The basics of company formations in the U.S.

Forming a U.S. subsidiary as a foreign entity is rather straightforward process but there are key considerations and decisions that needs to be made.

• Company form - The most common form of business entity for foreign owned subsidiaries is a Corporation, which is equivalent to “aktiebolag”​

• Capital Requirement - There is no minimum capital requirement to be invested in the subsidiary

• Company location - The subsidiary is incorporated in one of the U.S. States​ and a company can choose to incorporate in any state. A general recommendation is to select the state where the primary business operations will occur. However, other factors may influence the decision

• State of Delaware - Many foreign companies choose to incorporate in Delaware. With one of the main reasons being​ the widespread familiarity by legal practitioners with Delaware corporate law and if your business is publicly traded, is a private or venture capital investor or are involved in M&A activity, Delaware offers a convenient and business-friendly legal environment.

• Board of Directors and Officers - A U.S. company must have a board of directors and officers. However, there is no requirement that these persons are U.S. citizens, or live in the U.S.​

• Federal Employer Identification Number (EIN) - Securing an EIN, equivalent to an "organisationsnummer," is a post-incorporation step. The timeframe varies from one to four- six weeks based on various circumstances. An EIN is necessary to open a bank account or hire employees 

The benefits of forming a local U.S. subsidiary

In short, there are several benefits of establishing a local presence in the U.S. including streamlining business operations, reducing risk and increasing trust with both clients, vendors and partners.

• Enhanced legal protection - The incorporation of a subsidiary in the U.S. serves to mitigate a substantial portion of operational risk by localizing exposure to the American market through the subsidiary.

• Demonstrated market commitment - Local business partners often prefer engagements with entities rooted in the U.S., signaling a genuine commitment to the market and fostering stronger collaborative relationships.

• Access to local bank and insurance providers - Securing a local bank account or local insurance not only reduces transaction costs but also facilitates smoother day-to-day financial operations, contributing to a more efficient business ecosystem.

• Facilitate employee recruitment and work visas - A local entity is required for hiring local employees and to sponsor work visas for Swedish (or other European) employees looking to work part- or full-time in the U.S. This becomes practically impossible without a local entity.

How Arch Atlantic can support

Arch Atlantic’s turnkey incorporation service provides support and management of the full incorporation and registration process​

• Comprehensive Project Management & Support - We at Arch Atlantic take the helm of the entire process, offering proactive support and managing all facets of the incorporation journey. From answering your incorporation-related queries to coordinating with seasoned lawyers, we ensure a smooth and efficient process and guide you from start to finish. 

• The use of an experienced law firm is included​ - Tap into our extensive network of reputable law firms across the U.S. An experienced law firm will be engaged as part of the process, and they will draft and file the incorporation documents and offer legal advice​.

• Establish presence with a local U.S address - We offer a Chicago mailing address for up to 3 months post-incorporation so your business can get setup in a smooth way. Once incorporated, Arch Atlantic will apply for an EIN from the IRS which is sent by post to the mailing address​ which we will forward to you

• Facilitation of bank account opening - Opening bank accounts in the U.S. can be difficult but Arch Atlantic can through its local network support with the opening of a U.S. bank account by providing introductions to local banks. Most often accounts can be opened remotely. 

• Advice and counsel in other areas - We are happy to provide general advice on other issues or needs post incorporation, including visa types, banking practices, insurance considerations, and HR, employees and back-office functions. While general advice is included, if practical support is needed from third parties it would be at an additional cost.

At Arch Atlantic we want to support and simplify the incorporation process and also ensure that your business enters the U.S. market with confidence and ease. Do not hesitate to reach to us if you simply have any questions about U.S. company establishment or the process or if you are ready to take the next step in your international expansion journey.