Form
£1,450 £1,850 £2,250

Filing of the incorporation application
Company formation
Official fees
Certificate of incorporation
Company documents
Choice of share capital amount
Registered Agent / Registered Office / Registered office (12 months)
US income tax registration (EIN)
Apostille
Apostille translation
Company type
State
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Types of company in the USA

There are several types of company in the USA (an LLC or a Corp (C-Corp, S Corp), LP), each with different legal characteristics (depending on whether they issue membership interests or shares and whether liability is limited) and different tax treatment.

Legal status

– LLC. Membership interests and limited liability – LLC, LP and LLP

Tax status

– Single-member LLC – files no tax returns of its own; the member reports its income and expenses in their personal tax return

– Multi-member LLC – no tax is paid at company level; instead the tax liability “passes through” to the members (the pass-through taxation principle), although the company does file tax returns

Legal status

– Corp. Shares and limited liability – a Corp. may also be named Inc. or Ltd. – Its advantage is the ability to issue different classes of shares (preference shares for investors, or convertible bonds)

Tax status

– S-Corp – no tax is paid at company level; the tax liability “passes through” to the shareholders (the pass-through taxation principle). Compared with an LLC, shareholders benefit from relief on Medicare / Social Security tax, although this applies only to US residents. Foreign persons who are not US residents are prohibited from becoming shareholders

– C-Corp – double taxation (profits are taxed at company level and then again when dividends are paid to shareholders); the sale of shares is taxed more favourably than the sale of interests in an LLC. Categorising companies is further complicated by the fact that LLCs and Corps can elect their tax status on formation or at the start of each subsequent year, which produces a large number of possible combinations.

It offers limited liability to all partners while being tax-transparent, meaning it is not taxed at entity level.
One type of partner – limited partners – is treated in the same way as members of a multi-member LLC, while the other type – general partners – is treated in the same way as partners in a GP / Partnership

Legal status

– interests without limited liability for the partners – Partnership

Tax status

– no tax is paid at entity level; the tax liability “passes through” to the partners (the pass-through taxation principle), although tax returns are filed

Taxes in the USA

Federal taxes (income tax). Progressive rates from 10% to 35%, with different bands for LLCs and C-Corps. State income taxes (similar to local income taxes). Rates from 0% (Florida) to 10% (New York); some states levy no state income tax at all. Sales tax (a turnover tax, broadly equivalent to VAT). Rates from 0% to 10%; some states have no sales tax. Sales tax usually applies only to services. Franchise fees (official fees, including an annual fee payable to the companies register).

The best states for setting up a company in the USA

The most popular states for forming and running an LLC are New York and Florida, thanks to their low official fees and the speed with which companies are formed and documents processed. Delaware is also a popular choice. If you will be trading or buying property in the USA itself, it is better to form your company in the state where your activities take place.

Anonymity of LLC members and managers

In some US states (e.g. Delaware, New York, Colorado), LLC members and managers enjoy a relatively high degree of anonymity, as they are not recorded in the US companies register. It should be stressed that this applies only to LLCs, and not in every state (Florida, for example, publishes details of LLC managers). If you would like to form an LLC and transfer shares in your company or ownership of property to it, please contact us with your questions via our contact form.

Annual obligations, fees and taxes

Beyond company formation, we offer the further services you will need. For example, the federal tax return (or, for an LLC, the form allocating profits and losses among the members) must be filed by 15 March for a C-Corp and by 15 April for LLCs and individuals.

Form and prices

USA

Company formation, administration and closure
Form and prices

Taxes in the USA are divided into federal and state taxes. In the USA, a company must have an EIN (Employer Identification Number), and an individual an SSN / ITIN. Great emphasis is placed on paying taxes and keeping a “clean” tax record: tax arrears damage the entity’s credit history, with all the negative consequences that follow (such as a visa not being renewed or granted). In Europe, taxes are levied only by the individual EU member states.

Wages may be paid weekly or monthly, or as otherwise agreed in the contract.

In the USA, employee benefits are provided only on a contractual basis.

Working hours are set out in the contract, but are usually 8 hours a day

Statutory paid holiday, as known in the UK and across Europe, does not exist in the USA. The emphasis is on what is agreed in the employment contract.

Medicare tax – an LLC member pays it personally, the employer pays it on behalf of employees, and the company pays it on behalf of Corp shareholders.

Taxes are paid and tax returns filed once a year.

There is no VAT in the USA. Instead, sales tax is payable on services and sometimes on goods (calculated on the revenue from sales to end customers), and income tax is also payable (at both federal and state level).

A foreign national can also be employed by the company, provided they hold the appropriate visa status:E visa – the so-called investor visa – requires at least a 50% interest in the LLC and that the investment is under way, or that the company has already invested the capital contributed to the LLC (the minimum investment depends on the line of business, but in our experience we regard USD 60,000 as the lowest amount)

L1 visa – the so-called investor visa – for managers sent to the USA to set up a US office of a UK company (an LLC or Corp) – based on an employment relationship between the UK company and the seconded manager, or between the UK manager and the LLC after being seconded by the UK company.

The manager must have worked continuously in a managerial position for one year within the three years immediately preceding the application, and must be capable of performing a managerial role – managing staff, with the relevant qualifications and a record of results in running a company (this differs from the definition of an LLC manager under US corporate law)

Yes, a foreign national can be a director of an LLC or a C Corp, but not of an S Corp.

Dividends paid to shareholders who are not US residents are taxed in accordance with the bilateral double taxation treaty between the USA and the shareholder’s country of residence.

The USA distinguishes between federal and state tax, with tax rates divided into bands according to the level of income. In addition, a US company must pay for a tax licence and an annual fee to the companies register.

€1,300 for company formation within 24 hours, including a registered agent and registered office for 12 months and an apostilled extract from the companies register for transferring membership interests or opening a bank account, plus obtaining an EIN.

For a C Corp it makes no difference. For an LLC, however, if visa issues and the possibility of staying, doing business and working in the USA as a foreign national are relevant, certain visa types – notably the E2 and EB5 – require the member of the US company to be an individual holding the interest directly.

An audit is not compulsory; an accountant and tax adviser are sufficient.

The registered office should be where the business is actually carried on, since that is where taxes and the tax licence will have to be paid

US Taxes 2020

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July 25th, 2017|0 Comments

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In the USA, a bill for goods or services is referred to as an invoice. A US invoice should show the issue date (needed to establish the period to which the payment belongs as [...]