking to establish a U.S. entity. Forming a U.S. company is not as simple as forming a single member LLC with a mail address. There is much more involved. These questions will help keep you on track when working with a U.S. entity provider.

US Company Formation

Ask these 12 questions before forming a U.S. company

  1. Do I Even Need to Form a U.S. Entity as a Foreign Seller?

    This leads to your options to sell in the U.S. as a foreign entity vs the advantages of using a U.S. entity.

  2. How Long will it Take to Form my U.S. Company Correctly?

    You will need to know the factors that will determine the length of time to form your entity, apply for the EIN, establish a bank account, as well as get into compliance with sales tax. Don’t get fooled by “incorporate in 24 hours or less” headlines; these usually lead to costly mistakes.

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U.S. Company Formation FAQs

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When you are forming a U.S. company there are some important FAQs (frequently asked questions) you should be asking before you get started:

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• Which entity is best to operate in the U.S.? Is it an LLC (limited liability company). If so, do you know how it is taxed? There are three options for you if outside the U.S. There are several factors that must be discussed including your gross revenue and net profits, goals with those profits, are partners involved, tax treaty with your country…

• Should you ever consider doing business in your own name? Operating a business as a sole proprietorship in your name is an option, it is low cost and in some situations a good starting point to “test” if your U.S. business will get off the ground. Long term there is too much risk with this business structure and for some industries too much risk even as a starting point.

• Which state is best for your situation (Nevada, Wyoming or Delaware)? What are the factors to consider besides state filing fees or state tax rates? Do you know any court history and which one will offer the best liability protection? Which one has the best U.S. economic benefit to your business?

• What are the U.S. tax rules for a corporation vs an LLC? A C corporation may have lower tax rates but it may not be best for your overall situation. On the other hand, an LLC taxed as a partnership will trigger three U.S. tax returns, which may not be bad overall, but it is something to consider.

• What are the U.S. tax treaties with your home country? Even if there is a tax treaty with your country is there a type of U.S. entity that may not be recognized in your home country?

• With a U.S. company will you need a work VISA?  Planning to come to the U.S. and now you have a U.S. company the key is not to mess up at the U.S. boarders! If you are planning to secure a work VISA in the future do you know which are the best options at the lowest cost?

The goods news is when you work with NCP as a client we will address all these FAQs plus you will have access to our professional resources as needed.

Take the next step to form a U.S. company with NCP and send us an email at support@launchwithconfidence.com or call us at 001-702-367-7373.

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5 Costly Mistakes to Avoid when Establishing a U.S. Company

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 Let me share with you the 5 most common mistakes they’ve made during the process of establishing a U.S. Entity.

  1. Selecting the wrong state for their entity. You may know that the big three are Delaware, Wyoming and Nevada. But what is best for your business from a state tax point of view and overall best liability protection for you as a manager of an LLC or the director or officer of a corporation? Nevada is by far the best and offers the best value. Yes, Wyoming may be $400 less on the front end but with less protection is that worth it? If your U.S. business is raising capital or going public Delaware may not be a bad option.
  2. Selecting the wrong type of entity for their business. If you go online and invest $99 for a formation and guess as an LLC and don’t understand the tax ramification or the U.S. tax treaties with your home country you may end up paying thousands in unnecessary taxes! An LLC may be taxed in four different methods (even most American don’t know that). Each one has its own pluses and minuses. A corporation may be an option only if you manage the taxes on an annual basis and don’t do something that will trigger an audit (like a big year end expense back to your home country to reduce your U.S. profits).
  3. Not having a complete formation. Filing articles, obtaining an EIN and having a U.S. mail address may get you started but by no means is that a complete formation. If that entity was attacked by the IRS or a lawsuit it would not hold up for 15 minutes, according to U.S. attorney, Lee Phillips. You must have a complete formation along a legitimate U.S. business address that sends the proper business message.
  4. Not having tax support for their U.S. entity.  Not taking into consider what type of entity and who should be the owner in the U.S. only means you are going to be disappointed when you realize how much extra taxes you may be paying that was unnecessary. We have had clients who have saved $10K, $20K or $50K or more by working with NCP and our CPA recommendations to operate their U.S. business properly. Some countries like Canada, don’t even have a tax treaty for a U.S. LLC and you may be double taxed. There is a strategy around that but you must know it up front.
  5. Not having working with a company with resources to operate a U.S. business. Never underestimate the power of working with a company like NCP with great resources and connections when it comes to U.S. banking, legal, taxes, merchant accounts, immigration and top business connection to help your U.S. business succeed! Recently with one legal connection we saved a client over $20K in legal fees (from the other U.S. attorney who was going to take advantage of his situation). That type of resource will add up quickly to your bottom line.

Doing business in the U.S. is one of the best opportunities to grow, especially if you are operating online. The U.S. has the largest online consumer market in the world! The key is to develop trust with a legitimate U.S. company.

If you have questions please reach out to us via email at suppport@launchwithconfidence.com to schedule a Skype® consultation.

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U.S. Entity Formation FAQs

by

When you are forming a U.S. company there are some important FAQs (frequently asked questions) you should be asking and here they are for you:

• Which entity is best to operate in the U.S.? Is it an LLC (limited liability company). If so, do you know how it is taxed? There are three options for you if outside the U.S. There are several factors that must be discussed including your gross revenue and net profits, goals with those profits, are partners involved, tax treaty with your country…

• Should you ever consider doing business in your own name? Operating a business as a sole proprietorship in your name is an option, it is low cost and in some situations a good starting point to “test” if your U.S. business will get off the ground. Long term there is too much risk with this business structure and for some industries too much risk even as a starting point.

• Which state is best for your situation (Nevada, Wyoming or Delaware)? What are the factors to consider besides state filing fees or state tax rates? Do you know any court history and which one will offer the best liability protection? Which one has the best U.S. economic benefit to your business?

• What are the U.S. tax rules for a corporation vs an LLC? A C corporation may have lower tax rates but it may not be best for your overall situation. On the other hand, an LLC taxed as a partnership will trigger three U.S. tax returns, which may not be bad overall, but it is something to consider.

• What are the U.S. tax treaties with your home country? Even if there is a tax treaty with your country is there a type of U.S. entity that may not be recognized in your home country?

• With a U.S. company will you need a work VISA?  Planning to come to the U.S. and now you have a U.S. company the key is not to mess up at the U.S. boarders! If you are planning to secure a work VISA in the future do you know which are the best options at the lowest cost?

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