Why Americans Start Businesses

Setting up a business in the USA: you need to know that

The USA is a very interesting business location for company founders, especially for digital business areas. The United States not only offers the advantage of being close to advantageous business contacts and potential investors, but also represents an ideal market for the relevant products. And: The US bureaucracy keeps the door wide open to foreigners for business start-ups. But if you want to set up a business in the USA, you have to consider a few special features.

Starting a Business in the US: Some Facts

The American economy is often liable to Myth of the unbureaucratic at. In fact, however, the restrictions that exist before starting business activity in the USA are considerable in some respects. Even the famous one American entrepreneurship itself is by no means as strong as its reputation.

A study from January 2015 found that only 42 percent of American adults have the confidence to start a business.

With 44 percent Surprisingly, the German study participants, of all people, came off as more entrepreneurial in this sense. However, appreciated by the Germans surveyed 66 percent found it difficult to start a business, while only 57 percent of the Americans surveyed shared this view.

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The two pairs of numbers may symbolize two statements relevant to the topic: Firstly, it is fundamentally not easy to become a successful entrepreneur; and second are those General conditions for entrepreneurs in the USA are comparatively favorable. To name just a few aspects:

  • The real ones Formation formalities are in most of the United States quick and easy.
  • In many states, the Foundation online possible.
  • A notarial certification of the founding act is not necessary.
  • Minimum formation capital does not have to be presented.
  • Overall, they are Low start-up costs compared to Germany.
  • In some states (e.g. Delaware and Florida) the Corporate taxes extremely cheap.

Corporate Legal Forms in the USA

The decision regarding the legal form of the company to be founded depends on various factors that are of decisive importance:

  • the amount of the capital to be used
  • liability
  • the role of any co-shareholders
  • the impact on the amount of tax burden for the founder

However, the federal structure of the USA enables its states to shape the forms of society in their interests. That's why it is different State company law sometimes considerable in terms of the details. The following is a brief list of the possible types of company:

1. Sole Proprietorship

Sole Proprietorship is similar to that German civil law association (GbR) and is the most common type of business in the United States. Here you are also liable with your personal assets. As a rule, a local name registration or individual registration (license) is sufficient for the establishment, and of course an industry-specific license, if necessary (real estate license, hotel license, etc.).

2. Limited Partnership (LP)

The Limited Partnership is comparable to that German limited partnership (KG). The limited partner pays the subscribed capital into the company and is consequently not personally liable, while the general partner has unlimited liability with his assets.

3. General Partnership (GP)

Unlimited liability also applies in the case of the General Partnership, which the German oHk and GbR resembles. The partners involved are personally liable.

4. Limited Liability Company (LLC, LC)

The Limited Liability Company is, in a sense, one Mixed form of corporation and partnershipwhere liability is limited. In contrast to the German GmbH, which it otherwise resembles, it is no corporation. The shareholders can be taxed as a corporation or as a partnership, accordingly there is corporation tax liability or not. Some states allow one-person LLCs to be formed.

5. Limited Liability Partnership (LLP)

The Limited Liability Partnership is like the Limited Partnership (LP) Partnership and resembles the German limited partnership without general partner. The partners are liable with their assets. The LLP is often chosen as a form by freelancers such as lawyers and tax consultants, and in some states only such professions are reserved.

6. Limited Liability Limited Partnership (LLLP)

The Limited Liability Limited Partnership is one special form of limited partnership (LP), for which the general partner is only liable to a limited extent. In contrast to the LLP, all shareholders can exercise direct management here. The tax treatment is similar to that of the LLP.

7. Corporation (Corp., Inc.)

The corporation stands in a way between the German forms Aktiengesellschaft and GmbH. However, the founders are not obliged to raise their own capital here either. The shareholders are not personally liable. Most large American companies are corporations. Special features of the corporation particularly concern the centralized management structure, the unlimited lifetime and the uncomplicated transferability of business shares.

Which type of company is the most suitable?

Of the company forms mentioned, sole proprietorship is certainly the easiest to implement - more interesting for startups but is usually the Limited Liability Partnershipwhich is also available as a sole proprietorship in many states. In addition to the restriction of personal liability, this is often an attractive option tax benefits, depending on the state. This advantage also sets the LLP apart from the US corporation, whose focus on company shares is likely to be too complex for many founders anyway.

Which type of company actually greatest advantages depends on the specific terms that are offered in each state, given the large role that states play in the American economy. The founder has to decide what these are research beforehand. After all, the USA consists of 50 states.

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No foundation without a visa

The visa that the future entrepreneur needs for his US establishment plays a no less important role than the type of company. You can use Online form uncomplicated travel to the States for 90 daysto start a company there. A suitable visa is required for a longer stay and for the status of company owner in general. American bureaucracy does not allow non-US residents to be foreign owners of American businesses.

Which visa do I need and how do I get it?

This is the starting point for visas for German company founders in the USA US Consulate General in Frankfurt (Main). Here is the application for one Investor Visa E2 to be submitted for the future company owner and, if necessary, specially qualified and managerial employees.

The conditions attached to the issuing of an E2 investor visa reflect the goals of the USA to allow foreign investors to enter the country in order to generate real jobs. As a result, the applicant must prove that he has a invest a considerable amountn is to make a profit in the USA that can not only support himself or his family, but also Create jobs in the states. Exact numbers are not defined by law.

Any form of speculative business is rejected.

That is just as important Conviction of the official in the consulatethat the company has already been founded:

  • Submitting an idea in writing is just as inadequate as providing evidence of amounts of money in accounts.
  • It is recommended, in addition to the detailed business planEvidence of investments made specifically to start a business to be presented (e.g. in software or business cards).
  • Also are Evidence for the business process that is already running bring to.

The Examination of the application happens within two to four weeks. In the event of a generally positive assessment by the responsible officer, the applicant will be invited to an interview. If the founder makes a serious impression during this conversation, the visa will be issued to him and, if applicable, to a spouse and unmarried children under the age of 21.

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Reimund Noll is a freelance online editor and copywriter for www.estaformular.org, an information site about the electronic system for entering the USA.