Open a Branch in USA

Updated on Monday 18th October 2021

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Foreign investors interested in expanding their operations on the American territory can consider opening a branch that can activate through a corporation in USA. Setting up a branch in USA is subject to varied conditions, but for a better understanding of how such business entities can be created in one of the USA’s states, we advise you to talk to your team of company formation specialists in USA. One should consider that each state has its regulations when it comes to the business environment.

What to consider when opening a branch in USA in 2021

From the beginning, we mention that a branch is not a separate legal entity, as it has to report all the operations and profits to the parent company from overseas. If you would like to set up a branch in USA, you must understand the conditions imposed in this sense, and the first one is related to the legal way in which you can activate on the market. A US branch can be set up as a corporation, in complete respect with the applicable legislation related to registration, business, and taxes in the chosen state. The process of incorporation of a branch in 2021 starts with the Business Division of the Secretary of State in which you want to set up the activities. One of our agents can tell you more about the formalities for branches in 2021 in USA.

Filling the required forms and paying the fees are extra requirements after you have submitted the Articles of Association of the parent company. Moreover, these documents must contain information about the new business office in USA and about the registered agent who can be a natural person or another company but observing the condition of having residency in the state where the branch is set. It is good to know that the state of Delaware is a preferred destination for business, as it has a favorable tax system that involves benefits for foreign entrepreneurs. Please bear in mind that if you want to open a branch in USA, the following information must be provided:
  • the name of the owners;
  • the board of managers;
  • the business address. 
Instead of worrying about the incorporation process of a branch in USA, we suggest you address your inquiries in this sense to our company formation agents in USA. We can help you open a company in USA in any chosen state you wish to do business with.

Tax requirements for opening a branch in USA

Even though it is not a preferred business structure in USA, due to the applicable taxation of the company’s profits, branches can be easily set up in 2021. As it is known, such business forms must respect the US legislation in this sense, including the rules and regulations regarding the payment of the federal and state income tax on the worldwide income. As for the dividends of such corporations with establishments in USA, these can be exempt from taxation if the USA has signed a double tax treaty with the foreign country from which the branch comes. Starting a business in USA is subject to fewer requirements and bureaucracy, but it is best to talk to our local advisors in this sense.

Do I need a business plan for a US branch?

Of course, foreign entrepreneurs who want to open a branch in the USA must prepare a business plan in detail. Here is what this document should contain:
  1. A business plan must comprise projects for no more than 5 years.
  2. Company description - Needs to include details about the business, how it differs from the others on the market, and which markets it is heading to.
  3. Executive summary - Contains clear information about the company's profile and its goals in the market. You can also add details about the products you want to sell.
  4. Market research - Every business needs market research, especially if it will develop in a foreign country, as is the case with foreign branches in USA.
  5. Company organization - Information about company management is required.
  6. Product and service information - A business plan must provide detailed information about the products and services to be placed on the market.
  7. Marketing and sales - Marketing and promotion plans can be included in a business plan.

These are some ideas that should be included in a business plan if you want to open a branch in USA. You can receive more information in this direction from our team of local agents who can deal with the registration of your company with the relevant authorities.

Obtain the EIN for a branch in the USA

EIN is the abbreviation for Employer Identification Number or more precisely the identification code for a company with commercial activities on the market. This code shows that the company is registered for taxation. Even a US branch must comply with the charging rules, so do not hesitate to talk to our team and find out what steps to follow in this direction.

Visas for foreign employees

If you are going to hire homeworkers for the US branch, then you need to check the visa formalities. Temporary employment visas are among the types of visas required for foreigners wishing to work in the United States. There are several categories of dream jobs, depending on the type of job accepted. A good part of the formalities come to the attention of the employer, in this case, of the one who opens the US branch. But, for all the details and the necessary support in this direction, we invite you to talk to our specialists. We are here to provide the necessary assistance if you are interested in opening a branch in USA or any other type of business structure.

Advantages of branches in USA

Registering a branch in USA is quite easy, as long as you follow the rules imposed by the authorities. Being an extension of the parent company, the branch can be managed quite simply, without the need to appoint managers or directors. In addition, the registration process is quite fast, and the activities can start immediately. So, if you are interested in a branch in USA, do not hesitate to talk to our company formation agents in USA.

Why invest in the US

Without a doubt, the United States is one of the most appreciated and powerful business destinations in the world. The United States is the strongest economy in the world, closely followed by China, Japan, and Germany. The business possibilities are multiple, anyone can easily open a company, and the statement "land of opportunities" is definitely the first thought when you say USA.

With a skilled and productive workforce, strong support for innovation, well-developed infrastructure and extremely attractive sectors, the USA is the country where you can open any type of business. Foreign investors continue to enjoy advantageous legislation and the opportunity to operate in the market in any area of ​​interest, supported by great incentives and a well-developed tax system. Here are other interesting statistics about the USA:
  1. The USA ranked 6th out of 190 world economies in terms of quality and attributes of the business climate, according to the 2020 Doing Business report.
  2. The UK, Japan, Canada, Germany, and Japan are the main US investors.
  3. According to data for 2020, the total FDI was about USD 10.802 billion.
  4. Most foreign investments are absorbed by sectors such as manufacturing (over 40%), financial and insurance (over 12%), wholesale trade (over 10%).
  5. In 2019, investments from Japan accounted for 15% of total FDI in the US.
  6. With more than 47 double tax treaties signed, the US offers profit protection to eliminate tax evasion and double taxation.
If you would like to know more about how to open a branch in USA, please contact our team of company formation representatives in USA.