Entrepreneurship is booming in the U.S., with 43% of Americans planning to start a business this year. The U.S. is also the top sixth best country for overseas entrepreneurs looking to launch in a different location, Investopedia reveals.

Indeed, if you’re eager to break into new markets and target specialized talent, the U.S. is the ideal country to expand into. However, launching overseas is a challenging feat – you’ll need to take care to choose the right legal structure and location, as well as deal with a host of HR responsibilities.

Choose a legal structure 

Non-citizens can launch two types of businesses in the U.S.: a limited liability company (LLC), or a corporation (C-Corp). Although an S-Corporation is another option, it’s only viable for permanent residents and citizens. Incorporating as an LLC is a particularly smart option for business owners – primarily because it provides you with personal liability protection.

This means if a lawsuit is brought against your business, your own personal assets are protected. And, compared to corporations, LLCs also offer greater flexibility in terms of organization; members or managers can handle day-to-day operations as needed.

There’s also no need for annual shareholder meetings or appointing a board of directors. A C-Corp structure, on the other hand, can be attractive to business owners as it doesn’t require close IRS oversight. However, it does come with double tax – although if you’re smart with your tax planning, you’ll be able to offset most of the double taxation. 

Choose the right location

Although it makes sense to register your business in the state you’ll be operating from, some states offer different financial benefits you may want to take advantage of. Texas, for example, is a beneficial state for LLC formation, and offers one of the best business climates in the country.

In addition to no personal or corporate state income tax, a Texas LLC can also enjoy pass-through taxation, which ultimately helps you avoid costly double taxation. When researching how to create an LLC in Texas, consider using a registered agent service. A reputable service can take care of LLC formation for you, as well as act as your registered agent and receive all official documentation on your business’s behalf. 

Alternatively, Wyoming is a business-friendly state. In addition to not taxing both corporate and personal income, Wyoming also doesn’t impose franchise taxes, either. You can also enjoy low sales rate taxes, while reporting obligations are additionally pretty lax. Moreover, Wyoming also offers business owners a lifetime proxy meaning they can choose someone else to represent their shares or stocks in the company.

As a result, you can remain totally anonymous. Alaska’s another attractive state for LLC formation. Here, there’s no state income or sales tax, and the possibility to claim tax credits (depending on the industry you’re in). However, to be eligible for these credits, you usually have to have a physical business presence in the state.  

Research federal and state employment laws

Once you’ve registered your business in the U.S., you’ll also need to get to grips with federal employment laws, along with state employment laws, which can vary depending on your chosen location.

For example, you’ll need to research policies relating to local and overseas employee recruitment, employee contract requirements and statutory benefits, compensation policies, and unionization laws. It’s therefore essential to be sure the local labor environment gels well with your business ethics and goals before launching your company in any set state.  

Moreover, as an international employer, it’s also important to familiarize yourself with the concept of at-will employment and termination. In the U.S., at-will employment means employers can fire employees at any time without warning, while employees can also quit without notice.

However, variations and exceptions to this arrangement exist in certain states. Also, under U.S. federal law, there’s no mandatory limit for work hours, although a 40-hour work week (involving eight hour work days, five days a week) is standard. If hourly employees work overtime, overtime pay worth 150% of their usual rate must be provided.

Salaried employees, on the other hand, aren’t required to receive overtime pay. Keep in mind, however, that overtime laws can vary from state to state, so you’ll need to check requirements in your location. 

Hiring considerations

You’ll also need to decide whether to hire local employees, or transfer current employees to the U.S. from overseas. Hiring locals can be advantageous as they can provide you with local knowledge, as well as potential connections to suppliers, business partners, and clients. Alternatively, transferring current employees to the U.S. can be time- and cost-effective.

This can allow you to streamline your operations without having to invest as much in training. So, consider how much time and money you’re willing and able to invest to determine the best route for you.

Launching a business in the U.S. can be a lucrative step. By choosing the right legal structure and location, and handling HR responsibilities, you’ll set your business up for long-term success overseas.

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HR Future Staff Writer