Advantages of Having a Business in the U.S. for Foreign Influencers

More and more influencers and content creators from Latin America are looking for ways to optimize their income and reduce their tax burden. Having a business in the United States has become an attractive strategy for many.

In this article, we will explore the numerous advantages of establishing a business in the U.S., the types of businesses they can create, the most beneficial states, and how to go through the registration process.

Tax and Financial Benefits of Having a Business in the U.S.

• Significant Reduction of Tax Burden‍

One of the most compelling reasons for foreign influencers to consider setting up a business in the United States is the opportunity to significantly reduce their tax burden. Countries like Colombia, Argentina, Mexico, Chile, and Ecuador have high tax rates for personal and business income, which can negatively impact the earnings of content creators. In contrast, the U.S. offers a more favorable tax system for businesses.

For example, in Colombia, the tax rate for individuals can reach up to 39%. In Mexico, the rate can be as high as 35%. In the United States, depending on the business structure and the state in which the company is registered, the rates can be considerably lower. This means that influencers can retain a larger portion of their income by taxing in the U.S. rather than in their home countries.

• Access to Deductions and Tax Benefits

In addition to lower tax rates, businesses in the United States have access to a wide range of deductions and tax benefits. Expenses such as recording equipment, work-related travel, hiring staff, and other operational costs can be deducted, further reducing the tax burden. These types of deductions are not always available in the tax systems of many Latin American countries.

Types of Businesses Influencers Can Create in the United States to Lower Their Tax Burden

1. LLC (Limited Liability Company): An LLC is a popular choice among influencers due to its flexibility and tax benefits. LLCs allow owners to avoid double taxation, as the company's income is considered personal income and taxed only once. Additionally, they offer personal asset protection, which is crucial for those who want to separate their personal finances from their business finances.
2. C Corporation: Another common business structure is the C Corporation. Although it is subject to double taxation (the company's income is taxed, and then the dividends are taxed when distributed to shareholders), it can be beneficial for influencers who plan to reinvest a large portion of their profits into growing their business. C Corporations are also attractive to those looking to attract investors and eventually go public.
3. S Corporation: S Corporations combine some advantages of LLCs and C Corporations. They allow owners to avoid double taxation, like LLCs, but have restrictions on the number and type of shareholders they can have. This can be a viable option for influencers who want a more formal structure and plan to keep a limited number of partners.

Most Beneficial States for Influencers

1. Delaware: Delaware is known for its favorable corporate laws and flexibility in business structure. It is not necessary to be a resident of Delaware to register a business in this state, making it very attractive to foreign influencers. Additionally, Delaware does not charge taxes on income generated outside the state, which can be a significant saving for those with global audiences.
2. Florida: Florida is another popular state due to its favorable business climate and the absence of state personal income tax. This means that the income earned by the business is not subject to additional state taxes, which can result in significant savings. Additionally, Florida is a growing business hub, especially in industries like technology and entertainment.
3. Wyoming: Wyoming offers one of the most business-friendly tax structures. It has no state income tax on corporate or personal income, and filing and maintenance fees are relatively low. This makes it an excellent option for influencers looking to maximize their income and minimize operating costs.

How to Create a Business in the United States as an Influencer

• Choose the Type of Business and State: The first step is deciding which type of business structure best suits your needs (LLC, C Corporation, S Corporation) and in which state you want to register your business. Factors such as tax rate, local regulations, and operating costs should be considered.
• Register the Business: Once you have decided on the type of business and the state, the next step is to register your business. This process typically includes filing documents such as Articles of Incorporation (for corporations) or Articles of Organization (for LLCs), and paying the applicable registration fees.
• Obtain an EIN: The Employer Identification Number (EIN) is essential for operating a business in the United States. This number, provided by the IRS, is used for tax purposes and is necessary for opening business bank accounts, hiring employees, and filing tax returns.
• Open a Bank Account: Once you have your EIN, you should open a business bank account. This will allow you to separate your personal finances from your business finances and make it easier to manage your income and expenses.
• Comply with Business Obligations: It is crucial to comply with all tax and regulatory obligations. This includes filing federal and state tax returns, maintaining proper financial records, and complying with any other specific regulations of the state where the business is registered.

Advantages of Having a Business in the U.S. for Foreign Influencers

• Access to Specialized Tax Consulting: Tax planning allows influencers to identify deductions and credits that can significantly reduce the amount of taxes to be paid. This translates directly into more money in your pocket.
• Ease of Business Structuring: Another significant advantage for influencers in the United States is the ease of creating and managing business structures, such as LLCs (Limited Liability Companies) and Corporations. These structures can offer additional tax benefits and personal asset protection. For example, an LLC allows influencers to separate their personal income from the income generated by their business, which can result in more favorable taxation and more effective risk management.
• Benefits of International Treaties: The United States has tax treaties with many countries, which can offer additional benefits to international influencers. These treaties can help avoid double taxation, allowing income generated in the United States not to be taxed again in the influencer's home country. This benefit is crucial for influencers from Latin American countries, as they can enjoy greater tax efficiency and retain a larger portion of their earnings.
• Networking and Growth Opportunities: The United States, being a global hub for entertainment and technology, offers vast networking and growth opportunities. Influencers can attend events, conferences, and trade shows where they can connect with brands, other content creators, and industry professionals. These connections can open doors to collaborations, sponsorships, and other business opportunities that can significantly boost their careers.

Frequently Asked Questions

1. What type of business should I choose as an influencer in the United States?It depends on your specific needs. LLCs are popular for their flexibility and tax benefits, while C Corporations might be better for those looking to attract investors and eventually go public.
2. Do I need to be a resident of the United States to create a business there?No, you do not need to be a resident. States like Delaware and Wyoming allow foreigners to register businesses without needing to reside in the United States.
3. How can I maximize my tax deductions as an influencer?Hiring a tax consultant specialized in the digital entertainment industry is key. They can help you identify all possible deductions, from recording equipment to travel and marketing expenses.

Having a business in the United States offers multiple advantages for foreign influencers, from significant tax burden reduction to access to specialized tax consulting and networking opportunities. With the right structure and advice, content creators can maximize their income and protect their assets effectively. If you are considering expanding your presence and optimizing your finances, creating a business in the United States could be the strategic step you need.

At Prodezk, we offer personalized service at every stage of the process, ensuring a hassle-free experience and successful registration of your business in the U.S.