If you are going on business travel to USA to setting up a business in the United States, you must be ready to face some challenges that you might not expect. Remember that the USA is one of the best countries to start a business as a foreigner.
New York and Los Angeles will serve as case studies for illuminating these complexities and the unique difficulties faced by local entrepreneurs in each city.
Issues with Electricity and Building Permits
An average of 89 days and 15 different processes are required to secure a building permit in New York City. Some of these steps include submitting the zoning schematics, acquiring sewer connection permits, obtaining occupancy licenses, and obtaining department of transportation work permits.
It can take more than 60 days to get your electricity switched on, and many of them have costs that can amount to more than USD $6,000.
The average time to obtain a building permit in Los Angeles is 68 days, and this includes 17 different steps. However, there are often substantial fees involved. For an estimated sum of $48,646 (USD), a building plan review and permit will be required.
Getting water hooked up can take 42 days and cost over $3,000 USD, while getting power can take 134 days.
An average of 12 days is required to register a property in New York City. Private companies handle stages one and two (obtaining a title report and conducting an environmental study), while a public body handles steps three and four (transferring forms and recording title).
It takes 20 days and 5 procedures to register a property in Los Angeles. To provide title insurance policies, the process can take as long as two weeks if a third-party organization needs to do a number of environmental checks.
With a World Bank-grade of 2, both cities offer very simple access to credit. When it comes to protecting the interests of both borrowers and lenders, the United States Capital Market is the most developed in the world.
Borrowers are able to provide security against a loan in a setting where the rights and duties of all parties are clearly defined and protected thanks to the existence of rules governing collateral and bankruptcy.
When compared to other OECD countries like Germany or the United Kingdom, the United States’ robust regulatory system ranks highly in investor protection. Shareholders have defined rights and clear avenues to seek redress, and corporate transparency regulations assist decrease the possibility of exploitation.
The Securities and Exchange Commission’s (SEC) aim is to safeguard investors while encouraging investment by ensuring orderly and fair market functioning.
Tithing and Taxes
The Internal Revenue Service (IRS) is notorious for its stringent enforcement of the United States myriad federal, state, and municipal tax laws. The tax overhaul of 2018 brought forth new regulations for corporations and individuals alike. Until the new framework is fully understood, businesses and their advisors cannot fully understand their responsibilities under it.
The transition tax was reduced from 8-15%, the corporate tax was reduced from 35% to 21%, and the maximum allowable interest deduction was limited to 30% of 12-month earnings. The market is feeling the effects of these shifts, but the full extent of those effects is not yet clear.
Check out this guide on how to get an America visa for Luxembourg citizens.
International Business and Commerce
When compared to the regional average of 68.71, the United States ranks 36th for the ease of trade across borders. Different regulations apply at the US-Canadian and US-Mexican borders, the two countries with which the US does the most trade.
The United States, Mexico, and Canada Agreement (USMCA) was recently renegotiated to replace NAFTA. Protecting intellectual property and labor and environmental rights were two of the main points of emphasis throughout the renegotiation, along with striking a balance between the interests of the automobile and farming industries.
Putting Contracts to Use
According to the World Bank’s 2018 report, the United States is ranked sixteenth in contract enforcement because it can take three hundred and seventy days to file and serve (30 days), to go to trial (240 days), and to enforce a judgment (100 days), compared to a global best of one hundred and sixty-four days.
Taking legal action, or the threat of doing so, is a frequent way for businesses and individuals in the United States to settle disagreements with one another. Each state’s and the federal government’s legal code is rooted in English common law.
Methods for Dealing with Financial Trouble
When it comes to the simplicity with which bankruptcy cases can be settled, the United States comes in at number three, according to the most recent World Bank report. One year is far less time than the area average of 2.9%.