Introduction:

In the global international trade landscape, the United States stands out as a major player, offering a robust platform for export companies. Establishing an export company in the US not only opens doors to the vast American market, but also provides access to a world-class logistics infrastructure and a network of international trade agreements.

Recent data from the U.S. Department of Commerce shows that U.S. exports will exceed $2.5 trillion by 2022, with small and medium-sized businesses accounting for more than 97% of exporters. This impressive statistic underscores not only the volume of American foreign trade, but also the accessibility of the market for companies of various sizes.

This guide has been meticulously crafted to demystify the process of opening an export company in the United States, turning a potentially complex procedure into clear, actionable steps. Whether you’re an entrepreneur looking to expand your business globally, an experienced business owner targeting the US market, or a consultant assisting clients on this journey, our goal is to provide a comprehensive and practical roadmap for successfully navigating this important step in international expansion.

Part 1: Ready to Roll 🚀 – Basic Strategies and Practical Actions

Part 1, “Ready to Roll”, offers practical actions and immediate advice for entrepreneurs who need quick and effective guidance.

1. Understanding the American Export Scenario: Basic Concepts

Before starting the process of opening a company, it is crucial to understand the US export environment:

1. Export Regulations: Familiarize yourself with EAR (Export Administration Regulations) and ITAR (International Traffic in Arms Regulations).
3. Relevant Government Agencies:
   • Department of Commerce (DOC)
   • Bureau of Industry and Security (BIS)
   • Customs and Border Protection (CBP)

4. Product Classification: Understand the Harmonized System (HS) and the Commerce Control List (CCL).

5. Trade Agreements: Learn about the main US free trade agreements (e.g. USMCA, agreements with Asian countries).

6. Foreign Trade Zones (FTZs): Special areas that offer tax and customs advantages.

2. Choosing the Right Legal Structure

Selecting the right legal structure is crucial for an export company:

1. LLC (Limited Liability Company):
   • Flexibility in management and taxation
   • Popular with small and medium-sized export companies
   • Personal liability protection
2. C-Corporation:
   • Preferred structure for larger companies or those planning to seek significant investment
   • Allows issuance of shares, facilitating capital raising
   • Possibility of specific tax benefits for exports (e.g. IC-DISC)
3. S-Corporation:
   • Avoids double taxation
   • Limitations on the number and type of shareholders (not available to non-residents)

Specific Export Considerations:

• Evaluate the possibility of creating an export-specific subsidiary
• Consider structures that optimize export tax benefits

3. Selecting the State and Place of Incorporation

The choice of state to register your export company is strategic:

1. States with Important Ports:
   • California (Los Angeles/Long Beach)
   • New York/New Jersey
   • Texas (Houston)
   • Florida (Miami)
2. States with Tax Benefits:
   • Delaware: Favorable corporate laws
   • Nevada or Wyoming: No state income tax
3. Proximity to Target Markets:
   • Consider geographic location in relation to your main export markets

Factors to consider:

• Logistics and transportation infrastructure
• Operating costs (rent, labor)
• State incentives for export companies
• Proximity to suppliers or business partners

4. Initial Steps for Company Registration

Once you have chosen your legal structure and state, follow these steps:

1. Choose a Company Name:
   • Check the availability of the name in the chosen state
   • Consider a name that is attractive internationally
2. Appoint a Registered Agent:
   • Essential for receiving legal and tax documents
3. Prepare and Submit Incorporation Documents:
   • Articles of Organization (LLC) or Articles of Incorporation (Corporation)
   • Include export activities in the corporate purpose
4. Obtain the EIN (Employer Identification Number):
   • Required for tax and banking purposes
5. Register with the DUNS system:
   • Get a DUNS number, essential for many export operations
6. Open a Business Bank Account:
   • Choose a bank with experience in international trade
7. Get export-specific licenses and registrations:
   • Registration with the Automated Export System (AES)
   • Specific licenses depending on the products exported

Part 2: Deep Dive 🤿 – Technical Depth in Advanced Strategies

Part 2, “Deep Dive”, provides in-depth analysis for those who wish to delve into the technical and complex aspects of international finance.

5. Compliance and Export Regulations

Compliance is crucial in the export business:

1. Product Classification:
   • Determine the correct HS (Harmonized System) code for your products
   • Check that items are on the Commerce Control List (CCL)

2. Export licenses:
   • Identify whether your products require specific licenses
   • Familiarize yourself with the process of applying for licenses with BIS

3. Specific Regulations:
   • ITAR for defense-related products
   • EAR for dual-use products (civilian and military)

4. Sanctions and Restrictions:
   • Check the List of Prohibited Entities
   • Be aware of economic sanctions against certain countries

5. Documentation:
   • Keep detailed records of all export transactions
   • Implement a robust document management system

6. Tax and financial aspects

Optimize your tax and financial structure:

1. IC-DISC (Interest Charge Domestic International Sales Corporation):
   • Special tax structure that can significantly reduce taxes on export profits
   • Available for C-Corps and certain types of LLC

2. Foreign Trade Zones (FTZs):
   • Consider operating in an FTZ for customs and tax benefits
   • Useful for companies that import components and re-export finished products

3. Export financing:
   • Explore programs from the Ex-Im Bank (Export-Import Bank of the United States)
   • Consider international factoring or export credit insurance

4. Foreign exchange risk management:
   • Implement hedging strategies to protect against currency fluctuations
   • Consider foreign currency accounts to facilitate international transactions

5. International tax planning:
   • Evaluate double taxation treaties between U.S. and destination countries
   • Consider international holding structures for tax optimization

7. Logistics and Supply Chain

Establish an efficient supply chain:

1. Logistics partners:
   • Select experienced freight forwarders and customs brokers
   • Consider partnerships with 3PL logistics operators

2. Warehousing infrastructure:
   • Evaluate the need for own vs. outsourced warehouses
   • Consider strategic location near ports or airports

3. Transportation:
   • Determine the most efficient modes of transportation (sea, air, land)
   • Negotiate contracts with international carriers

4. Technology:
   • Implement supply chain management (SCM) systems
   • Use real-time load visibility platforms

5. Packaging and labeling:
   • Adapt packaging to withstand international transportation
   • Ensure compliance with labeling requirements of destination countries

8. International Marketing and Sales Strategies

Develop a global marketing approach:

1. Market Research:
   • Conduct detailed analysis of target markets
   • Identify trends and needs specific to each region

2. Product adaptation:
   • Modify products as necessary to meet local regulations and preferences
   • Consider cultural differences in product presentation and marketing

3. Distribution channels:
   • Choose between direct sales, local distributors or e-commerce
   • Establish strategic partnerships in key markets

4. Participation in trade fairs and events:
   • Attend international trade shows in the U.S. and abroad
   • Use U.S. Department of Commerce matchmaking programs

5. Digital marketing:
   • Develop a multilingual online presence
   • Use SEO and content marketing strategies adapted for international markets

9. Risk Management and International Compliance

Protect your business against the risks inherent in international trade:

1. International Contracts:
   • Develop robust contracts that address specific export issues
   • Consider including international arbitration clauses

2. Intellectual property:
   • Protect your trademarks and patents in destination markets
   • Be aware of the differences in IP laws between countries

3. Export insurance:
   • Get insured against political and commercial risks
   • Consider coverage for supply chain disruption

4. Anti-corruption compliance:
   • Implement strict FCPA (Foreign Corrupt Practices Act) compliance policies
   • Train employees regularly on ethical international business practices

5. Crisis management:
   • Develop contingency plans for supply chain disruptions
   • Prepare to deal with product recalls on an international scale

10. Resources and Government Support

Take advantage of the resources available to exporters in the U.S:

1. U.S. Commercial Service:
   • Use matchmaking and market research services
   • Participate in government-organized trade missions

2. Small Business Administration (SBA):
   • Explore export financing and loan guarantee programs
   • Participate in export training and webinars

3. State Trade Expansion Program (STEP):
   • Seek state grants for export activities
   • Take advantage of mentoring and networking programs

4. Export-Import Bank of the United States:
   • Explore export credit financing and insurance options
   • Use country risk assessment tools

5. U.S. Trade and Development Agency:
   • Participate in events to connect with international buyers
   • Explore opportunities in emerging markets

Conclusion

Opening an export company in the United States is a challenging but potentially very rewarding venture. The American market offers a robust platform for reaching global customers, supported by a world-class infrastructure and an export-friendly business environment.

Key points to remember:

1. Choose your legal structure and location carefully, considering specific export factors.
2. Be fully compliant with export and international trade regulations.
3. Develop a tax and financial strategy that takes advantage of specific export incentives.
4. Invest in an efficient supply chain that is adaptable to the demands of global trade.
5. Use available government resources to support your export activities.

For those embarking on this journey, remember: success in international trade requires not only technical knowledge, but also cultural adaptability, resilience and a long-term strategic vision. With the right approach, your US export company can become a powerful bridge between global markets, capitalizing on unique opportunities in the international trade landscape.

To deepen your knowledge and be better prepared for the specific challenges of operating an export company in the US, we invite you to participate in our next webinar: “Masterclass in Global Exporting: Advanced Strategies for US-based Companies”. In this event, we will discuss detailed case studies and offer practical insights from successful exporters and international trade experts.

Remember, the world of international trade is constantly evolving. Stay informed, be flexible in your strategies and always be ready to adapt to changes in global markets. With dedication, careful planning and a proactive approach, your US export company will be well placed to capitalize on the vast opportunities of global trade.

FAQs

Kleyton Tartarotti

Member of the IMA (Institute of Management Accountants) – USA

Member of the AICPA (American Institute of CPAs) – USA

Member of AAII (American Association of Individual Investors) – USA

Member of AAA (American Accounting Association) – USA

Member of the FMA (Financial Management Association) – USA

These associations not only attest to Kleyton’s commitment to professional excellence, but also ensure that his knowledge is always at the forefront of international financial and accounting practices.

With a robust academic background, including a Bachelor’s degree in Accounting and MBAs in International Finance and Accounting, as well as in International Business, Kleyton offers a unique and comprehensive perspective on the global business landscape.

Through the Tartarotti Report, Kleyton invites visionary entrepreneurs and executives to connect, explore opportunities for collaboration and, together, successfully navigate the complex world of international corporate finance.