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USA - New York

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Some US states offer advantages comparable to offshore jurisdictions due to their specific tax system. The possibility of a more prestigious appearance in dealings with business partners and attractiveness in the field of international tax planning are the biggest advantages of establishing a company in the state of New York. New York state law distinguishes several types of companies, such as Limited Liability Companies, General corporations, S-corporations, and others. A Limited Liability Company is a suitable type of company for international tax planning.

Company formation and business in New York

Incorporating a company in New York is suitable for investors who plan to do business physically in the state. New York still maintains a leading position among the US states in terms of the suitability of establishing a company. With its large population and business-friendly environment, New York offers many opportunities for investment and starting a business. Many large, multinational corporations such as Citigroup have chosen New York as their company headquarters.

Want to be the next Wolf of Wall Street? Create a company in New York and start your business today.

Tax system

The tax system in the United States is quite complicated and extensive. There are federal taxes intended to finance federal projects, and in addition there are state taxes, the amount of which is determined separately by each state. Since the range of state taxes varies from state to state (often significantly), some US states are more suitable for business, some less so. Federal corporate income taxes range between 15 % and 35 %, depending on the amount of taxable income. The lowest rate applies to an income of $50,000. In general, the tax system is very complex, and it is useful to consult with professionals to effectively set up the structure of taxes paid.

Before doing business in the US, it is important to review the following information. There are two basic types of corporations in the United States with different taxation.

The first type is the Corporation (C-Corp), which pays corporate income tax at both the federal and state levels. If a company wants to pay dividends, it is required to pay dividend withholding tax, which is also paid at the federal and state levels. These taxes can be quite high. However, an optimization can be done by asking the IRS to allow you to pay tax only on a personal basis (this creates an S-Corp). This means that if the company reports a profit of one hundred thousand dollars, taxes are paid as if you made the profit yourself.

The second basic type of company is the Limited Liability Company (LLC), whose profits are taxed directly in proportion to the partners' share of ownership. Compared to an S-Corp, this type of company offers greater tax flexibility.

Basic information

  • Type of Legal Entity: Limited Liability Company (LLC)
  • Establishment time: 2 working days
  • Number of shareholders: in LLC named „members“ minimum 1, maximum not stated
  • Shareholders: members can be FOs or companies
  • Share capital: not defined
  • Shares on bearer: not allowed
  • A New York address is required
  • Local registered agent required
  • Directors: on an LLC named „managers“ they can be appointed, but the LLC can operate without a manager, so the minimum is 0
  • Director residency: Directors do not have to reside in New York

Taxation

  • New York state general tax rate starts at 7.5% and increases to 9% (depending on profit)
  • New York also imposes an 8.85% tax rate on net profits
  • The state value added tax rate is 4% for local supplies, local municipalities set VAT up to 8.875%. Every business entity doing business in New York State must register for VAT. Not used for companies without local stores
  • Double taxation agreements with various countries were applied, determining tax rates on dividends, interest and royalties
  • Bookkeeping and annual return preparation is required, tax return filing is not required for non-US residents
  • The audit is not mandatory
  • Anonymity and privacy. Information about the board of directors and shareholders in the register of companies must not be published

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