Entering the US market is cheaper than you think

This article is part of our series explaining the 10 most important facts about entering the US market in detail. Unclear or even contradictory information keeps many non-American companies from expanding into the States. We explain why you should definitely put the stable US market to work for your business.

There is a lot of conflicting information out there about what it costs to enter the US market.

European companies have several ways to gain a foothold in the US market, and each comes with certain costs. A US market entry usually takes one of these six routes:

1. Exporting products to the USA
2. Licensing a US company to market, sell and distribute your products
3. Signing franchise agreements with US companies
4. Forming a strategic alliance with an American company
5. Setting up a joint venture with a company in the USA
6. Forming a US subsidiary as a corporation or a limited liability company (LLC)

Costs vary from route to route. For an LLC, for example, all you need is to file the formation documents, apply for a tax ID number with the IRS and open a US bank account. Other routes can of course involve bigger investments, such as advertising and loans, insurance and government fees, staff and technology. In our experience, though, most small and mid-sized businesses only need to form a company. That lets them do business in the USA without any trouble while keeping costs to a minimum.

In the USA, company formation is handled not by the authorities in Washington but by the individual states. Many European companies, for example, form their US companies in Delaware. In this East Coast state, formation, the tax ID number and a bank account can sometimes cost less than $1000. The key is having the right partner at your side to handle the necessary filings. If all you need is a US LLC without its own place of business in the USA, our sister site zerotax.llc is the right place to go.

1What US market entry really costs you

Contrary to the claim above, forming a US company is not only remarkably simple but also affordable. The costs that hold many European business owners back from setting up in the States should therefore be no argument against entering the US market . Of course, there is more to consider. The next part of the series shows how quick and easy the formation itself is; you can find all ten facts in this overview.