Now that you have decided to go forward with the expansion of your business into the U.S. market, the next step in the process is to decide which state will serve as your U.S. headquarters. Choose the best location for your U.S. subsidiary by considering not only state tax laws and regulations, but also geographic location, local culture and the professional community available to advise you in this new venture. Learn how you can use a location to your business’s advantage by looking at the example of setting up a U.S. subsidiary in Miami, Florida.
Example: Setting up a U.S. Subsidiary in Miami
Let's say you want to open a U.S. subsidiary of your Latin American company. Or maybe you have a European or Asian company and want to expand not only into the U.S. market, but also into Latin America.
A good starting point would be to investigate areas of the United States with a significant Latin American population. That could facilitate the kind of professional networking that will help you make the proper contacts. At the same time, you'll want to locate in a state with a friendly business climate — one with lower tax rates and fewer regulations.
In this example, Florida would be a logical choice. For starters, it's one of only seven states with no personal income tax, and it allows you to submit your limited liability company (LLC) filings online. Beyond that, 26% of the population is Hispanic or Latino. In Miami, that figure is 70%. Add the city's direct commercial flights to major Latin hubs such as Mexico City, São Paulo, Rio de Janeiro, Bogotá, Caracas and Lima, as well shipping services to a host of Latin seaports, and it would be hard to imagine a location better than Miami for your U.S. subsidiary. Miami has a thriving network of knowledgeable professionals who are familiar with legal, tax, and other regulatory matters and can advise clients who are expanding into this region.
Just Getting Started
Once you've done your due diligence and chosen the ideal location for your U.S. subsidiary, you'll still have a lot of work to do. First and most important, you'll need local contacts in your professional network to help you navigate the complex process of legally establishing a presence in the United States. Bankers and bookkeepers, accountants and lawyers — you'll need a number of specialists and registered agents to provide guidance on the road to establishing a U.S. subsidiary and ensure you are maximizing all the opportunities available with tax or commercial treaties between the U.S. and your home country.
For starters, you probably will want to go with a subsidiary rather than, say, a branch office, which could expose your entire company to increased liability. You could also use some advice on whether to establish an LLC or a C corporation. In addition, you'll need help setting up a merchant account (if you plan to accept credit card orders), establishing your ecommerce presence (you could engage a 3PL “3rd Party Logistics” provider) and making sure you address all relevant human resources issues (if you plan to hire employees in this country).
The Ideal Location for Your U.S. Subsidiary
Miami provides a great example of how a location can be well-suited for a business with the right state regulations, local population, professional network and geographic proximity.
There's a saying in the United States: "Only three things matter in real estate: location, location, location." Which, of course, means that location is the only thing that matters.
Choosing a U.S. subsidiary also comes down to location, location, location. In this case, however, there really are three separate reasons. You want a location that offers the best combination of proximity to your market, business-friendly regulations and a well-connected network of professional services.
Choose the right location, and your U.S. subsidiary could succeed beyond your wildest expectations.