America, officially the United States of America (USA), is a global leader in finance, technology and pharmaceuticals. It is a country with a high-income economy, with a GDP per capita of $68,309, and a population of about 328,2 million people. The United States of America is an attractive country to launch a business, both for entrepreneurs and investors. There are a lot of start-up ventures in America that have been successful, and they continue to grow over the years. Larger businesses also show good profits in different industries such as IT, financial services, scientific research and health care.
Ease of Doing Business in America
The United States is a country that is always ranked among the best ones regarding the ease of doing business. Based on a regulatory environment that is particularly favorable to setting up and operating a business, American business climate is about free entrepreneurship, fair competition, and stable democracy.
The USA is open for foreign investors. About six million Americans work in companies in the United States run by foreign investors. Moreover, their number grows every year. Since an influx of foreign businesses creates jobs for U.S. residents and improves the economy, the country welcomes this tendency.
According to the Doing Business 2020 report, ease of doing business ranking in United States is:
- Rank: 6
- DB score: 84.0
The ease of doing business score (DB score) serves as the basis for ranking economies on their business environment and shows an economy’s absolute position relative to the best regulatory performance, while the ease of doing business ranking is an indication of an economy’s position relative to that of other countries’ economies.
Business Taxes
If you conduct business in America, you must pay federal, state and local taxes. This country is also known for the IRS strictly enforcing tax rules. Despite the fact that the US has a reputation for having one of the tightest tax systems in the world, it’s not a problem for most of the business start-ups.
There are also tax payments, that are known as the total number of taxes paid by businesses (plus electronic filing). This tax is counted as paid once a year even if payments are more often. The World Bank research shows that the USA tax payments (number) is 10.6.
Income tax
An income tax is a tax imposed on individuals or business entities (taxpayers) in respect of their income or profits earned. Income tax rates may vary by types or characteristics of the taxpayer and the type of the income.
As for the US Personal Income Tax Rate, it is 37%.
Corporate tax
A corporate tax (also called corporation tax or company tax) is a direct tax imposed on the profits of a corporation at the federal, most state, and some local levels. The corporate income tax (CIT) rate in the USA is 21% (since January 1, 2018). Nevertheless, shareholders of most corporations are not taxed directly on corporate income, but must pay tax on dividends paid by the corporation. Dividend Tax rate is 0%, 15% or 20%, and depends on the company taxable income and filing status.
In the United States, corporate income is taxed twice (it is known as double taxation), once at the level of the company and then at the shareholder level. It means that the business first faces the corporate income tax and then shareholders pay taxes.
The integrated tax rate on corporate income reflects both the corporate income tax and the dividends or capital gains tax — the total tax on corporate income. The USA integrated tax rate is 47.47%.