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Starting a company in the EU Vs US: Inc. Plan USA Comments


News provided by

Inc. Plan USA

11 May, 2015, 03:00 GMT

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WILMINGTON, Delaware, May 11, 2015 /PRNewswire/ -- The intricate process of a business startup in the current financial climate and technology-driven society is an unsettling matter for any entrepreneur, but more so for those in the EU. That's where Inc. Plan USA comes in, assisting European entrepreneurs as they set up their companies within US boundaries. With experience in matters of banking and incorporation spanning over two decades, Inc. Plan is poised to reveal to European businessmen the countless benefits of starting up their businesses in any of the 50 states that welcome entrepreneurs from abroad.

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To begin with, recent studies into the effects of governmental involvement in business practices across the EU and the USA seem to suggest that Europe is lagging behind its transatlantic neighbor. The implications of these limitations are many, and the EU is steadily losing its lure for startups, while the USA continues to build momentum. This provides companies such as Inc. Plan and their clients with a golden opportunity.

"An important factor for startups is the residency requirement," Inc. Plan Managing Partner Caroline Quigley explains. In contrast with the USA, where owners can reside and operate their business from anywhere across the nation, EU legislation requires that the company be based where the owners operate and live. When these residency requirements are not backed up by a serious governmental program to incentivize US entrepreneurs to stay and invest in Europe-based companies, 'venture capital dwindles and entrepreneurs look elsewhere', she adds.

Perhaps the greatest incentive to start a company in the USA rather than in Europe is the lack of a minimum capital requirement. In Denmark, for instance, the minimum capital requirement for a limited liability company is $14,000. In the US, there is no such requirement. "However necessary or innovative a product offering may be, and however eager the market to use that product, the EU entrepreneur is hindered in his efforts to bring it to market. That means the entire industry sector suffers, and eventually the entire economy, as well," Managing Partner Jacques Luben states.

Unfortunately, the higher the minimum threshold, the less access small and medium enterprises will have to finance, according to a 'Doing Business' 2014 study. The EU is far less willing to take a risk on an investment, as a recent article based on a Dow Jones VentureSource study reveals. Firms raised $8.8 billion in venture capital in the EU in 2014, whereas $52 billion were invested in the US, nearly 6 times as much. The USA is, therefore, a far more welcoming environment, something Inc. Plan knows full well.

Another reason the US tops Europe when it comes to startups is consumer spending in the Euro area increased to $1,485.42 billion, in the US, that number is 7.5 times larger, reaching a whopping $11,114.90 billion, a figure which makes it blatantly clear that the time for incorporating a company in the USA is now.

Finally, while the outlook for the EU might look rather bleak, and business magazines the likes of Forbes will readily concur, for startups launching in the USA, things are looking up. After all, when it comes to new ventures whose owners are putting everything on the line, every factor, no matter how small makes a difference, and location is a huge part of the initial equation.

In light of these facts, Inc. Plan is confident that European entrepreneurs will avail themselves of the opportunity to set up their companies in the USA, where the economy is flourishing, where administrative requirements are far less daunting, where links to financial hubs are much stronger, and where business processes are far less taxing than Europe's.

CONTACT
Michael Hartman
1-302-428-1200
mhartman@incplan.net

Related Links

http://www.incplan.net

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