Establishing a corporation in the United States is fast and inexpensive

Establishing a corporation in the United States mitigates the risks of companies seeking to export to and/or sell in the United States

Establishing a corporation in the United States

Establishing a corporation in the United States is far easier than in other countries due to less bureaucracy, lower costs, easier procedures, and, above all, very quick processing times.

We strongly advise all companies that are already working in the United States in a somewhat permanent manner (for example, companies that already have sales representatives, a sales manager, goods stored in US territory, regular customers, and so forth) to establish a corporation (that corresponds to a joint-stock company in most other countries) in the United States.

Establishment of a corporation in the United States allows a company to open a bank account at an American bank, making payments easier as it avoids the need for bank transfers or the appointment of the sales manager as an agent to collect money for the company.

Tax inspections by the US Internal Revenue Service - IRS

More importantly, establishing a corporation in the United States helps a company in avoiding the possibility of the IRS carrying out tax and accounting inspections in the main office in a company's home country. Some countries have bilateral agreements with the United States regarding corporations and taxes which remove the possibility of the IRS asking for documents and bringing declaratory actions against foreign companies working in the United States, and vice versa.

Limiting risks associated with responsibility for damage

Lastly, it is important not to neglect the issue of third-party liability for damage claims in the event of legal proceedings concerning (real or presumed) defects of the product. Such a situation is a very real possibility.

Suppose a company's product selling in the United States is a chemical substance used in the production of a cement or paint. If the end customer brings legal action upon the company for damage caused by this cement or paint, all of the manufacturers supplying the intermediate components used in production are generally also involved.

Thus, even though a company may be sure that its product is completely safe and harmless, there is always the possibility of being involved in legal proceedings that do not directly concern the products exported by your company. The ensuing legal costs (that are generally considerable) and the risk of being ruled to pay for damages are two significant issues companies want to avoid at all costs. The establishment of a corporation in the United States mitigates these risks, shielding the main office in the company's home country from being financially involved.

We advice companies to establish as an incorporation (inc) or as a corporation (corp) in the United States, which is fully equivalent to a "joint-stock company" in other countries.