How to Set Up a U.S. Corporation: A Practical Guide for International Founders

Establishing a U.S. company can open the door to the world’s largest economy—but it’s not always straightforward. At Makassar Law, we help founders, operators, and investors navigate the legal and strategic decisions involved in U.S. incorporation. This post outlines the key considerations for non-residents looking to form a U.S. entity.

Why Incorporate in the United States?

Incorporating in the U.S. offers significant advantages for international businesses:

• Market Access: Selling in the U.S. becomes easier from a customs and tax standpoint.

• Capital Raising: U.S. entities can access venture capital, angel investors, and public markets.

• Reputation: A U.S. presence enhances credibility with both domestic and global customers.

• Immigration Benefits: Incorporation may support visa applications under U.S. immigration law.

• Tax Planning: In certain cases, U.S. incorporation can reduce tax exposure on U.S. income.

Choosing the Right Entity: C Corp vs. LLC

C Corporation

C Corps are the preferred structure for venture-backed startups and companies planning to issue stock options. Key features include:

• Multiple classes of stock for investor customization

• Perpetual existence, unaffected by shareholder changes

• Easier equity compensation through stock option plans

• Double taxation, but often mitigated if no dividends are paid

• Formal governance requirements, which institutional investors expect

LLC (Limited Liability Company)

LLCs may be suitable for consulting firms or businesses not seeking venture capital. Benefits include:

• Pass-through taxation (like a partnership)

• Limited liability for members

• Simpler setup for closely held businesses

However, LLCs are less attractive to investors due to:

• Complex operating agreements with multiple investors

• Lack of standardized equity structures

• Higher legal costs to mimic C Corp features

Where to Incorporate: Local State vs. Delaware

Each U.S. state has its own corporate laws and tax rules. Your company can operate in any state, regardless of where it’s incorporated.

• Local Incorporation: Best for small, locally operated businesses.

• Delaware Incorporation: Ideal for venture-scale companies or those seeking institutional investment.

Delaware offers:

• Favorable franchise tax rules

• Strong protections for directors and management

• Extensive case law and legal precedent

• Investor familiarity and confidence

• Provisions for exit strategies and anti-takeover protections

Final Thoughts

For non-residents, incorporating in the U.S. can be complex—but it doesn’t have to be overwhelming. With the right legal guidance, you can structure your company for long-term success and compliance.