Starting a business in the USA

The promise of the American dream has appealed to entrepreneurial expats for years. A country which praises and rewards risk taking, entrepreneurship is at the heart of the US economy. Corporation tax, employment legislation, bankruptcy law – it’s all geared toward making starting a business in this country as appealing as possible. So if you’re thinking of moving to the USA to start a business, here’s what you need to know.
According to the expat survey, almost one third of American expats are entrepreneurs. This is hardly surprising when American culture so readily encourages risk taking and entrepreneurialism. In Europe, having a previous failed business serves as a sort of ‘black mark’ against your name, making borrowing money for your next venture difficult. In the USA, though, this is almost seen as a positive – a learning experience that makes the probability of success more likely.
On top of this, personal liability levels are far lower in the USA than Europe, reducing the risk for would-be entrepreneurs. There are also fewer regulations governing smaller businesses. These factors, combined with a large market of wealthy English speaking people, makes moving to the USA to start a business a tempting prospect for UK expats.
The two visa categories most likely to be relevant to expat entrepreneurs are the L-1A and E-2 categories.
The L-1A visa is for those expats who already have an established business elsewhere and are looking to extend their operations into the US. It’s also the visa used when companies want to relocate a senior executive to America. To qualify, your business needs to have been trading for at least 12 months and employ four or more people. You’ll also be required to provide a detailed business plan outlining plans for growth and have a pre-arranged space for your new office headquarters.
For expats who don’t already have a business, or have a business either with fewer than 4 employees or that has been operating for less than 12 months, the E-2 visa is an option. This visa category initially lasts for two years but can be extended in further two year increments for as long as your business is operating. Both the E-2 and L-1A visa holders are allowed to bring their spouse and children (aged under 21) with them.
Incorporating your business
An additional question to ask when starting a business in the USA is which state to incorporate the business in.
Business owners are not required to incorporate their new enterprise in the state it operates in. Instead, you have your choice of any of the 50 states or the District of Columbia. Incorporating your business locally is likely to be the least expensive option but there are numerous advantages to incorporating your business elsewhere. Delaware is the most popular choice for incorporations as the state tax laws favour companies that are not doing business in the state. Delaware is also recognised to have favourable laws governing corporations and a clear and consistent legal system.
If you are considering moving to the United States of America from London to start a business or simply to start a new life abroad, Cadogan Tate are here to provide help and advice every step of the way. From your initial enquiry to unpacking at your new home, our specialist international removals services from London ensure every detail is attended to with the utmost care and consideration.
Information correct at time of publication.