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Recently, more and more entrepreneurs prefer to conduct business online. Of course, this trend has been significantly influenced by the COVID-19 epidemic, but we have seen many examples of transitioning to remote business management even before the spread of the disease. Examples include increased efficiency and cost-effectiveness of business operations. And for foreigners who do not reside in the USA, remote business management is almost the only opportunity to conduct business in this country. At the same time, the USA market is one of the largest in the world, offering various opportunities, and a company registered in the USA will immediately have a positive impact on the business reputation on the international stage.
Advantages of remote business in the USA:
- Wider selection of employees
Since the business won't be restricted geographically, there will be the opportunity to recruit from around the world. Many talented English-speaking specialists in various fields and price segments can be found if not tied to a specific location. This is especially relevant for businesses in narrower and unconventional fields where the number of specialists is limited.
- Reduction of office maintenance costs and business startup
Remote business management allows for cost reduction by saving on rent payments, utilities, furniture, food, and drinks for employees. Such savings of financial resources are particularly noticeable at the beginning of operations, making it much easier to start a business with lower expenses.
- Faster business growth and development
Due to reduced costs and broader access to specialists, opportunities for rapid growth and development of a new or existing business open up.
- Decrease in employee sick days
Since employees also work remotely, surveys have shown that such employees take sick leave much less frequently, as in nearly 50% of cases of illness, employees can still work from home.
- Improved productivity and efficiency of employees
Recent studies emphasize the importance of employees having proper rest, and the balance between work and life improves employee productivity and results. A ConnectSolutions survey showed that 77% of remote workers demonstrated increased productivity at least several times a month. Reasons for such improvements include greater flexibility, reduction of distracting factors, absence of exhaustion during travel, improvement in sleep quality, and more. As a result, remote work positively impacts overall efficiency and performance.
Special features of organizing a legal entity in the USA with remote management:
- Determine the sphere of activity. When starting a new remote business in America, it is necessary to define the field in which you will operate. Develop a business plan and assess your prospects. It will be most effective to build your remote business around a product or service offering that has its unique feature or advantage distinguishing it from competitors on the market and attracting customer attention.
- Choose a legal address. In the USA, each state has different legislation, so the choice of the company's location directly affects tax benefits, rates, and business conditions. Even if you manage the company remotely, you still need a legal address for registration and opening a bank account. Nowadays, there is a virtual legal address service available. The company will have a physical address in a postal or office center.
- Determine the organizational-legal form of the company and its name. Since there are restrictions on the number of foreign participants in the USA, typically, either a Limited Liability Company (LLC) or a C-Corporation (C-Corp) is registered. These companies have differences that are important to consider when deciding on the company type. For example, an LLC only pays taxes when distributing profits to members, while a C-Corp can issue stock options and shares. In short, small businesses prefer LLC, while C-Corp is more suitable for companies planning to attract a wide range of investors. Regarding the name, you choose a name you like, but it's better to come up with several options because the name must be unique and checked in the registry of the chosen state. If you plan to brand, it's also worth checking for similar trademarks registered by other owners across the USA, as well as the availability of relevant domain names.
- Choose a registered agent and establish communication with them. Businesses in the USA, especially those operating remotely, must have a registered agent. Registered agents are available during business hours to process government correspondence on behalf of your company. Although it's possible for US residents to act as a registered agent, we don't recommend doing so. Primarily, it hinders the goal of working remotely, as you would be required to be available throughout the entire working day at your company's address.
- Register in the chosen state. To do this, you need to prepare articles of incorporation or bylaws, depending on the chosen legal entity form. Then prepare a package of documents, which will depend on the chosen state. For example, in states like New York, Arizona, and Nebraska, it's necessary to publish a notice of company formation in a newspaper. The entire package of documents is submitted to the state secretary's office for company registration. At this stage, your chosen agent will help you, as they will be receiving documents sent by government agencies on behalf of your company.
- Obtain a tax identification number (EIN). Every business requires an EIN (employer identification number), a nine-digit unique number assigned by the IRS (The Internal Revenue Service) that identifies the company for tax purposes. EIN is needed for banking operations, tax declarations, payroll processing, working with suppliers, and much more. You can obtain it directly from the IRS or use our assistance.
- Security and data protection. Nowadays, many protocols exist for protecting confidential information and personal data. Ensuring their protection is especially relevant when conducting remote business in America. It's important to have templates for confidentiality agreements and non-disclosure agreements, as well as agreements regarding the provision, collection, and processing of information. Additionally, you should take care of technical information protection tools that will be used by customers and partners.
Tips for starting a remote business in the USA:
Starting a remote business in the USA can be very promising due to process optimization, cost reduction, and other advantages gained by the company through remote management. However, as with any endeavor, it's important to approach this matter responsibly and comprehensively. Determine the field in which you intend to register your business, involve specialists who can advise on taxes and the specifics of legislation in different states, verify the name, trademarks, and domain name in line with your brand strategy in advance, choose a reliable registered agent, and ensure data protection and confidentiality on internet platforms. All of this will allow you to successfully start and develop a remote business in the USA. Therefore, if you're interested in how to conduct business remotely in the USA, contact our lawyers, and we'll help organize all processes from start to finish.
