In this post we explain and give some tips for entrepreneurs who want to open an LLC or a CORP in the USA and we answer one of the most common questions: How do I open a business bank account in the USA?
There are several myths about starting a business in the United States; Actually, starting to do business in the northern giant is very easy. Scalability and durability is another addendum, but we'll talk about that later. For now, let's focus on the creation of a company, and one of the items that entrepreneurs who intend to do business in the USA must overcome: opening a bank account.
Let's start by explaining the steps of creating a company and some data that we know are important:
The first thing is to choose the type of company you want to open: a Limited Liability Company (LLC) or a Corporation (CORP), that will depend on the business model that best suits the business model. The form and percentages that are taxed, for example, can shed much light on which should be chosen; We wrote a blog about this:Myths and truths: everything you need to know about taxation in the United States.
The second thing is to choose the state where the company is going to open. At this point, the strategy will be crucial, since some states offer better market opportunities, tax benefits or infrastructure, that will depend, we insist, on the business model.
That is why we decided to share relevant information about Texas, Florida and Delaware.
According to ICEXTexas is the state with the largest number of free zones in the country, 32 to be exact. According to the Energy Information Administration (EIA) is the state that produces the most energy in the entire US, and it is also the one with the most installed capacity for solar energy and biodiesel production. The total economic impact of the energy sector is estimated at USD $172,000 million.
Among the most important sectors in Texas are medicine, biotechnology, development of medical instruments and medicines, says the ICEX report. Among other things, because the city of Houston is home to the largest medical center in the world, the Texas Medical Center, an entity that invests around USD $3,000 million a year in research and receives more than 10 million patient visits a year.
In the information technology and electronics sector, Texas is the second state in the country that employs the most people: 203,700 in 17,600 companies related to electronics, with an average annual salary of more than 96,600 dollars; In addition to this, Texas has more than 13,600 people working directly or indirectly in the video game industry, being the second state in the nation with the highest number of jobs in this sector.
The sectors with the greatest potential in Texas are energy, as it is the state that produces the most energy in the entire US; the manufacturing sector that employed 880,900 workers in 2019 (7.04% of the total employed population); and foreign imports, since it is the second US state with the most reception of new Foreign Direct Investment (FDI) projects, only surpassed by California.
Known as the Sunshine State, Florida has significant solar energy potential, as well as significant biomass resources and small amounts of oil and natural gas production. According to EIA, In 2020, Florida was the second largest producer of electricity after Texas; natural gas generated about 75% of the electricity in that year. According to this same entity, Florida ranks second, after California, with the largest number of registered electric vehicles, and it is not for less, since the state has 2,300 public access electric vehicle charging stations.
In other words, renewable energies are presented as an excellent business opportunity, according to EIAAbout 85% of the state's solar generation is at utility-scale installations (1 megawatt or more). On the other hand, generation from small-scale installations (less than 1 megawatt) nearly tripled between 2018 and 2020, in part due to the removal of state restrictions on leased solar systems.
Another of the industries that is emerging with the most potential, not only in Florida, but in the world, is the hemp industry. According to the Latin American Industrial Hemp Association (Laiha), hemp is an industry that is growing rapidly and offers scalable opportunities to entrepreneurs who want to venture, since the properties of the vegetable fiber range from the medicinal industry to construction.
It is important to highlight that inclusive policies in Latin America on the cannabis industry have allowed this market to be projected as one of the strongest in the region, according to Markets and Markets, the global cannabis market was valued at USD $20.5 billion in 2020 and is expected to reach USD 90.4 billion by 2026, which, it is important to highlight, due to regulations in much of the world.
Now, let's look at some relevant data about the cannabis industry in Florida, according to statistics compiled by the Department of Agriculture and Farm ServicesFlorida Consumer in 2021 alone, 30,000 acres were approved to plant hemp; 65 counties in Florida approved the cultivation of the fiber and 802 permits were processed for the planting of the fiber, in addition to this, recently, according to this entity, it was approved in Florida to issue food permits for the manufacture, processing, packaging, possession, preparation or sale of hemp extract intended for human consumption wholesale or retail.
Another of the main industries in Florida is aviation and aerospace with a large supply chain; financial services, fintech, insurance and consulting, since Florida is home to the third largest group of insurance and banking companies in the United States; the life sciences industry with 1,440 establishments developing biotechnology, pharmaceuticals and medical services; logistics and distribution, home to 20% of all US exporters; and manufacturing, which employs 377,400 workers, earning an average annual salary of $59,389.
Delaware's location is very convenient for doing business in the USA, as it’s located in the heart of the East Coast: midway between the nation's commercial capital, New York City, and the political capital, Washington DC, less than two hours by train or in a comfortable trip through the Interstate - 95.
Another important item is access to markets. According to the government of Delaware, there are more than 123 million consumers within a 500-mile radius. That's 40% of the US population within a few hours' drive.
About its industrial history, says the entity, there are more than a million companies. 63% of fortune 500, are incorporated in Delaware. Regarding its tax rate, Delaware has never had a general sales tax or an inventory tax. There are no state property taxes, and local property taxes are very low. The state and local tax burden, says the entity, is competitive with most other states.
Some of the world's most important research and development centers are located in this state, including DuPont DeNemours and Company, home to some of the world's most important scientific discoveries, including neoprene - the world's first synthetic rubber and nylon - the world's first fully synthetic fiber; the headquarters of AstraZeneca in the United States is located in Wilmington, DE, a research and commercial center that includes bioscience and pharmaceutical research and development laboratories.
Now that we have seen in which state you could start doing business, it will be necessary to have a physical address, a copy of identification of each of the partners and define the name of the company. Since Podrezk we not only accompany you in this process, but also with other services, including helping you create a Bank account.
One of the most frequently asked questions by entrepreneurs who intend to do business in the United States is, How to open a bank account in the USA? The first thing they should understand is that they can open accounts in person or virtually (remote), that will depend on the bank and the members' willingness to travel.
Requirements to open a bank account
Have state documents, these may vary by state. In Florida, for example, documents of the company's incorporation are needed: the articles of organization or incorporation and the certificate of status.
Official letter from the Internal Revenue Service (I.R.S.), a document containing the name of the company, the correspondence address, and where the Employer Identification Number (EIN) is visible.
If the opening of the account is in person, in general, depending on the bank, they suggest that all the partners be present.
Some banks request the internal statutes of the company that can be Operating Agreement or Bylaw, a legal document that defines the internal rules of the organization, among them, the administration, operation and distribution of the company's income. In the same way, it allows documenting the roles, responsibilities, rights and relationships of the members or partners, as well as their respective percentages of participation or shareholding distribution. This document can be requested by banks to verify the participation of each partner.
Identification documents of each of the partners, the most common: passport, VISA, DNI or driving license.