By Sukanya Raman
World Bank report on ease of doing business ranks the US among top ten nations.
The United States of America is the most entrepreneurial country in the world. Many businesses across the globe when thinking of going global choose the US over other countries.
In the same way, Indian start-ups, entrepreneurs, and young businesses are attracted to the US because of the opportunities in the global marketplace, capital investment enhancement, tax benefits, among others.
From Tech startups to Tech giants, manufacturing businesses to retail businesses, automotive businesses to solar energy, businesses of all sizes set up their operations in the US.
The World Bank report on ease of doing business ranks the US among the top ten countries. The US has always been the most preferred destination for many Indian businesses that want to expand globally. One of the key reasons is the ease of doing business in the US, followed by the most business-friendly regulations.
There are certain things to keep in mind if you are planning to expand your Indian business in the US. We shall discuss in detail the guidelines for Indian businesses that want to set up in the US.
Corporate setup: The first and foremost thing is to build your US business on firm foundations by incorporating it right to avoid any structural changes once it is established.
Especially when businesses that are linked to the owner’s visa, where non-compliance could cause immigration issues. The main type of corporations in the US are S-corporation, C-corporation, LLC, LLP. You choose the type of corporation based on your business model.
State of Formation/Incorporation: Typically, businesses incorporate in the state of Delaware since it has established a reputation around the world as the best and most business-friendly state in which to incorporate.
In fact, more than 65 percent of all Fortune 500 companies and more than half of all US publicly-traded companies are incorporated in Delaware, and more startups are incorporating in Delaware every day.
It is important to understand the advantages and drawbacks involved in setting up your business in Delaware. A Delaware incorporation is less complex and has some tax benefits.
READ: Indian American hoteliers contribute $368.4 billion to US GDP (August 11, 2021)
The other significant reason is the state has a corporate court – the Court of Chancery which handles only corporate cases.
However, if you are planning to do business in the state of New York or in the state of California, or anywhere other than Delaware, you shall have to register your Delaware entity in that particular state to do business and get the required business license and permits, if applicable.
Alternatively, you may choose to form or incorporate your company where you actually intend to actively operate. It is important to understand the advantages and drawbacks involved in setting up your business in Delaware or in any other state.
Employer Identification Number: The Employer Identification Number (EIN) is needed to file your business tax returns and to open a corporate bank account in the US.
A request for EIN has to be filed with the Internal Revenue Service (IRS). In general, it takes about a week to get an EIN, however, Covid-19 has significantly affected the ability of the IRS to process requests for EIN.