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The Latest U.S. Startup Data: Is it Still First Choice for Entrepreneurs?

It is still too early to calculate the ultimate losses of the unprecedented global events of the past year on the economy and human loss. However, the long-term steady growth of business formation figures in the U.S. has continued over the last decade, with figures showing a renewed surge after the first three months of 2020.  

According to data from the US Business Formation Statistics (BFS), the number of business applications increased from 2.46 million in 2010 to 4.41 million in 2020, a whopping 78.8% increase. The business applications increase from 2019 is at 26.9%.

These figures continue to show the U.S. is still a popular choice for startup owners considering business incorporation. This comes as no surprise considering the country’s high rating given by the World Bank for ease of business rating of 91.6 and ranking it as 6th.

Funding plays a pivotal role

Startup success or failure does not only depend on location, which often has no significance for tech startups. The U.S. offers the most opportunities for ventures to raise money, and funding options play a vital role for new businesses.

Startup capitals around the world, including the main ones like London, Berlin, and Tel Aviv have a strong network of players for startups. However, even though they offer opportunities to find seed and early-stage funding, many entrepreneurs feel they lack options for finding growth stage funding, something that is more easily available in the U.S.

The U.S. market attracts far more startups at their early stages, with many preferring to move to the U.S. when more funding is required to ensure their further growth.

Doing business in a lucrative market

Besides being a technologically advanced economy, the United States is one of the largest consumer markets with access to many more countries. U.S.-based companies also have unlimited choices to the countries they can do business with because of the country’s trade agreements that increase business potential.

Some states are more business-friendly than others, making them more attractive for startups. Most states do not allow business owners to live in one state and incorporate their business in another. Delaware and Nevada are exceptions, and Delaware is known for its favorable business environment.

Ease of incorporating

Business incorporation in the U.S. is as easy for non-citizens as it is for American citizens. Non-Americans with companies registered in the U.S. are also afforded the same opportunities and have the same responsibilities. All U.S. registered businesses can seek bank loans, investments, and open an American bank account. Foreign business owners also qualify for a visa or residency.

The required steps to incorporate a company are easy and administered at the state level. Incorporation is a legal structure that helps to separate the business from the individuals who formed it.

Startups need to determine which state they want to incorporate in and the type of business structure which suits their business. In the U.S. the best choices are a limited liability company (LLC) or corporation.

Business incorporation offers startup owners personal asset protection, credibility with potential customers, and with an LLC, they can also avoid double taxation.

Predictable legal system and ease of doing business

Besides a favorable economic environment, the U.S. has a predictable legal system and a stable political environment. Additionally, it is easy to move goods to the world-wide market because of its well-established transportation system. America has a sophisticated air, sea, rail, and road system and 7 of the top 10 cargo moving airports are there.  

Home to over 4,000 universities and colleges, America has no shortage of skilled workers at all levels. The U.S. is a world leader in the protection of intellectual property rights, patents, and trademarks. These are strongly enforced by the U.S. Patent Office.

The U.S. has a fair and efficient legal system that is favorable for businesses and startups. Forming a corporation in the U.S. is extremely easy and requires no government authorization. Delaware’s legal system is known for its corporate law expertise. Their streamlined process, fair and impartial handling of cases have made the state extremely popular with established companies.


America continues fostering entrepreneurship, as the latest figures for new business formations confirm. Startup opportunities are not limited to American citizens. Foreigners continue to prefer the favorable conditions offered by the country, and many international students also stay on to become startup entrepreneurs.

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