Many Italian entrepreneurs look to the United States as the market where their business can truly grow. On paper, opening a company in the USA looks simple. In reality, it means entering a new environment made up of written rules and — above all — unwritten ones, in one of the most competitive markets in the world.
It is the same path our founder took: from an “all-Italian” lawyer to a professional also admitted to the New York bar, after following his first clients across the ocean. This guide grows out of that experience, and is written for anyone weighing whether and how to bring their business to the United States.
In short: setting up an American company is not difficult in itself. The difference between a successful operation and a costly problem lies in the choices made beforehand: legal form, state of incorporation, tax structure and visas. Getting it wrong at the start is something you pay for over years.
Why (and when) it makes sense to set up a company in the USA
Opening an American company makes sense when there is a concrete business reason, for example:
- selling consistently in the US market (e-commerce, distribution, contracts with American clients);
- having a physical presence — an office, a warehouse, local staff;
- raising capital from US investors or funds, who typically want to invest in an American vehicle;
- protecting your brand and intellectual property in a market where disputes are frequent;
- strengthening commercial credibility: many American partners prefer to deal with a local entity.
If the goal is only the occasional sale, it is often better to test the market first without immediately incorporating. The first question to ask is not “how do I set up”, but “why am I setting up, and what do I want to achieve in the next 24 months”.
LLC or Corporation? Choosing the legal form
This is the most important decision — and the one where we see the most mistakes. The two main forms are the LLC (Limited Liability Company) and the Corporation.
LLC (Limited Liability Company). The most flexible and streamlined form. It combines limited liability with simplicity of management. For tax purposes it is, by default, “pass-through”: profits flow directly to the members. It is often the right choice for operating businesses, service companies, e-commerce, and small structures with few owners.
Corporation (C-Corporation). A separate legal entity, with shares. In practice it is the form required if you want to raise capital from US investors or venture capital funds. It involves more formal governance and, on the tax side, profits are taxed at the corporate level and again in the shareholders’ hands when distributed.
Watch out for a recurring mistake: the “S-Corporation”, often cited as a tax-advantageous solution, requires the shareholders to be US persons. For an Italian entrepreneur it is therefore not a viable option.
The right choice depends on three factors: who the owners are (and where they reside), whether and how you intend to raise capital, and how the operation fits with Italian taxation. It is a decision to be made looking at both sides of the ocean at once.
Why everyone talks about Delaware (and when it is not needed)
Delaware is the best-known state for incorporating in the USA, for good reasons: well-established corporate law, a court specialised in commercial matters (the Court of Chancery), great flexibility and strong predictability for investors. For a Corporation intended to raise capital, it is often the standard.
But Delaware is not always the right choice. If the company physically operates in another state (offices, employees, warehouses), it will still have to register there as a “foreign entity” and bear double costs and formalities, including Delaware’s maintenance fees. For many operating businesses it can be more efficient to incorporate directly in the state where you actually work.
The practical rule: Delaware is worth it mainly for those aiming at investors and a scalable structure; for a business rooted in a single state, it often brings no real advantage.
The operational steps to set up the company
- Appoint a registered agent — a party with an address in the state of incorporation who receives official documents. It is mandatory.
- File the formation document (Certificate of Formation for the LLC, Certificate of Incorporation for the Corporation).
- Obtain the EIN (Employer Identification Number), the company tax ID issued by the IRS: essential to open a bank account, hire, and meet tax obligations.
- Draft the governance documents (Operating Agreement for the LLC, Bylaws and shareholders’ agreements for the Corporation): this is where future disputes between owners are prevented.
- Open a US bank account — often the most underestimated step: for a non-resident it may require physical presence, specific documentation and choosing the right bank.
Each of these steps is simple on its own. The value lies in making them fit together and align with the tax structure, so you don’t have to “dismantle” everything six months later.
The visa question: E-2, L-1 and the alternatives
Setting up the company does not automatically give you the right to work or live in the USA. If you need to operate in person on US soil, the visa question must be addressed straight away. The most relevant options for Italians:
- E-2 visa (treaty investor): Italy has a treaty that allows this visa. It requires a substantial investment in a real, operating American business that the Italian controls.
- L-1 visa (intra-company transfer): for those who already have a company in Italy and want to transfer a manager or key figure to the US subsidiary.
- Other routes (E-1 for “treaty traders”, more structured investor paths): they depend on the size of the operation and long-term goals.
The visa and the corporate structure must be designed together: the form of the investment directly affects visa eligibility.
Tax: how to avoid Italy-US double taxation
This is the chapter that most worries entrepreneurs — often rightly so, because it requires reasoning across both legal systems at once. The points to manage:
- Double taxation treaty between Italy and the United States: a treaty exists precisely to avoid paying twice on the same income. It must, however, be applied correctly, case by case.
- Permanent establishment: understanding when the US activity triggers tax obligations in the USA and how this is reflected in Italy.
- Italian rules on controlled foreign companies and tax residence: a poorly designed foreign structure can trigger unintended consequences in Italy.
- State taxes: beyond the federal level, many states apply their own taxes. The real tax burden therefore also depends on where you incorporate and operate.
Rates and rules change over time and vary from state to state: any planning should be verified with a professional before proceeding. The worst thing, in international tax matters, is to “copy” someone else’s structure without knowing your own position.
Protecting your assets: trusts and foundations
Expanding to the USA is also an opportunity to bring order and protection to personal and business assets. Tools such as trusts and foundations — in which we have gained direct experience working with American firms — make it possible to protect assets, plan generational succession and protect vulnerable individuals. Here too, the structure must be built by coordinating American rules with Italian ones.
The most common mistakes made by Italian entrepreneurs
- Choosing the legal form “by word of mouth” instead of the one suited to your owners and goals.
- Incorporating in Delaware out of habit, while physically operating in another state.
- Ignoring the Italian side: optimising in the USA and creating tax problems in Italy.
- Postponing the visa question, and discovering too late that you cannot operate in person.
- Neglecting shareholders’ agreements, only to fall out once the business starts doing well.
- Calling the lawyer only in an emergency. As with health, prevention costs less than the cure: a good legal check-up at the start avoids far more expensive problems later.
How PFL supports you: a bridge between Italy and the United States
The difficulty of an Italy-US operation is that it requires reasoning across two legal systems at the same time. Many entrepreneurs end up with an Italian lawyer who does not know the American market and an American lawyer who does not understand the Italian position — and they are left doing the translating themselves, at their own expense.
PFL was created to fill exactly this gap. Our founder is admitted both in Italy (registered with the bar and admitted before the Supreme Court of Cassation) and in New York (after a master’s degree at Fordham University School of Law), and the firm draws on a network of qualified collaborators in the United States as well, along with an established relationship with the Italian American Chamber of Commerce. This lets us support you from start to finish, with a single point of contact who speaks both languages — the Italian legal one and the American one.
Our approach is that of a partner, not a mere provider of opinions: we invest time in getting to know you and your business, and we build tailored solutions, avoiding recycled standard formulas.
Considering opening or expanding your business in the USA?
A first consultation helps you understand, before you spend, what the right structure is for your case — corporate, tax and visa.
Or write to us at contatti@paolofranzo.com · +39 02 5519 2653
