What’s better – a job or a business?
Historically, many arguments have been made in favor of each side, but the verdict almost always boils down to one statement: it depends.
While a business may offer you exceptional freedom and flexibility, you’ll also have to manage a fair share of risks and liabilities.
Pros and Cons of Doing Business in the USA #NomadDad
On the other hand, a job may provide you with a fixed monthly income, but you’ll have little to no control over your hours or workload.
Regardless of the pros and cons of each side, many people dream of having a business of their own.
Because a business gives people a chance to create something, build a legacy, and live a life of freedom, doing what they truly want.
However, not everyone has the skills necessary, the means, or the temperament to set up and manage business operations, and some people are more than happy with their jobs.
If you are one of these “happy employees,” good for you, but at the same time, the ground realities cannot be ignored.
The biggest argument in favor of a job is its “stability” and a “secure” monthly income, but is it that safe and secure?
According to the World Economic Forum, in 2020, 114 million people lost their jobs due to the pandemic and the resulting lockdown.
Most business owners had to choose between keeping their employees or staying afloat, and they, unfortunately but logically, chose themselves.
When push came to shove, the employees who weren’t considered “essential” were the first to take the hit from a global pandemic and the economic nightmare that followed.
That alone is enough to show the fragility of employment.
If you learned your lesson from the pandemic and want to be your own boss, congrats… you’re already ahead of many people who are still afraid to make that leap.
Wondering what’s next?
The most important bit: find the best business idea and work on it.
But to find the best business idea, you need to ask yourself the following questions:
- Do I want to set up a local business?
- If not, do I know what are the best countries in the world for doing business overseas?
- Can I even afford to do business abroad?
- Will I be hiring overseas, or is it better to stick to the local talent?
- Do I need to hire at all?
Were you surprised by the overseas option on our list? You’re not alone.
When setting up a business, you’ll find tons of relevant materials online, but when it comes to offshore companies, you’ll find that the number is far smaller.
That’s because many people don’t even consider the “offshore” option, which, quite frankly, is a shame.
Setting up an offshore company could be the very thing that sets you apart from your peers.
But even if you want to run a business in another country, where do you start? Most importantly, which country should you choose?
Which Country Should You Choose to Start a Business?
This isn’t the 80s or 90s anymore when having a business in the USA or some European country meant that you’ve made it big in the world.
In this day and age, countries are competing for your business.
For high-net-worth entrepreneurs, the world right now is like a buffet menu with each page displaying a country with all that it has to offer.
One country could be tax-free while another one could offer a high quality of life that you’re used to.
Similarly, one country may give you tax exemptions for setting up a company, while the other may make you liable for huge taxes by doing the same thing.
There is no one-size-fits-all formula when selecting the perfect country to start a business.
Perfection is a pretty subjective concept and what works for one may not work for the other.
Here at Nomad Capitalist, we have always preached that there is no “best” country.
Some countries can be best at certain things, but no country can be the best in all things. That is why we have always encouraged people to go where they are treated best.
Observe a country from a client’s perspective, not a potential citizen’s, and you’ll see how it falls into your plans.
Getting citizenship is not always the answer; sometimes, establishing a second residence does the job.
While other times, you might not even need a residence.
It all depends upon what you want.
Now that you know it’s not about choosing the objectively “best” country but instead focusing on what you need from a country, let’s talk about doing business in the USA.
Should You Be Doing Business in the USA?
Even in 2023, people get so wrapped up in their pursuit of setting up a business in the US that they forget to consider the most critical question: Should they even be doing business in the US?
Well, they’re not entirely at fault.
The social media we consume, the movies we watch, and the stories we’ve heard, all point to the US as a land of opportunity where you can come from anywhere and make it big if you’ve got what it takes.
And who hasn’t heard of the American dream?
But is that all genuine or just sweet nostalgia for the past halcyon days, when businesses were booming, and profits were soaring?
Compared to the 80s and the 90s, the US of today is not as business-friendly as people, especially foreigners, may think.
The United States government appears to be on a spree to bring as many people under its fold as possible through a rigid tax system and regulatory policies.
But is it all doom and gloom?
Not at all.
The US can be an exceptional place to start a business, but it heavily depends on the type of business you are planning to run.
Doing Business in the USA – What Not to Do?
As we mentioned before, no country is perfect.
The success and sustainability of a business in any country depend upon several constantly changing factors.
One of those factors is the kind of business you’re into.
Below, we’ll briefly discuss some of the best and the worst businesses to start in the US and why they were deemed so.
Best Businesses to Start in the USA
- Online consultation services
- App development
- Content writing services
- Virtual book-keeping
- Digital marketing
In 2023, starting a location-independent online business can prove to be one of your safest bets, like how many new businesses started in the past few years.
Not all online businesses are similar, one can have a growing market with a high demand while others don’t. Hence they can’t be judged similarly, but overall owning a mobile business makes perfect sense in an increasingly mobile world.
Moreover, if you don’t plan to live or hire in the US at all, you can structure your US business to be tax-free in the United States with an LLC structure.
An LLC structure is especially attractive to US non-residents and people who plan to renounce their US citizenship yet want a business in the United States.
Of course, many factors must be considered, but with intelligent tax planning, you can run a business in the United States without worrying about the resulting tax burden.
Worst Businesses to Start in the USA
- Restaurant
- Nightclub
- Limo Service
- Salon
- Mall
This list is by no means exhaustive. In fact, it barely scratches the surface.
However, one thing it does make clear is the “type” of business you should steer clear of in the US in 2023.
And that type is any (on-site) service-based business.
If you’re wondering why – read ahead.
Concerns about Doing Business in the USA
Learn from the Pandemic
The pandemic caught the entire world off guard.
No one was expecting things to get as worse as they did.
At the start, when the US federal government announced that they were shutting things down for two weeks, all hell went loose.
But, little did we know at the time, it was only the beginning of a long and stressful journey for US businesspeople.
The CARES Act
In March 2020, when the pandemic was barely in its early stages, the US Congress passed the Coronavirus Aid, Relief, and Economic Security Act (CARES).
According to the US Department of Treasury, the CARES Act was designed to provide “fast and direct economic assistance” for people in the US, but is that what happened?
If you owned a rental property in the US during the pandemic, your answer would probably be no. If you didn’t, here’s what happened.
The CARES Act included an eviction moratorium that prohibited landlords from evicting tenants if they failed to pay rent.
The eviction moratorium wasn’t for all rental properties, and it was only applied until July 2020, and certain conditions had to be met.
Still, many landlords found themselves in a financial crisis, on top of the global one, all thanks to a government Act called CARES, of all the things. The irony here is undoubtedly not lost on you.
But that’s not all. The real woes began when the CDC started rolling out similar regulations.
CDC-Issued Eviction Moratorium
If you don’t know already, CDC stands for Centers for Disease Control and Prevention.
The department is pretty straightforward and usually deals with, as the name indicates, disease control and all associated issues.
But during the pandemic, CDC did something many would argue far above their designated role. They issued a long-term eviction moratorium.
The eviction order ended on August 26, 2021, after a Supreme Court ruling, but not before it put a lot of people out of business.
The government and the CDC argued that the moratorium was issued to help the regular American folks and small businesses in an economic fallout due to the pandemic. Still, it had the almost opposite effect on many business owners.
In essence, the US government has shown how easily it can put people out of business if they think that is the right move.
If you’re intelligent enough, it shouldn’t be rocket science to figure out that if they’ve done it once, they can easily do it again – pandemic or not.
Should you stick around for that and take your chances? We don’t think so.
Ever-Increasing Taxes
How much tax is too much tax? In the US, as it seems, there is no such thing as “too much tax.”
You’ll find taxes on everything from income to estate, and every government seems to love the idea of a tax raise.
This is a significant roadblock for aspiring investors or entrepreneurs when setting up a business.
There’s no doubt why territories like the Cayman Islands, among other tax havens with no income taxes and corporate taxes, are so popular among high-net-worth individuals.
Tax-friendly countries offer a chance to keep more of what you earned, and people love that – rightfully so.
Go Big or Go Home
The USA loves “Big” – big government, big labor, i.e., labor unions, big business, and so.
This movement toward big entities is a major problem for small business owners looking to make their mark in the US.
During the pandemic, some big box stores could sell a particular item, but small local stores were prohibited from selling the same thing. Does that seem fair to you?
The US government even operates a site called Small Business Administration with helpful guides and other resources for aspiring entrepreneurs to explore opportunities, but nowhere will you find any mention of this bias against small business owners.
If you have a global business or if you own multinational companies, things may be easier for you since you would have enough capital to control certain factors that are uncontrollable for under-capitalized small business owners.
In essence, being small in the US will be a big problem for you.
Advantages of Doing Business in the USA
In the World Bank “Doing Business” report for 2020, the US was ranked sixth for ease of business.
The report was put together after tons of market research and a thorough analysis of a country’s business environment, import tariffs, and its general economy.
So, there is no doubt that the US is still pretty attractive for certain businesses.
The diverse market, the “first-world” persona, and the copyright laws in the US can be your best allies in setting up a business, but like every decision in your life, you have to be smart about it.
The Future of Doing Business in the USA
Different countries offer different benefits when it comes to starting a business. Instead of considering a country for every good thing that it provides to everyone, assess it for what it offers to you.
Think about your business needs, and then see if the “popular” country offers that. If it doesn’t, all the popularity in the world won’t matter.
If you have the will and the right plan to face all the issues that come with starting a business in the US, by all means, go ahead.
But if the US is not a good option for you, don’t lose heart. There are several countries out there competing for your business.
All you have to do is reach out, and we’ll select a place where you and your business will be treated best.
