Company registration in USA

The United States has a fairly complex and multi-stage tax system. Taxes are paid at the federal, state, and local levels. Each state sets additional tax rates, which are often added to the federal rate.

In the USA, there are three main types of taxation regarding the income of companies: on the principle of "fiscal transparency", like C-Corporation or S-Corporation.

Taxation based on the principle of "fiscal transparency": taxes on the company's income are paid by the founders of the company, and not by the company itself. This is the case for all LLCs unless they elect to be taxed as a Corporation.

In this case, federal personal income tax rates apply.

At the federal level: individual income tax rates are determined on a progressive scale: from 10% to 37%, depending on the amount of annual income.

All rates are applied based on taxable income, not necessarily the actual amount of money earned in a given year. Much depends on whether the tax return is filed alone or with a second family member (spouse/husband). It is also possible to take into account various benefits and deductible expenses.

Statewide: in addition to the federal rate, each state sets its own personal income tax rates.

Taxation by Corporation type

All Corporations and LLCs that choose to be taxed under the Corporation type pay corporate income tax. Again, there are three levels of US taxation to consider.

At the federal level: the corporate income tax rate is 21%.

State taxes:

The United States also has a sales tax. This is an indirect tax, the rates of which are determined at the state level and depend on the specific states where goods are sold or services are provided. Sales tax rates range from 2.9% to 7.25% at the state level. In addition to the state rate, local governments in 35 states charge an additional sales tax ranging from 1% to 5%.

Every company that sells goods and/or services subject to sales tax and exceeds state thresholds must register for sales tax in the state in which it sells goods and/or provides services. Typically, these are economic thresholds, such as annual sales or a number of transactions (for example, more than $100,000 (USD) in sales in a state or more than 200 transactions in a state).

Franchise tax  - a special tax that is levied on a company at the state level where it is registered. The purpose of this tax is to confirm the right of the company to exist as a legal entity and conduct business in the territory of a particular state.

Franchise tax is introduced in 13 states and Washington, DC, and its calculation varies from state to state. The tax rate can be fixed or calculated based on the net worth of the taxpaying company (as a percentage). For example, in Delaware, the minimum franchise tax is $175 and the maximum is $250 000. Payment of franchise tax does not depend on whether the company generates profit.

Absent.

The states have signed about 60 double tax treaties, including with Ukraine.

Under these treaties, residents (not necessarily citizens) of foreign countries are subject to a reduced rate or exemption from US taxes on passive income they receive from US sources. These reduced rates and exemptions vary by country and specific types of income.

If a company registered in the United States pays dividends, interest, or royalties to a foreign owner or partner from a country with which the United States has a treaty, the tax on these payments may be completely exempt or subject to a reduced rate (for example, 5% or 10% instead of the standard 30%). This is especially advantageous for international entrepreneurs who want to legally structure their business and minimize their tax burden without going offshore.

Opening a company in the US is a decision that will definitely bear fruit, but before rushing to register a business in America, it's worth remembering the differences in state laws (Delaware, Wyoming, Florida, and others) and taking into account the specifics of local legislation. Each state has its own advantages and may be beneficial for certain types of activities. To learn how to open a company in the US and what activities are more profitable in a particular state, take advantage of a personal consultation with our specialists.

For more information about each state, follow the links:

• Wyoming Company
• Delaware Company
• California Company
• Florida Company

Campio Group offers full support at all stages of company registration in the United States, ensuring the process is simple, fast, and error-free.

• Selecting a state for incorporation: At this stage, we analyze your goals and suggest the optimal state and company type (LLC or C-Corp).
• Selecting a corporate structure based on your type of activity and business strategy.
• Preparing and submitting registration documents to the state registrar.
• Obtaining an Employer Identification Number (EIN) for the company—a tax identification number required to open a bank account and for tax purposes.
• Opening a corporate bank account in the EU or an account with a payment system. Campio Group assists with selecting a financial institution, document preparation, and communication to ensure the process is as simple as possible.
• Preparing for contracts, licenses, and permits as needed. We develop internal contracts and agreements.
• Accounting and annual financial reporting, including the preparation and filing of annual reports, tax returns, and other required forms.
• Annual legal company renewal and compliance with all state and federal (IRS) requirements.

With Campio Group, you receive full support for opening a company in the US, from registration to annual accounting and legal services. We handle all formalities and compliance, so you can focus on growing your business.