United States of America - Market Entry & Business Opportunities

The United States of America, with its capital in Washington D.C., is a linguistically diverse country, with English being the most spoken language but also a wide range of other languages such as Spanish, Mandarin, and French. The country has a population of around 331 million people, consisting of various ethnic groups including White, Hispanic or Latino, African American or Black, Asian, and Native American or Alaska Native. The population has experienced a slight growth of 0.5% from 2021 to 2022. The United States is located in North America, spanning a vast area of 9.8 million square kilometres (3.8 million square miles), bordered by Canada and Mexico and encompassing Alaska and Hawaii. The official currency is the US Dollar (USD).

Economic Overview

The United States has experienced a strong economic recovery from the pandemic, aided by government intervention. However, external factors like the Ukraine conflict and inflation pose challenges. The administration focuses on infrastructure investment and transitioning to a greener economy. Fiscal pressures from an aging population require broadening the tax base and efficient spending. The decline of the middle class is a concern, and policies like improved childcare and sustainable transitions can address it. Balancing economic recovery and long-term challenges is crucial for an inclusive and resilient economy.

Market Overview

The United States offers a vast and dynamic market with a large population and high consumer spending. It has the world's largest GDP and a diverse economy across sectors. The country encourages innovation and has a developed R&D ecosystem. Its infrastructure supports efficient movement of goods and services. Free trade agreements provide access to a broader consumer base. The U.S. digital market is robust, with a strong online presence and e-commerce sector. However, businesses must navigate a complex regulatory landscape and face intense competition.

Bilateral Relations between India-USA

• India-US Trade Policy Forum is a medium for continuous engagement between two countries to enhance bilateral trade and investment relations. It also acts like a mechanism to resolve issues regarding trade and investment.
• The India-US Semiconductor Supply Chain and Innovation Partnership was established to enhance the public and private efforts to boost industry cooperation and development of mutual synergies, complementary ecosystems, and diverse supply chain in the two countries’ semiconductor industries.
• India-US Commercial Dialogue was established to discuss trade and commerce relations and identify areas for closer collaboration between the two countries. The correlated CEO Forum focuses on investments and business issues to boost a mutually beneficial business environment.
• The India-US Ministerial 2+2 Dialogue was launched in order to establish a positive, forward-looking vision for the India-US Strategic Partnership and to promote synergy in diplomatic and security efforts.

Taxation Rules in USA

In the United States, taxes include:

• Federal Income Tax: Progressive tax on individuals and a flat rate for corporations based on taxable income.
• State and Local Taxes: Varying tax systems across states, including income, sales, and property taxes.
• Social Security and Medicare Taxes: Payroll taxes shared by employees and employers to fund social programs.
• Sales Tax: Imposed by states and localities on goods and some services at varying rates.
• Property Tax: Levied by local governments on the assessed value of real estate and personal property.
• Estate and Gift Taxes: Taxes on wealth transfers above certain thresholds during lifetime or after death.
• Tax Filing and Compliance: Annual tax returns, deductions, and credits must be reported to federal, state, and local tax agencies.

Subsidies and Incentives offered by USA

The United States offers subsidies and incentives to support industries and economic growth:

• R&D Tax Credits: Federal tax credits for businesses engaged in research and development activities.
• SBA Programs: Small Business Administration initiatives provide financial assistance and mentorship to small businesses.
• Renewable Energy Incentives: Federal and state-level incentives promote the use of renewable energy sources.
• Foreign Trade Zone Program: Allows duty-free or reduced-rate importation of goods to support international trade.
• Workforce Development Grants: Funding for programs enhancing workforce skills and employability.
• State and Local Tax Incentives: Tax credits, exemptions, and reductions offered by state and local governments.

Financing Business in USA

Financing a business in the United States can be done through various sources, depending on the stage of the business, industry, and specific needs.

• Bank Loans: Traditional financing option from banks and financial institutions based on creditworthiness and business financial health.
• SBA Loans: Small Business Administration loans offering favourable terms and longer repayment periods for small businesses.
• Venture Capital: Investment from venture capital firms in high-growth businesses in exchange for equity.
• Angel Investors: Individual or group investors providing capital, mentorship, and industry connections to early-stage businesses.
• Crowdfunding: Raising funds from a large number of individuals through online platforms.
• Grants and Government Programs: Non-repayable funds provided by government agencies to support specific industries or initiatives.
• Business Incubators and Accelerators: Programs offering funding, resources, mentorship, and networking opportunities to start-ups.
• Alternative Financing: Options like peer-to-peer lending, invoice financing, and equipment leasing tailored to specific financing needs.

Top 10 Companies in USA – 2022

Rank	Company	Industry	Annual Revenue (USD)
1	Walmart	Retail	$ 622.02 B
2	Amazon	E-Commerce	$ 524.89 B
3	Exxon Mobil	Oil and Gas	$ 394.58 B
4	Apple	Electronics	$ 385.09 B
5	United Health	Insurance	$ 333.48 B
6	CVS	Pharmaceuticals	$ 330.91 B
7	Alphabet (Google)	Information-Technology	$ 284.61 B
8	Mc Kesson	Healthcare	$ 276.71 B
9	Costco	Retail	$ 237.06 B
10	Chevron	Oil and Gas	$ 232.24 B

Most Popular E-Commerce Companies in USA – 2022

RANK	COMPANY	Headquarter
1	Amazon	USA
2	Ebay	USA
3	Walmart	USA
4	Etsy	USA
5	T-Mobile	USA
6	Best Buy	USA
7	The Home Depot	USA
8	Door Dash	USA
9	Target	USA
10	Kroger	USA

Top 5 Start-Ups in USA – 2022

RANK	COMPANY	INDUSTRY	FOUNDED IN
1	Snowflake	Cloud Computing	2012
2	Electric	IT Services	2016
3	People.ai	Software Development	2016
4	Daring	Food and Beverage	2018
5	Instacart	Retail	2012

 

Business Clusters in USA

The United States is known for its diverse and vibrant business clusters spread across various regions. These clusters represent concentrations of interconnected businesses, industries, and supporting institutions that foster innovation, collaboration, and economic growth.

• Silicon Valley: Global hub for technology and innovation in California
• Wall Street: Financial epicentre in New York City
• Research Triangle: Leading centre for research, technology, and entrepreneurship in North Carolina
• Biotech and Life Sciences Cluster: Thriving biotech and life sciences hubs in Boston, San Diego, and Maryland/DC/Virginia region
• Energy Industry Cluster: Houston, Texas, prominent centre for the energy industry, especially oil and gas
• Automotive Industry Cluster: Detroit area, Michigan, known for the American automotive industry
• Fashion and Design Cluster: New York City, globally recognized fashion and design hub
• Pharmaceutical and Healthcare Cluster: New Jersey, known as the "Pharma Belt," significant for pharmaceutical and healthcare industries
• Food and Beverage Cluster: Midwest region, "Corn Belt," major centre for the food and beverage industry
• Renewable Energy Cluster: California, Texas, and Colorado developed clusters in the renewable energy sector

How to Set Up a Business in USA?

Once the right Business Structure is identified, below mentioned steps are to be followed to start a business in the USA:

• Selecting a State to set-up the Business
• Registration of the Business
• Obtain Federal and State ID Numbers
• Apply for Licenses and Permits depending upon the type of business
• Open a Business Bank Account

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Visa and Immigration

The United States provides different types of Visas to Indian entrepreneurs who are looking to set up their business in USA.

• B1 Visa - The B1 visa is for temporary business purposes in the United States. Indian citizens can use this visa for activities like meetings, conferences, and negotiations. It does not allow employment and has a maximum stay of six months. It does not provide a pathway to permanent residency or work authorisation.
• E1 Visa - The E1 visa allows individuals from certain treaty countries to engage in substantial trade with the United States. Indian citizens are currently not eligible for the E1 visa as India does not have a qualifying treaty. The visa is for owners or employees of businesses involved in significant trade activities. The trade must be ongoing, substantial in terms of quantity and value, and can include goods, services, banking, or technology. The initial visa can be granted for up to five years, with the possibility of extensions.
• EB 5 Visa - The EB-5 visa program offers permanent residency to foreign investors who make a substantial investment in a qualifying U.S. business. Indian citizens are eligible, subject to meeting program requirements. The minimum investment amount is generally $1.8 million, but it can be $900,000 in targeted employment areas (TEAs). The investment must create or preserve 10 full-time jobs for U.S. workers. Investors can participate through designated regional centres, which offer pre-approved investment opportunities. Initially, visa holders receive conditional permanent residency for two years and can apply to remove conditions afterward. After five years of conditional residency, they can apply for U.S. citizenship.

The United States has long been a stable market offering the largest consumer base across the globe making it very attractive and inviting for foreign investors. The USA is known for "doing business", however, the country has its own quirks and challenges, both on international and US specific levels that must be considered for effective and smooth business operations in the USA.

We have built a strong international presence and formed alliances with some of the largest law firms that helps India Law Offices to serve our clients from around the world. In USA, we work closely with Whiteman Osterman and Hanna LLP, a reputable law firm based in Albany, New York that offers comprehensive legal services companies and individuals from USA, as well as international clients seeking to enter the United States market.

If you are an American national or a USA based company seeking legal assistance in India or an Indian planning to enter the United States market, our firm can provide the necessary guidance and support you require.


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