U.S Company Formation
Opening a company in the USA
What do we provide?
√ LLC registration in Delaware/Wyoming/California
√ Issuance of an EIN tax number
√ Opening a US bank account
√ Local address for the company for 12 months
√ Submission to the Transparency Registry (BOI report)
Don't settle for less!
How long does it take to open a company in the US?
Time it takes for everyone to open a company in the US: 2-3 weeks.
Time to open a company in the US with Hodorov Law Firm: 24-48 hours and the company in the US is open!
Time it takes for everyone to obtain an EIN tax number from the tax authority: about a month and a half to three months
Time to obtain an EIN tax number from the tax authority with Hodorov Law Firm: only 4 days, and in many cases even less!
Time it takes for everyone to open a bank account in the US: about a month and a half
Time to open a bank account in the US with Khodorov Law Firm: only 24-48 hours! And depending on the banks' willingness to accept the new company as a client.
With Hodorov Law Firm, the entire establishment of a company in the US from start to finish can take only about two weeks. The times, of course, depend on third parties and are based on experience and average.
In order for us to move forward, we will need the following:
- Company name for review: 3 options must be prepared in descending order of priority.
- High-quality passport scan, make sure you see all four edges without cut edges, no focus problems, no shadows, no flash reflections, etc.
- Residential address and physical business address.
We will of course be available to you for any questions, even after that.
Below is an example of a US company that was opened the same day we submitted the application, and an EIN tax number received two days later!
Here is another example, of a company we opened in 1 day, and then issued an EIN in only one more day!
Why register a company in the USA? What are the advantages of opening a company in the USA?
The USA is one of the most advanced countries in the world, the strongest in the world financially, in terms of growth, in terms of banking, and in many other respects. There is no need to sell the advantages of establishing a business in the USA, whether for trading or investment needs.
The local currency is the US dollar (USD), and living is cheap in the country.
What is a limited company?
A limited liability company is a legal entity whose owner does not owe his debts. The company's debts always remain at the company level, and never "ascend" to its shareholders. This is a legal protection.
For example, a limited liability company that purchased a house in the USA, and there was a tree in the yard of the house, and the tree fell on a person and caused him physical damage estimated at a million dollars, then the injured party can only sue the company, since the company owns the property, and not the company's shareholders . This is a legal protection.
From this point of view, setting up an LLC in the US is like insurance - it costs money, you're not sure you'll use it, and it's still better to weigh the cost against the benefit.
What is an LLC in the USA? Establishing an LLC in the USA
Unlike a limited company, establishing an LLC in the USA is a special limited liability company that can only be found in the USA. An LLC has the same legal protection as an LLC, and its main difference is that it is "transparent for tax purposes". You may have heard this term before. The meaning of the term "transparent for tax purposes" is that, in fact, as far as taxes and the IRS are concerned, the existence of the company is ignored In other words, establishing an LLC is important because as far as taxes are concerned (the issue of paying part of the profits to the state), the company does not exist - and the profits and losses are directly associated with the shareholder(s). In this way, it is not taxed at all, and the taxation is done directly on the shareholders - every shareholder and its characteristics. The company's tax is paid in a private tax report of each of the shareholders - according to their relative share, and according to the tax rules that apply to them as an individual. All tax benefits, tax rates, and all the mechanisms of offsetting losses - apply to the shareholders As usual, as if they held the property without a company "in the middle".
In this way, by establishing an LLC you can enjoy "both worlds" - both the legal protection of a limited liability company, and the relevant tax benefits for private individuals.
Purchase of real estate assets for investment in the USA
In the US it is very common to purchase properties in the name of a local limited liability company. This is actually the practice, and it is done for various reasons. One of them is that it will be possible to sell the property easily, by transferring ownership in the company instead of transferring ownership in the property itself. In fact, the most popular way to purchase real estate assets for investment in the US is through the establishment of an LLC.
Another reason is the inheritance tax in the US. In the US, the inheritance tax on a foreign resident is on the value of all assets that are above something around $60,000. Since a limited company never dies, there is no inheritance tax on limited companies. Therefore, if the investor's property is more valuable than $60,000, ownership of the property must be purchased through a limited liability company.
US investment partnerships
For real estate investors in the USA, another reason to establish a limited liability company and through it to purchase real estate in the USA, is the subject of the joint purchase, or partnership in the property.
You take a real estate course in the US, decide to get started, and now it's time for everyone to define their rights in the property, according to the amount of investment that each partner contributed to the partnership for the purpose of purchasing the property.
One way, less accepted, is to write a partnership agreement between the partners, then at the time of purchase to register the rights of each of them directly on the property. This is the form of purchase without an LLC company.
In the second method, a purchase through an LLC company, you briefly write an "Establishment of an LLC" agreement in the USA (its professional name is Operating Agreement), and open the company. Instead of registering the rights of the partners in the property, you register the rights of the partners in the company itself, i.e. what is the relative share of Each is owned by the company itself. The company in turn will be the sole owner (100% ownership) of the new real estate property.
Why is it good? Because if any partner wants to sell his share in the partnership, he will be able to easily sell his share in the company ("his right of ownership", if we like the legal term), without the need to take ownership of the property itself. The property remains fully owned by the company. That is, the sale transaction is carried out "over the head" of the property, and no purchase/sale operation is carried out in the property itself.
Selling the property in the US
Another advantage of a US LLC is that when an LLC owns the property, it can now be sold in two ways, not just one.
The first and well-known way is to sell the property to the buyer.
A second way is to sell the company itself in its entirety to the buyer. The buyer receives the company and everything that belongs to the company - that is, the property.
Startup investments in the USA - INC company in the USA
The Star Up company in the USA is actually a starting point for recruiting investors or making investments in the USA. Anyone interested in this field of activity knows this. The accepted way to register a startup company in the USA is actually an INC company. It is short for incorporated, that is, Ltd. This is the company we know, with directors, shares and shareholders, etc. This type of company can be issued as a public company, compared to the establishment of an LLC that cannot be issued afterwards as a public company. Therefore, opening a company in the USA of the INC type is the company needed to establish a start-up company in the USA.
Anonymity
In such a exposed world where we all have less and less privacy, purchasing real estate in the US through an LLC is another layer of privacy protection. When Yossi Cohen purchases real estate in the US, the property is registered in Yossi Cohen's name. When Yossi Cohen opens an LLC company in the USA called "My First Money LLC" and purchases the real estate through it, the property is registered in the name of My First Money LLC. In some states in the USA, for example in Delaware, there is no obligation to register the identity of the shareholders of the established company, which in practice makes the ownership of the property completely anonymous. Is this important to you? If so, then this is the way.
Opening a company in Delaware
When registering a company in the USA, including establishing a startup company in the USA, or establishing an LLC in the USA, it is required to choose which specific country the company will be established in. For example, it is required to determine whether the company will be established in Florida, California, etc. Delaware is one of the US states "on. Of all the US states, Delaware is considered the most sought-after state to open in. There are a variety of reasons.
After opening a company in Delaware, it is very easy to operate the company remotely. In Delaware most things can be done over the internet. The payment of the annual fee can be done without the need to use a US accountant. This is in contrast to the state of California, for example, where the annual fee is more expensive, and it is also required to pay it after submitting an annual tax report by an accountant.
The set of tools in the state of Delaware for companies registered in it, makes the process of opening a company in Delaware easy, convenient, fast and efficient. Starting a company in Delaware is the ideal thing for many entrepreneurs in the USA.
Disadvantages of starting a company in the USA
The only disadvantages to starting a company in the US are actually the costs of maintaining the company, but these are relatively low costs. They depend on the type of company, the country of establishment, etc. However, it can be said that the differences are not substantial on an annual basis.
The cost of establishing an LLC in the USA or establishing an INC in the USA
Ongoing cost - once a year cost of company address, annual fee, and annual report.
There is a cost of an annual report to the tax authority
These are very low maintenance costs compared to other countries in the world.
Interested in knowing costs? Contact us now free of charge to receive initial legal advice regarding the opening of a limited company, by phone 052-5690866 or by WhatsApp, or by contacting us in "Contact" through the website.
The process of opening a company in the USA
Opening a company in the US is done remotely. You have to choose a company name, the names of the directors, the names of the shareholders, the number of shares and the initial value of each, and so on.
An important decision to make at the beginning of the process is in which country within the USA to open the company. After all, there are 52 countries in the USA, and in each of them it is possible to open a company. Usually opened in the state of Delaware, but only in California, Florida, and more.
In the USA there is no need for a local director or a local shareholder. In the USA you also do not need any American citizenship to open the company. You can open an American company even if you are a foreign citizen. This means that it is possible to open the company with 100% shareholding in the name of a foreign citizen - in your name, or even in the name of a foreign company. The director can be foreign and there is no need for a local director.
The entire process of opening the company is carried out remotely, without the need to fly to the USA.
After submitting the documents properly, the company is opened and the American certificate of incorporation is issued, like this one of a company we opened:
Registration with the Tax Authority - the IRS
The process in the USA is a little different from the other countries in the world. After opening the company, it is necessary to register with the tax authority, before opening the bank account. As part of the registration, the tax authority issues a tax number called an EIN. This tax number is needed to open an account in the US. This is an example we issued:
The amount of time required to issue the EIN varies, and unfortunately for everyone, the amount of time required to issue it is on the way to at least three months, so it is better to submit the request to open the company in advance, and as soon as possible.
The entire registration process with the Tax Authority is carried out remotely, without the need to fly to the USA.
Opening a bank account in the USA - current account for the company
Unlike most other countries, the company can be opened in the USA without the need to open a bank account.
In fact, opening a bank account in the US for the new company is only done at the end of the process, after opening the company and after registration with the Tax Authority.
After all the scandals we encountered in 2010-2018, today it is almost impossible to open a bank account remotely, and it is usually necessary to fly to the US to open the account. However, we have very strong connections in the US and are able to open bank accounts in the US Remotely without the customer having to set foot even once on US soil.
Unlike most other countries, it is possible to open a company in the US without having to open a bank account.
In fact, opening a US bank account for a new company is only done at the end of the process, after the company has been opened and after registration with the Tax Authority.
After all the scandals we encountered in 2010-2018, it is now almost impossible to open a bank account remotely, and usually requires flying to the US to open the account. However, it is possible to open an account with an online bank, where you can open an account in the US remotely without the customer having to set foot even once on US soil.
We can assist you in the process of opening a US bank account for a company, without having to leave the country, and without wasting unnecessary time.
When the company's account is opened in the US, you will receive a username and password and log in to the account via the Internet.
After opening the account, you will receive an account number, and full swift details for depositing from Israel or the US of real estate rentals/sales, etc.
You can order a credit card (debit card), which will be delivered to your home by courier.
In the process of opening a bank account, the opening is carried out through a local authorized signatory on the account. However, only you can perform operations on the account, using a special USB device that connects to your computer.
The entire process takes about a week.
Company maintenance
The company requires annual maintenance of payment of fees, annual submissions, local address (which we will provide for you), as well as submissions to the tax authority.
However, all these costs in the US to maintain the company are low.
US tax
The corporate tax in the US depends on the type of company you open. If you open an INC type company, the tax rate is only 21%, but an additional 7-9% state tax rate is added to it.
If you open an LLC type company, the tax rate is the tax rate of the owner who owns the company as if he made his money without a company. As stated, an LLC in the USA is "transparent for tax purposes", which allows an individual to enjoy any tax benefit granted to him in the USA as an individual. Even if the same individual is a citizen and a foreign resident.
Inheritance tax
In the USA there is an inheritance tax according to which a heavy inheritance tax will be applied to any property that exists in the territory of the USA and that is part of the inheritance of any deceased person who is not a US citizen and is not a "resident for tax purposes" (one who holds a green card). For example, the foreign Yossi was Owner of real estate in the US. Yossi dies for any reason. The real estate is part of Yossi's inheritance. A heavy inheritance tax will apply to the value of the real estate property.
On the other hand, when the property is owned by an LLC, should inheritance tax be imposed in the same way?
This issue is controversial. On the one hand, there are those who argue that since the owner of the company has died and not the company, since a company can never die, no inheritance tax should be imposed on it.
On the other hand, there are those who claim, and rightly so, that the owner of the company has passed away, and the company itself is an asset located within the borders of the United States, and therefore the company should be taxed according to its value - the value of all the assets it owns.
Questions and answers
Question: Is it necessary to physically fly to the USA to open a company in the USA?
Answer: The entire process is carried out remotely and at no point is it necessary to physically come to the USA. There is no need to fly to the USA to open the company, nor the company's bank account. The entire process of opening the company and the company's bank account is carried out remotely without stepping on US soil.
Question: Who provides the local address for the new US company?
Answer: We will provide the local address.
Question: How can I find a good accountant to handle our new US company?
Answer: We will connect you with a local accountant.
Question: If I want to come to the US to open a bank account, what should I do?
Answer: We will try ahead of time to arrange a meeting for you at the branch in order to sign the account opening forms, so that everything will be in order before you arrive, so that you will not just walk around the city in order to find which branch will accept you and open a bank account for your new US company.
Question: What type of company in the US should I open?
Answer: The first type of company in the USA is the INC. This is the limited company with the shares and directors, which is recognized all over the world. Nevertheless, in the US this is precisely the least popular type, and it is used mainly for businesses that are going to be large businesses with a lot of activity, and that require flexibility in appointing and firing directors, and flexibility in changes in shareholders, including issuing shares to the public and turning the company into a public company.
The second type of company in the USA is the LLC. This is a special type of limited liability company. The LLC is a non-existent company for taxation purposes. what does that mean As far as property, ownership, contracts, etc. are concerned, the company exists and has a separate existence from its owner, but in terms of taxation, the company does not exist and the taxation of profits is carried out directly against its owner. For example, if the company is owned by a foreign resident and a local resident, all of the company's profits are taxed 50-50, the local resident according to the tax rates applicable to him, and the foreign resident according to the tax rates applicable to him. This means that there is actually no dividend tax, as there is in INC, which is what makes this type of company the most popular type of company to open in the US.
The disadvantages of an LLC type company are that it is less flexible in terms of managers and shareholders. For example, to bring in a new partner, the consent of all the other partners is required, because the entire partnership statutes must be amended. These disadvantages are not material for small business owners, and for real estate investors, but they are material for investment companies.
Question: Do you need a European passport to open a company in the USA?
Answer: There is no need for an American passport. We can open a company in the USA for any foreign citizen as long as he has a valid passport.
Question: How long does it take to open a company in the USA?
Answer: The process of opening the company takes about a week. However, the process of issuing a tax number from the tax authority can take about 3 months. The process of opening a bank account in the US can take about 2-3 weeks, depending on the readiness of the banks to accept the new company as a customer. Of course, these times depend on third parties, so this is only an estimate.
Question: How much does it cost to open a company in the USA?
Answer: Click here to contact us and get an up-to-date quote for free!