Starting a Company in the United States
Quick answer
The United States commonly suits venture-backed startups raising US institutional capital and SaaS companies whose primary customers are US-based. The central choice is an LLC versus a Delaware C-corporation, the federal corporate rate is a flat 21%, and there is no federal VAT. The main operational realities are notoriously difficult non-resident bank onboarding, state-by-state sales-tax nexus, and a substantial federal-plus-state compliance load.
Last updated:
United States for founders, at a glance
Figures are descriptive data from the cited sources and computed scores — not tax, accounting, or legal advice.
- Corporate tax
- 21%
- Standard VAT
- 0%
- Formation cost
- $500
- Formation time
- 2 days
- Complexity
- 3.8/5
Startup suitability (computed)
Tax level vs operational complexity
↑ Higher
Higher tax, simpler ops
Predictable administration can offset a higher headline rate.
Higher tax, complex ops
Generally the least founder-friendly quadrant for early stage.
Lower tax, simpler ops
Often the most founder-friendly quadrant, subject to banking access.
Lower tax, complex ops
Tax savings may be eroded by compliance overhead.
↓ Lower
Who this country is good for
- Venture-backed startups raising US institutional capital
- SaaS companies whose primary customer base is US-based
- Founders building toward a US IPO or M&A exit
Who this country is not ideal for
- Solo non-resident founders looking for a low-friction bank account
- Bootstrapped businesses sensitive to federal-plus-state filing overhead
- Founders who want a single nationwide sales-tax registration
Common company structures
| Structure | Abbrev. | Commonly best for | Notes |
|---|---|---|---|
| Delaware C-corporation | C-corp | Venture-backed startups raising US institutional capital | The established default for investor-ready companies; registered with the Delaware Division of Corporations and subject to federal and state filings. |
| Limited liability company | LLC | Bootstrapped or owner-operated businesses wanting pass-through taxation | Flexible and pass-through by default; less familiar to institutional investors than a C-corp. |
Jurisdiction complexity
- Formation
- 2/5
- Banking
- 5/5
- Accounting
- 4/5
- Payroll
- 4/5
- Compliance
- 4/5
Typical startup costs
Typical formation cost
$500
Typical setup time
~2 days
The country dataset records an average formation cost of about USD 500, typically Delaware filing fees plus registered-agent service. Ongoing federal, franchise-tax, and multi-state filings add materially.
Payments & banking support
- StripeAvailable
- PayPalAvailable
- Wise BusinessAvailable
Availability reflects the most recent review and may change; nominal availability does not assure non-resident onboarding.
Founder operational realities
Sales tax is state-by-state, not federal
There is no national VAT; economic and physical nexus rules vary by state, so distributed sales can create compliance in many jurisdictions.
Banking is the hardest step for non-residents
Domestic banks usually need in-person identification and an SSN or ITIN, so non-residents often rely on fintech providers with their own KYC.
Common mistakes founders make
- Choosing an LLC when investors expect a Delaware C-corp (or vice versa)
- Assuming there is no sales tax because there is no federal VAT
- Underestimating non-resident bank onboarding and Form 5472 obligations
Founder fit matrix
Non-resident suitability (qualitative): Limited. Scores are weighted composites from published methodology, not ease-of-doing-business indices.
FAQ
- Should I form an LLC or a C-corporation?
- Venture-backed startups raising US institutional capital usually form a Delaware C-corp, which investors expect. Bootstrapped or owner-operated businesses often prefer a pass-through LLC. The right answer depends on your funding plans.
- Is there VAT in the United States?
- No. There is no federal VAT. Instead, state and local sales taxes apply, with rates and rules varying by state and triggered by economic or physical nexus, which can create multi-state compliance.
Common business structures
- U.S. C-Corporation — Venture-backed startups
- U.S. Limited Liability Company (LLC) — Bootstrapped or owner-operated founders
Formation complexity
Formation difficulty is rated 2/5. Forming a Delaware entity online is straightforward, but the LLC-vs-C-corp decision and ongoing multi-jurisdiction obligations make the real complexity downstream of formation.
Typical setup timeline
The country dataset records an average formation time of about two business days, with same-day expedited options. EIN issuance and especially bank onboarding can extend the practical timeline for non-residents.
Tax environment
Federal corporate income tax is a flat 21% on corporate taxable income, with state corporate taxes on top in many states. There is no federal VAT; sales-tax obligations are state-level and triggered by economic or physical nexus.
VAT overview
There is no federal value-added tax in the United States. State and local sales taxes apply at the point of sale, with rates and rules varying by state and locality and triggered by economic or physical nexus.
Banking & payment ecosystem
Domestic US banks generally require an in-person visit and an SSN or ITIN for the signatory (banking is rated 5/5, the hardest in this set). Non-resident founders frequently rely on Mercury, Wise, or Brex, each with its own onboarding criteria.
SaaS suitability
Stripe is the established processor for US-incorporated businesses, supporting cards, ACH, and global acceptance. SaaS sales-tax obligations are state-driven and usually require dedicated tooling once nexus is triggered.
Remote-business suitability
Remote operation is common for US-resident founders, but non-resident remote setups are constrained by difficult bank onboarding and the need to manage multi-state compliance.
Compliance & accounting
Annual federal Form 1120 corporate tax return, Delaware annual franchise tax filing, and state-level filings where the company has nexus. FinCEN Beneficial Ownership Information (BOI) reporting applies under current rules. Foreign-owned US corporations have additional Form 5472 obligations.
Hiring & payroll
Federal law sets minimum standards (FLSA, FMLA) and states layer on more; payroll requires federal and state withholdings plus state unemployment insurance (payroll difficulty 4/5).
Non-resident considerations
Non-residents can form a US entity, but opening a US business bank account is notoriously difficult and increasingly so under FinCEN beneficial-ownership rules. Foreign-owned US corporations also have additional Form 5472 obligations.
Methodology notes
- Founder-fit scores are computed from published GeoBusinessIQ scorers over the same country data shown on the country profile; they are weighted composites, not ease-of-doing-business indices.
- Operational complexity is the mean of the five difficulty axes (formation, banking, accounting, payroll, compliance) from the country dataset.
Related
Country profile
Comparisons
Rankings
- Best Countries for AI Startups
- Best Countries for Digital Nomads
- Best Countries for E-commerce
- Best Countries for Freelancers
- Best Countries for Global Payments
- Best Countries for Holding Companies
- Best Countries for Low VAT
- Best Countries for Online Business
- Best Countries for a Remote Business
- Best Countries for SaaS Founders
- Best Countries for Solopreneurs
- Best Countries for Startups
- Best Countries to Start a Business
- Best EU Countries for Business
- Best Low-Tax Countries
- Easiest Countries for Company Formation
- Lowest Corporate Tax Countries
Calculators
United States across the graph
Sources
- U.S. Internal Revenue Service — Internal Revenue Service — Publication 542 (Corporations) (accessed ; reviewed )Covers: US federal corporate income tax treatment for C corporations.Why it matters: Primary-authority reference for the United States corporate tax rate in the dataset.
- OECD — OECD — economic and tax statistics (accessed ; reviewed )Covers: Comparable corporate tax, statutory rate, and economic indicators across member and partner economies.Does not cover: Effective tax rates, deductions and incentives, local surtaxes, and personal residency rules.Why it matters: Used as a cross-country baseline to sanity-check rates against primary tax-authority figures.Review cadence: Annual, plus on major statutory changes.
- PricewaterhouseCoopers — PwC Worldwide Tax Summaries (accessed ; reviewed )Covers: Corporate income tax, VAT, and dividend withholding rates across most covered jurisdictions.Does not cover: Your specific effective rate, bespoke incentives, rulings, or transactions requiring professional advice.Why it matters: Used to triangulate rates against primary tax-authority sources, not as the sole authority.Review cadence: Updated by the publisher per tax year; re-checked each data review.
- Stripe — Stripe — supported countries (accessed ; reviewed )Covers: Countries where Stripe supports first-party account creation.Does not cover: Per-account approval outcomes, supported business categories, or pricing; availability can change without notice.Why it matters: Used as the primary signal for the stripeAvailable field driving payments-weighted scorers.Review cadence: As published by the vendor; re-checked each data review.
- Wise — Wise — service availability (accessed ; reviewed )Covers: Countries where Wise Business multi-currency accounts are available.Does not cover: Individual onboarding decisions, feature availability per region, or fees; availability can change over time.Why it matters: Used for the wiseAvailable field, the EMI-fallback signal in banking and payments scorers.Review cadence: As published by the vendor; re-checked each data review.
Last updated: