So You Want to Start a Business in the United States of America?
I’m about to embark across the “Pond” to present at the IAPA International conference in Manchester, England regarding “Facilitating International Business”. My topic is about starting or expanding a foreign business in the United States of America titled “So, You Want to Start a Business in the USA”.
“Business is a lot like sex…”
Whenever I present to global audiences about entering or expanding their USA business operations, I am reminded of a statement by a high school senior student from South Eugene, Oregon during the final round at a University of Oregon speech tournament where the response to a question about business during a recession; “Business is a lot like sex… When it is good, it is very good. When it is bad, it is still pretty good”. With college students as the judges, this student unanimously won first place.
Business is, as stated; “…is a lot like sex…”
To be a little cavalier, business in America is more “good” than “bad” this is what makes it really good. To the point, any expanding business should consider our U.S. markets as part of any global enterprise as profits derived from within the United States are likely to drive expanded opportunities.
Just the Facts: The United States of America
The United States of America, a Federal Republic of fifty states (50), also includes the District of Columbia, the Commonwealth of Puerto Rico, and fourteen other territories and dependent areas, that include American Samoa, Baker Island, Guam, Howland Island, Jarvis Island, Johnston Atoll, Kingman Reef, Midway Islands, Navassa Island, Palmyra Atoll, Virgin Islands, Wake Island, etc.
States operate with a general autonomy on most industrial matters unless expressed powers have been granted to our federal government. These states rights and associated provisions provide excellent opportunities for businesses as government leaders consider where, how, when, and in what form to operate within the USA. These include internal communications; regulations relating to property, industry, business, and public utilities; the state criminal code; and working conditions within the state. This will become important and apparent later in this article. 1
In 2018, the United States real gross domestic product (GDP) increased at an annual rate of 2.6 percent ($20.50 Trillion) by the fourth quarter of 2018. While this growth rate was higher than many it was lower than the others. Regardless, the sheer size of the USA GDP drives more economic impact that any growth rate measurement can communicate. There is a lot to learn from someone like Robert K. Bratt who has managed a multi-million dollar company.
The second quarter (2019) U.S. GDP was $21.3 Trillion… Meaning the gross domestic product (Personal Consumption Expenditures, Business Investment, Government Spending, and Net Exports) of the United States ran at a rate of $21.3 Trillion a year from January through March 2019. 2
Statistics, numbers, and “trillions”, can easily obstruct clear understanding. Since my presentation will be in the United Kingdom, a basic comparison of the United Kingdom’s GDP to the United States GDP is helpful. The UK equivalent GDP of $2.8T is approximately 13% of the size of the United States. ($2.8 Trillion vs. $21.3 Trillion ) and while GDP is only a single measurement, it is an initial benchmark worthy of review… The GDP Growth reflects the same opportunities; while the United Kingdom struggled in 2018, the United States posted a growth increase of 5.2% or $1.02 Trillion. In another comparison, the state of California’s 2018 GDP was $2.7 Trillion almost equal to the United Kingdom’s $2.8 Trillion GDP. 3
Regardless of the measurement system utilized, the United States’ combination of geographic, economic, and population diversity provides fertile opportunities for enterprises of all types to expand their offerings, serve new customers, and improve their company economics.
Land of Opportunity or a Challenge?
Implications, Complications, and the Minefields of doing business in the United States of America as a Foreign Business
Americans fully appreciate that they live and work in a global marketplace and that the long-term interests of the United States are best served by active participation in the global economy. An important element of that participation is by providing access for foreign companies to United States markets with minimal impediments or hurdles. While competition in the United States is healthy, United States businesses and business communities are receptive to foreign companies entering United States markets. Keep in mind that entering and establishing your business in the United States is the easy part.
The United States is a large country, not only in landmass but in population as well (327 million), providing a target-rich environment for sales and growth. The size and scale of business also present significant challenges to the uninformed and unwary.
With 50 different states, combined with our Republic federal system, means that legal and taxation requirements vary across state borders. Compliance is frequently challenging for first-time foreign businesses entering the U.S. market.
Understanding the requirements of doing business in the U.S. is crucial to any business expansion strategy. Intelligently navigating business complexities is best eased by utilizing local knowledgeable professionals to avoid potential legal or taxation issues. My colleagues and I provide regular expert advice to our inbound businesses and high net worth families. Working together, we successfully navigate regulatory obligations, tax optimization strategies, and start-up matters including employment, registrations, and legal considerations.
What is Your Why
Foremost for any new venture is the careful consideration of selecting the most suitable business entity. Each jurisdiction has unique formation requirements, annual continuation reports, and taxation methods. That is why we at Morris + D’Angelo often ask, “What is Your Why?”
What is your Why incorporates refining your purpose, type of operating entity, where to initially qualify; where to subsequently qualify, and how will you determine success. Additionally, we seek to determine additional motivating factors including:
- Why Now – as in, what makes an opportunity worth exploring relative to either benefit of delaying and/or what reservations existed previously that delayed your decision?
- Why Here – as in, what have you considered relative to why the USA over other expansion Locations (geographies)?
- Why in this Manner – as in, what motivates you to initiate your expansion in the current choice (architecture)?
While the above is certainly incomplete for any specific inquiry, they frame our approach to servicing the entire customer and not simply transactional requests. As I am apt to remind myself and others, “it isn’t what you know that is important, …it’s when you know it”
Morris + D’Angelo serves global family-based entrepreneurs to help them achieve their optimal future. We have offices located in the Silicon Valley and Los Angeles, California, and Portland, Oregon along with a global network of affiliated offices and enterprises, we co-provide local services in New York City, Washington DC, Naples, Florida, Nassau, Bahamas, London, Nicosia, Cyprus, Milan, Italy, Luxembourg, Belgium, Zürich, Switzerland, Willemstad, Curacao, and others.
Ultimately we are in a position to help you and your future business success. We help companies stay compliant with local regulations and filings – and have a proven track record in assisting businesses large and small to establish or invest in the USA with speed, safety, and effective efficiency.
Daniel frequently provides Media Content via Workshops, Podcasts and Printed Articles on topics like Bitcoin and Cryptocurrency, Wealth Preservation and Planning, Global Banking and many other high-level financial topics that serve and demonstrate the Value of our Global Network that should be of interest to those who need Private High-Wealth Services.
If you would like Daniel to speak to you or your Professional Group and bring clarity about the new frontier of the new business tax law changes. Please contact us.
Morris+D’Angelo is the industry leader for many High-Wealth Customers and Organizations.
503.749.6300 – Portland Office
408.292.2892 – San Jose Office