Executive Summary
The United States of America (the USA, the US or America) is a federative country which comprises fifty states and one federal district. 48 of its congruous states are located on the North American continent, which lie between the Atlantic and the Pacific Oceans, bordering with Canada and Mexico. The US covers a total area of 9,826,630 sq km. Washington D. C. is the capital of the US; English is its official language. It is a large country by territory and population, it is multicultural and ethnically diverse. It is a founding country of NATO and after the end of the Cold War and dissolution of the USSR at the beginning of 90ies of the 20th century, the US has become a sole superpower of the world. It spends significant amounts in military technology and missions, and is a leading economy of the world.

The US is a federation, which has adopted a constitutional republic model, based on the representative democracy principles. There are three levels of the government – federal, state and local, which is believed to be the most effective way to execute its duties. Legislative power belongs to the bicameral Congress, consisting of the House of Representatives and the Senate. The executive power belongs to the government headed by the president, who also is the commander-in-chief of the military force and can veto legislative bills.

Abundance of natural resources, highly developed infrastructure and technological implementation, together with high productivity are characteristic elements of the capitalist mixed economy of the US. It actively participates in import and export of different goods and services; Canada, Mexico, Japan, China and several European countries are main international partners of the US. The country has a well developed and diversified industrial and manufacturing market segments, as well as diversified services, which contribute approximately 65% to the GDP. The US has the highest GDP in the world. It is the leader in producing and distributing electrical and nuclear energy. Even though agricultural activities contribute solely 1% to the GDP, the US is a leader in corn and soybeans production. It has a well developed private sector and is home to many multinational corporations.

The United States Dollar (USD) is the national currency of the country.

The US has an extremely diversified landscape – large plains, different types of forests, mountains and hills, different size lakes, small and big rivers. Mount McKinley is the highest point of the US, which is located in Alaska and rises at 6,194 metres above the sea level. There are also several active volcanoes on the territory of the country.

Due to its size and diversified territory, the US has different climates characteristic to its different zones. The climate types range from humid continental to sub-tropical and tropical. The flora and fauna of the country is rich with diverse plants and animals’ species.

Map, Flag and Coat of Arm


Types of Company

Rules of companies’ incorporation and management may vary significantly between the states of the USA. The information provided below gives a general overview of the American types of company.

This type of company is generally used for small and medium business. It must not have more than 35 shareholders. Only private persons and trusts may become shareholders of the company. Non-residents cannot be a company’s members. It must be a domestic company, which issues one class of shares.

The type of the company indicates the way in which it is taxed. It is usually advantageous for C-corporations to choose to be classified as S-corporations, in order to avoid double taxation.

Limited Liability Company (LLC)
This type of company may act in a similar way to an S-corporation, but it may also have non-residents as a company’s shareholders. Taxation is applied to the members and not to the LLC itself. Non-resident shareholders are liable to pay taxes only on the income derived within the territory of the US. An LLC can choose whether to be treated as a partnership or a corporation.

Sole Proprietorship
A business owner is fully liable to all the debts and obligations of the business structure. This is not a frequently used business form, and it is preferred to establish corporations, LLCs and LLPs for limiting personal liability and probably achieving tax incentives.

General Partnership
All the partners are fully and jointly liable to the debts and obligations of a partnership. It is moreover unlikely that this type of partnership is granted any tax incentives, therefore, it is not a frequently chosen type of business management.

Limited Liability Partnership (LLP)
Non-residents of the US may become partners of this structure. At least one general partner with unlimited liability and one limited partner with liability limited up to the capital invested, who does not take part in the partnership’s management, may form a limited partnership. This type of structure is widely used for investment purposes. Partners and not a partnership itself are liable to taxation.

Taxation system of the US is complex. In order to ensure compliance and lawful activities, it is important to analyze each business idea and organization individually, in order to outline the right fiscal strategy.

Individuals are liable to pay income tax at federal level, plus each state can levy additional tax rate at state level. Income tax rates have a scalable nature, depending on the total amount of a person’s annual income. US residents are liable to pay taxes on their world-wide income. Estate tax is payable at different rates on a number of occasions. Social security contributions are payable.

Corporation tax is generally paid at federal and state levels, but certain types of companies and business activities may be granted significant tax incentives and exemptions. Corporation tax is levied at varying rates. Excise duties on petrol and other types of fuel are levied. There is a number of different taxes levied in different states of the USA. Each business case should be carefully studied and addressed on the individual basis.

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