Detailed Guide to the Procedure and Cost of Forming a Company in the US in 2024

DETAILED GUIDE TO THE PROCEDURE AND COST OF FORMING A COMPANY IN THE US IN 2024

Forming a company in the US doesn’t just help Vietnamese investors expand into the international market — it also brings many benefits from US government support policies. Before starting, investors are usually interested in the cost of forming a company in the US as well as related procedures. In this article, we’ll take a detailed look at this topic.

Why Should You Form a Company in the US?

The US is one of the world’s leading developed markets, with a diverse business environment and strong business-support policies. For Vietnamese investors, forming a company in the US doesn’t just help expand markets — it also raises brand credibility. In addition, investment policies in the US are appealing, notably not requiring proof of assets or high registered capital. Moreover, the cost of forming a company in the US is fairly reasonable, well suited to small and medium businesses.

Common Business Types in the US

When forming a company in the US, an investor can choose from many business types. Each type has different advantages and disadvantages, suited to specific needs.

1. Corporation:
   • Advantage: Protects shareholders’ personal assets, helping shareholders avoid personal liability for the company’s legal matters.
   • Disadvantage: Must pay tax twice — once for the company and once on personal income.
2. Limited Liability Company (LLC):
   • Advantage: Protects personal assets, simpler procedure than a Corporation, less complex taxation.
   • Disadvantage: Difficulty raising capital since it can’t issue shares.
3. Partnership:
   • Advantage: Simple procedure, just needs an agreement and name registration with local authorities.
   • Disadvantage: Members must bear personal liability for legal matters.
4. Sole Proprietorship:
   • Advantage: Simple procedure, just needs to register the business name.
   • Disadvantage: No personal-liability protection, affecting personal assets in the event of a dispute.

The Cost of Forming a Company in the US

The cost of forming a company in the US ranges from $100 and up, depending on the state and business type. Besides the business registration fee, a business needs to prepare for other costs such as:

• Office rental cost: Office rent in the US depends on location and size.
• Office equipment cost: Includes computers, printers, and other necessary equipment.
• Staffing cost: Includes salary, insurance, and benefits.
• Legal cost: Especially important if the business operates in a specific regulated industry.
• Tax compliance cost: Registering and complying with corporate income tax regulations.

In addition, to maintain the company after formation, a business needs to also consider annual recurring costs such as maintenance fees and tax reporting.

The Procedure for Forming a Company in the US

The process of forming a company in the US includes several important steps:

1. Prepare documentation:
   • Valid personal identification documents.
   • Company bylaws and a list of founding members.
   • The state business-registration application form.
2. File the application:
   • The application is filed through a licensed Agent in the US.
   • Registration fee from $100 and up, depending on the state.
3. Receive the result:
   • The regulatory agency issues a certificate once approved, usually taking 3-5 business days.
4. Complete post-formation procedures:
   • Register a tax ID (EIN) with the IRS.
   • Open a business bank account.
   • Register a business license if needed.

Notes on Maintenance Costs

After formation, beyond the cost of forming a company in the US, a business also needs to pay maintenance costs such as office rent, tax reporting, and the annual Agent service renewal.

Conclusion

Forming a company in the US brings many advantages for Vietnamese businesses, from a dynamic business environment to appealing investment policies. However, investors need to clearly understand the cost of forming a company in the US and the procedures to ensure the process goes smoothly. AWE Legal provides comprehensive support services for forming a company in the US, from document preparation to legal management after formation.

Contact 𝑨𝑾𝑬 𝑳𝒆𝒈𝒂𝒍 today for the fastest and most effective support!