United States

Location

Located in North America, the United States is the 3^rd largest nation in the world.

The United States (US) comprise 50 states and 1 federal district. This includes Hawaii and Alaska, although they do not share geographical borders with the country.

The US does border separate nations Cuba, Canada and Mexico.

Population

The US population is approximately 335 million (2020), which makes up just under 5% of the global population. High levels of immigration mean that it continues to grow, with a projected 417 million by 2060.

The nation has a density of 34 people per square kilometre and the most populated states are California, Texas and New York City.

Due to its history, the US has a very diverse and multicultural population.

The US has the world’s largest economy.

It represents about 20% of total global output. It is the world’s largest economy by nominal GDP and the second-largest by purchasing power parity (PPP).

The US is forecasted to remain at the top of the global economy and one of the world’s most powerful countries.

However, its main rival, China, is expected to surpass the US to become the world’s largest economy by 2032.

Trade

The US benefits from its trade relationships with many countries. Its main ties remain with Europe and Asia.

The United States is the world’s second-largest trading nation and is among the top three global importers and exporters.

In 2020, America’s import value is at 2.809 trillion and export value at 2.127 trillion.

Note that the recent US-China trade war continues to impact national and global trade relations.

Top Imports & Exports

US top imports are machinery (including computers), electrical machinery, vehicles, mineral fuels (including oil) and pharmaceuticals.

Pharmaceuticals had the fastest-growing increase in value among the top 10 import categories.

Six of the top 10 US imports also represent its top exports.

Top exports include machinery (including computers), mineral fuels including oil, electrical equipment, aircraft and spacecraft, and automotive vehicles.

Free Trade Agreements

As a key player in the international trade landscape, the US has free trade agreements with 20 countries

One of them is the NAFTA, The North American Free Trade Agreement. It was created in 1994 and is one of the largest trade blocs in the world.

Another agreement exists between Australia and America, by which US companies with Australian subsidiaries can trade with these countries with reduced or no tariffs (in specified industries).

Expanding to the US? Here is a breakdown of the key things to keep in mind.

Company Setup

Boasting the largest economy in the world, the US provides a very strategic and opportune environment to set up your business.

You don’t have to be a US citizen or to be a US resident or to have a green card to start an LLC or a corporation in America.

The first thing, as for every country, is to choose the right business setup for you. Then, you need to choose a state to register your company. Depending on your needs, some states might be more appropriate or convenient.

You must then complete the certificate of incorporation and get your Employer Identification Number. This number is necessary not just to hire workers, but to open a bank account, pay taxes, or often to get a business licence. It is free and you can apply directly with the IRS.

To simplify setup and ensure you are getting the right solutions for your business, consulting a local partner is very beneficial.

Payroll

In the US, payroll tax is state-based. Every company must register for payroll tax in its state of formation.

There is no federal government standard regarding how frequently employees should get paid. Each state can implement its own law.

However, payroll regulations in the US do apply at both the state and federal level requiring employers to withhold income tax from wages.

Some of the taxes under payroll come under FICA taxes (Federal Insurance Contributions Act). These are taxes levied on both employers and employees and include Social Security and healthcare contributions.

Employment

The Fair Labor Standards Act (FLSA) provides guidelines to employers about employment and compensation. From one state to another, laws may vary.

The unemployment rate is at roughly 3.6% in 2019, forecasted to reach 3.8% by 2021.

Many employees work part-time and job opportunities have increased only in lower-paying retail and food service industries. The minimum wage is US$7.25 (2019).

Immigration

Historically, the American population and society has always been shaped by immigration.

US work visas are broken into two main categories:

1. Temporary non-immigrant work visas
2. Employment-based immigrant visas (also known as Green Cards), which grant the holder lawful permanent residence.

Popular work-related visa options include the E2, E1, L1, and H1B. For businesses wishing to set up in the US, this can be done at a low cost under the L1 intracompany transfer visa or E2 Treaty Investor Visa or E1 Treaty Trader visa scheme. Permanent residency comes at a higher cost.

Tax

Income tax is charged at both federal and state levels. At the federal level, rates range from 10% to 37% depending on earnings.  At the state level, income tax is charged on employee earnings at rates set by individual state legislatures.