The American limited liability corporation deserves credit for being an incredible innovation. It is a way for people to limit their legal liability. It is also an option available to non-residents who want to do business in the United States. There have been a number of legal changes both in the United States and other nations that have altered the legal landscape. Let’s look at why starting an LLC in the US is a great idea in 2019.
Changing American Regulations
The United States has increased its scrutiny of foreigners doing business in the United States both for tax purposes and out of terrorism concerns. This has made it much harder for foreigners to have private bank accounts in their own names in the United States. These same rules make it much harder to use a private bank account for commercial purposes too.
The solution is to set up an American LLC. Then you can have almost unlimited commercial financial transactions. Furthermore, you’ll be able to open company accounts in just one visit, and you might be able to open American bank accounts entirely remotely. You could use an online incorporation service like Incfile that allows Europeans to easily set up an LLC and set up your business through a single portal. If we take from these glowing Incfile reviews as a fair sample, then the system is user-friendly and provides good customer service when issues arise.
The Privacy Benefits
An individual opening an LLC only has to declare the assets held by the LLC, not their private wealth. Your LLC could control assets like investment real estate or stock. Note that your home country may have restrictions on the type of business you own abroad as well as a limit on the number of owners, however.
A limited liability corporation certainly shields your personal assets from potential lawsuits. One point in favor of an American LLC is that you don’t have to have American board members, though it gives you the ability to seek American investors or borrow from U.S. banks.
The United States has laws that force banks to share all information on customers with the federal government. However, the U.S. doesn’t share information on business accounts with countries that have not entered into the CRS. This means you may be able to maintain privacy regarding financial assets in the U.S. from your own government.
The Business Benefits
It is easier to do business with American firms when you have a U.S. bank or merchant account. Furthermore, they’ll consider an American mailing or office address a point in your favor. Conversely, you could open an LLC in a state that doesn’t require a physical office, though this requirement could be met by having a home-based employee in the state.
There are potential tax benefits when you form an LLC in the United States. An American LLC may not have a “nexus” in the United States. For legal purposes, this means it is a disregarded entity and doesn’t have to pay U.S. taxes. A side benefit of setting up an LLC in the U.S. is that you can choose the state with the lowest taxes or simplest paperwork.
Regulatory changes in 2016 and 2017 caused the number of LLCs set up in the U.S. to plummet. However, things have settled down, and it remains clear that there are many benefits to opening an LLC in the United States.