Types of entity structures
- Branch
- US entity as subsidiary
- US entity as holding company
- US entity as separate entity
Branch
Ideal for: Companies wanting to have limited/temporary operations in the US
Merits: Easy setup- no need to set up entity, only tax filing is required
Demerits: Legal liability directly applies to parent foreign entity
US entity as subsidiary
Ideal for: Companies seeking US operations control with parent foreign firm. Also suitable for foreign companies having US customers.
Merits: Easier set-up; Can project both entities as one company; limited legal liability; Easy visa sponsorships
Demerits: Investors with US interests must invest in holding foreign entity
US entity as holding company
Ideal For: Companies operating in multiple countries, with big customer base and investors in the US
Merits: Easy access to capital markets; Easy customer and investor traction
Demerits: Complex setup and structuring especially when flipping are needed.
US entity as separate entity
Ideal for: Companies wanting complete separation of entities, having separate shareholders
Merits: Simple set-up; Adding investors/additional stakeholders is easier
Demerits: Projecting as one company to investors/customers is tough
*The information provided on this article does not, and is not intended to, constitute legal advice; instead, all information and content provided here is for general informational purposes only