Setting up a company in the USA – Florida as a business location

Florida has always been a dream destination for vacationers. But what does this mean for entrepreneurs and setting up a company in the USA? How can you protect yourself from failure and minimize the “learning curve” that is usually unavoidable when starting a new business? The answer is: it depends on finding the right advisors. This article is intended to provide an initial insight:

Good preparation for setting up a company in the USA

The most successful entrepreneurs are usually those who approach their business activities in Florida just as carefully as they would at home. It is important not to cut corners and to be well prepared: Extensive market research is just as important here as a location search motivated by entrepreneurial principles.

The involvement of experienced and objective consultants without any artificial haste are other decisive factors. The old adage about the cobbler and his last also proves to be true: although we keep hearing about successful dropouts, running a small beach bar is usually nowhere near as romantic as you might have dreamed of at your desk in the past.

Company law

Companies in America are quick, easy and inexpensive to set up: While this difference is positive, it means that a company is just an “empty” legal entity before you fill it with life or assets. For newly established companies without proof of creditworthiness, this means that landlords or other business partners demand personal guarantees from the owners, managing directors or parent companies and thus liability exists beyond the contribution. Caution should also be exercised when entering into relationships with other companies, as bankruptcy is quickly declared.

Labor law

To obtain one of the relevant investor or business visas and especially to extend them, there is no getting around the employment of U.S. workers. This is where the concept of “employment at will” comes in handy for Florida entrepreneurs. If business is going well, employees are hired. If business is bad, they are fired for any reason that is not unconstitutional (usually discrimination based on race, gender, age, disability or country of origin).

While this may not sound attractive to the employee , it is an ideal mechanism for the employer to adapt to market fluctuations. However, this mechanism is often a double-edged sword, as capable and well-trained employees prefer employers who voluntarily offer certain benefits such as private pension and health insurance. This presents the downside: good employees are quickly lost if they get a better offer somewhere else.

Taxes

Unlike other federal states, Florida does not charge private individuals any additional income tax. This means that regular income is only subject to a maximum federal income tax rate of 35%. However, property tax is considerably higher here and gains are taxed no matter how long you hold an asset.

When setting up a company in the USA, it is therefore very important to seek advice from a tax consultant or specialist lawyer who is familiar with the application of the German/US double taxation agreement and the effects of the tax laws of both countries on the international entrepreneur, in addition to planning the business activities.

Contract law

U.S. law is based on English common law and is therefore not aligned with the existence of a federal code. The result is voluminous contracts for which whole forests have to die. With the exception of immoral agreements, there is almost complete freedom of contract. Quality standards, deadlines or who pays for legal fees and court costs in the event of a dispute are regulated by contract. Disputes on which contracts are silent often end up in court.

Other aspects and questions to be clarified: Are patents protected? Do products comply with liability laws? Do products and/or services require a special license or approval by a U.S. authority? Such questions should always be clarified before goods or equipment arrive in an American port. American attorneys specialize early and many spend the majority of their time protecting their clients from litigation and disputes with government agencies.

For the well-prepared entrepreneur, America – and Florida – is still a good location. However, the move across the pond must be properly planned.

Quality of life

Americans are usually friendly towards foreign investors. Generally speaking, you are welcomed quickly and treated courteously. The social envy that many people are familiar with from Europe or other parts of the world is rare here. If you drive a great car, you are admired rather than envied, as even the simplest worker in the USA believes that everyone in this system can achieve equal prosperity.

What triggers crime or envy in other countries is therefore seen more as an incentive to achieve the same in America. This attitude also leads to a certain degree of security that is not necessarily present in other sunny destinations.

This article does not constitute legal advice, but is for general information purposes only.