With a population of over 327 million people, the U.S. is the world’s third most populous country. East Coast Americans are very different to West Coast Americans; Northerners very different to Southerners.
It’s therefore not surprising that every entrepreneur looking to tap into this huge market is facing the dilemma of where to launch their business in the US, not least as the cost of running a business varies significantly from state to state. Salary costs and employment-related taxes impact the costs associated with setting up in the US.
Our first tip when deciding where to export to, is that the nature of your company’s business should determine where you choose to locate. For example, most oil and gas companies are based in Texas, most healthcare companies are based in Illinois and Indiana, and the most attractive state for legal services is New York.
The other factors to consider are taxes and incentives for new businesses. For example Wyoming’s business tax climate is conducive to starting a business. The state doesn’t have corporate income tax, individual income tax or gross receipts tax, according to the Tax Foundation.
But where to balance tax incentives with finding the right employees?
California, for example, has high taxes, cost of living, and high cost of starting a business. However, the state is home to some of the most entrepreneurial and startup-friendly cities in the country and it is a very desirable location. Recruiting for the right employees in California should, in theory, be much easier, despite their being limited tax incentives of setting up there. In Nevada, entrepreneurs will enjoy the highest percentage of available employees in the country – but is less commuter-friendly. So how do you balance that in the mix?
Size also matters! For large businesses, Delaware holds many advantages that a smaller business may not find beneficial. Delaware’s business law is one of the most flexible in the country and there is no personal income tax for non-residents. Hence, two-thirds of Fortune 500 companies are incorporated in Delaware.
Most companies in Texas also leverage the advantages that the state has to offer, from limited liability to privacy, including the favourable tax climate.
When setting up in the US, we think you should firstly consider the following;
- Cost: Labour, property, utilities, corporate Tax, incentives. If these are most important, you may wish to consider Kentucky or Virginia
- Quality: Labour skills, labour flexibility, connectivity, infrastructure, risk, quality of life. If these are your priorities, you may wish to set up in Colorado or Washington
- Time: Travel time from the UK, time zones for keeping in touch with staff. New York may be your best option if time is your key priority.
- Location: Of Buyers, partners, demand for their product or service. You will need to research this depending on your product or service.
But we can help take the hassle out of selecting your ideal state to set up in. Our America Made Easy service is designed to make setting up in America hassle and risk-free, with easy in and out options. We’d love to help you too!
For more information or guidance on how to tap into the US,
please contact our team at AmericaMadeEasy@newable.co.uk
or visit us at newable.co.uk/AmericaMadeEasy