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The consumer

Consumer Profile
The average age having been more or less constant since 2010 despite a slight upward trend. It reached 38.3 years in 2020. More than 18.5% of the population is under 14 years old, 65.2% ages between 15 to 64 years old and 16.2% is over 65 years old. The population growth rate is 0.5%. The average size of a household is 2.6 people, with 28% of households living alone, 34.5% of people living in two and 15.1% of households of 3 people. The percentage of women out of the total population in the US is 50.5%. About 82.8% of the population lives in urban areas. The most populated areas are in the eastern half of the United States (Great Lakes, Northeast, East and Southeast) and in the western states. The least populated populations are mountain areas, deserts and boreal forests in the extreme north. In 2019, the main cities by population are New York City, Los Angeles, Chicago, Houston, Phoenix, Philadelphia and San Antonio. The level of education is high with 91% of adults aged 25 to 64 having completed secondary education, 47% of the population 25 to 64 years old who had attained any postsecondary degree. The main occupations are administrative and trade jobs, followed by health, management, business, finance, transportation and construction.
Purchasing Power
The GDP per capita PPP in the United States is 65,118.358 USD in 2019. According to the Bureau of Labor Statistics (BLS), the median wage for workers in the United States in the first quarter of 2020 was $957 per week or $49,764 per year. Purchasing power has increased recently, thanks to the increase in promotions and the use of credit. In the United States, the average household net-adjusted disposable income per capita is USD 45 284 a year, much higher than the OECD average of USD 33 604 a year, and the highest figure in the OECD. The personal consumption expenditure grew by 1.4% in September 2020, according to the Bureau of Economic Analysis. The Gini index on income inequality has stabilized at 0.41 since 2016. Overall, women earn just 81.4% the amount their male counterparts make, according to data from the Bureau of Labor Statistics for the second quarter of 2019. Wages in the east of the country are higher, while the south has the lowest wages. Asian-born households have the highest median wage, ahead of the non-Hispanic white population, the Hispanic population and the Afro-American population.
Consumer Behaviour
The United States is a very developed consumer society. While the population had a fairly high level of confidence in the past, the financial crisis first and the Coronavirus crisis later has pushed consumers to move towards lower-priced products. US consumers are more likely to pay attention to promotions and compare prices. The most popular supermarkets are Walmart and Sam's Club (more than a fifth of market share), followed by Kroger, Albertsons, Costco etc. Americans are generally willing to travel to major shopping centres. Most US consumers shop and buy on various channels, making the whole buying process long and complicated. For retailers, omni-channel selling - both online and offline - is key to success. During the peak of the COVID-19 pandemic, the second quarter of 2020, consumers spent $200.72 billion online with US retailers, up 44.4% from $138.96 billion in the same quarter of the previous year, according to the Department of Commerce.
The Conference Board’s index - index of consumer confidence - increased 15.5 points to 101.8 in September 2020 from August’s 86.3, according to Bloomberg. Generally, consumers are open to international companies and brands. According to McKinsey's latest report dated August 2020, the COVID-19 crisis has caused a surge in new activity, with an astonishing 75% of US consumers experiencing new purchasing behaviour in response to economic pressures, shop closures and changing priorities. Overall, 36 per cent of consumers have tried a new product brand and 25 per cent have incorporating a new private-label brand. Among consumers who have tried different brands, 73% intend to continue to incorporate the new brands into their routines. Gen Z and high income consumers are more inclined to change brands. Social networks have a large impact on consumers, 34% of Generation Z make purchases through social media every single day. Moreover, social media creates opportunities for virtually every type of brand to engage with their customers: food and foodservice brands have the highest overall social media following, with clothing and footwear companies in second place. When buying online, almost 80% of US consumers indicated that they preferred using a debit or credit card. Some 71% of consumers are worried about big data and 34% do not trust tech companies with regard to personal data.

Among consumer trends in the United States 'Made in America' is an important issue. Some 70% of Americans consider it significant to buy American products. Also, responsible consumption is increasingly attracting consumers who want sustainable, transparent, clean products.  Some 48% of consumers say they want to change their habits to reduce their impact on the environment. Young people are even more concerned about the subject and are willing to pay more to reduce their footprint. The second-hand market is constantly growing and buying and selling websites are multiplying. The $29 billion secondhand apparel market will nearly double to $51 billion by 2023 according to the ThredUp report. The collaborative economy is highly developed in the United States, especially in large cities.
Consumer Recourse to Credit
In the United States, the use of credit and debit cards is widespread. With card payments, around 70% is made by debit card, while credit cards are used in the remaining 30%. However, the amount of purchases made with credit cards is higher. Household debt has increased significantly in recent years and exceeds the pre-crisis level. In the second half of 2018, outstanding debt reached $ 13.29 trillion. More and more Americans are in debt (about 73% of the population). On average, an American has $ 137,000 in debt, and 38,000 if one withdraws mortgages. Consumer credit is used primarily to finance vehicles, education and sustainable products. The rise in defaults, threatening financial stability, and a possible rise in interest rates could have a negative impact on consumer credit.
Growing Sectors
Leisure, culture, education, vehicles, transport services, tools,  equipment for the home and garden, newspapers, books and stationery, holidays, home textiles, household crockery and utensils, alcoholic beverages.
Consumers Associations
US Government , Lodge a Consumer Complaint
CR , Consumer Association
CFA , Federation of American Consumers
 

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Importing & Distributing

Import Procedures
U.S. Customs and Border Protection (CBP) import requirements apply to anyone bringing foreign items into the United States. While CBP does not require an importer to have a license or permit to import goods from a foreign country, any item crossing the border into the United States is subject to customs clearance and customs duties unless specifically exempted. To obtain customs clearance from CBP, importers and their goods must take the necessary entry, examination, valuation, classification and clearance measures.
Among the documents needed to import there are:

  • Entry Manifest or Application and Special Permit for Immediate Delivery or other form of merchandise release required by the port director,
  • Evidence of right to make entry,
  • Commercial invoice or a pro forma invoice when the commercial invoice cannot be produced,
  • Packing lists,
  • Other documents necessary to determine merchandise admissibility.

Import procedures are subject to a specific process. For more information, consult Tips for New Importers on CBP's Website.
Further information on import and customs clearance procedure is available on the website of U.S. Customs and Border Protection.

Specific Import Procedures
FDA is the federal agency responsible for ensuring that foods are safe, wholesome and sanitary; human and veterinary drugs, biological products, and medical devices are safe and effective; cosmetics are safe; and electronic products that emit radiation are safe.
Distribution channels
The U.S. is the undisputed world leader of the retail industry: of the world's ten largest retail companies, five are based in the country. According to the latest report by PwC and the National Retail Federation (NRF) - released on May 2020 - the industry’s total GDP impact was $3.9 trillion, accounting for 18.7 percent of US GDP in 2018. The retail industry directly provided 32 million jobs for American workers (accounting for 16.0 percent of the national total), making it the largest private-sector employer in the country. Due to the global Covid-19 pandemic, retail sales in the US could be down by at least 6.5% in 2020, according to new estimates by market research firm Euromonitor. Also according to Euromonitor's analysis, companies that will be less affected by the Coronavirus crisis include food retailers, e-commerce players such as Amazon, third-party delivery platforms and major food brands. Retailers were among the biggest winners of the first complete rewriting of federal tax law in three decades. According to the NRF, the Tax Cuts and Jobs Act has helped revive the economy by eliminating a wide range of tax benefits for businesses and using the money saved to lower rates for all businesses, large and small. The corporate tax rate has been reduced to 21% from 35%, and small business “pass throughs” have received a 20% deduction. The measure also provided relief for middle-class taxpayers. Actually, the retail industry is expected to save $175 billion due to the reduction in the corporate tax rate, according to the NRF. Although it's too early to measure the direct benefits, some retailers have already announced investments in response to the tax cut, like an increase of the minimum salary to $11/hour for their employees.

The U.S. is the ultimate test market for exporters and is open to all kinds of new products and technologies. However, it is very spread out geographically and new products are subject to intense competition. The U.S. market is thus very demanding and requires a considerable amount of preparation, groundwork and long-term consistency. Numerous opportunities for growth exist in the U.S. retail market for retail providers of all sizes, including individual direct marketers or direct sellers, small- to medium-sized franchise unit owners, and large "big-box" store operators.
Distribution market players

The supermarket & Grocery stores industry grew at a rate of 1%, reaching $654.6 billion in 2019. Market segmentation is drawn along various lines, including age group, ethnic group and even social and religious groups, which has forced distributors to adapt their strategies to this situation. One of the most marked consequences of this absence of homogeneity is the emergence in the past few years of "Speciality Stores" (Home Depot, Best Buy, etc.), which currently represent 11% of retail sales. In fact, American consumers stand out for their demanding nature, the importance they attach to price and their product disloyalty. It is thus incumbent upon distributors to continuously adapt themselves to the market and to engage in well-targeted marketing efforts in order to win consumer loyalty. According to the latest figures by USDA, grocery stores, including supermarkets and smaller grocery stores (except convenience stores) accounted for the largest share of store sales (92.2 percent), followed by convenience stores without gasoline (4.5 percent). Specialized food stores, including meat and seafood markets, produce markets, retail bakeries, and candy and nut stores, accounted for the remaining 3.3 percent of the total. According to NRF latest data, the main retailers in US are:

  • Walmart, with a turnover of $ 387.66 billions in retail sales
  • Amazon.com ($120.93 billion)
  • The Kroger Co ($119.70 billion)
  • Costco ($101.43 billion)
Retail Sector Organisations
National Retail Federation
Convenience Distribution Association (CDA)
International Council Shopping Centres
The Association for Convenience and Fuel Retailing (NACS)

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Operating a Business

Type of companies

Sole proprietorship
Number of partners: One person only.
Capital (max/min): No minimum legal capital required.
Shareholders and liability: The owner is liable for the company's debt.
General Partnership
Number of partners: No limit on the number of partners.
Capital (max/min): No minimum legal capital required.
Shareholders and liability: The General Partner is personally liable, with no limitation, for the company's debts and obligations.
Limited Partnership
Number of partners: In addition of general partners there is one or more limited partners.
Capital (max/min): No minimum legal capital required.
Shareholders and liability: The general partner has unlimited liability for the debt, whereas any limited partners have limited liability up to the amount of their investment.
Public Company
Number of partners: No limit on the number of partners.
Capital (max/min): No minimum legal capital required.
Shareholders and liability: Liability is limited to the value of the capital contributed.
Limited Liability Corporation or LLC
Number of partners: No limit on the number of partners.
Capital (max/min): No minimum legal capital required.
Shareholders and liability: Liability is limited to the value of the capital contributed.
 
Setting Up a Company United States OECD
Procedures (number) 6.0 5.2
Time (days) 4.2 9.5

Source: Doing Business - Latest available data.

 

Cost of Labour

Minimum Wage
The minimum wage varies depending on the States and activity sectors. The federal minimum wage provisions are contained in the Fair Labor Standards Act (FLSA). The federal minimum wage is $7.25 per hour effective July 24, 2009.
Average Wage
According to the Bureau of Labor Statistics (BLS), the median wage for workers in the United States in the first quarter of 2020 was $957 per week or $49,764 per year.
Social Contributions
Social Security Contributions Paid By Employers: OASDI (handicap, disability, old age; 6.2%, maximum annual earnings used to calculate contributions are $132,900) + Medicare (1.45%) + FUTA (unemployment at the federal level; 6% on first USD 7,000 and applicable for tax credit) + SUTA (unemployment at each state level; varies across states)
Social Security Contributions Paid By Employees: OASDI (6.2%, maximum annual earnings used to calculate contributions are $132,900) + Medicare (1.45% + 0.9% if total wages above USD 200,000 annually)
 

Intellectual Property

National Organisations
United States Patent and Trademark Office and the U.S. Copyright Office
Regional Organisations
UNECA (UN Economic Commission for Africa)

APEC (Asian-Pacific Economic Cooperation)

UNECE (UN Economic Commission for Europe)

ECLAC (UN Ecomomic Commission for Latin America & the Caribean)

ESCWA (UN Ecomomic and Social Commission for Western Asia)

International Membership
Member of the WIPO (World Intellectual Property Organization)
Signatory to the Paris Convention For the Protection of Intellectual Property
Membership to the TRIPS agreement - Trade-Related Aspects of Intellectual Property Rights (TRIPS)
 

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Tax Rates

Consumption Taxes

Nature of the Tax
Sales Tax is levied by individual states at various rates. Forty-five states and the District of Columbia collect statewide sales taxes, while only 38 states collect local sales taxes and in some cases may rival or even exceed state rates. Consult the Tax Foundation website for more information.
Tax Rate
Sales and use tax rates vary from state to state and generally range from 2.9% to 7.25% at the state level. Most states also allow a "local option" that permits local jurisdictions, such as cities and counties, to impose an additional percentage on top of the state-level tax and to keep the related revenues. Such system may induce consumers to make cross-border purchases (for example through e-commerce).

The five states with the highest average combined state and local sales tax rates are Tennessee (9.53%), Louisiana (9.52%), Arkansas (9.51%), Washington (9.23%), and Alabama (9.22%). For the full list of applicable rates, click here.

Reduced Tax Rate
Varies by state and city (generally ranging from 2.9% to 7.25% at the state level). Click here for more information.
Other Consumption Taxes
Various consumption taxes may be levied at the local level. Click here for more information about other consumption taxes by states.

Excise duties are levied at federal and state level on a wide range of goods and activities, including gasoline and diesel fuel used for transportation, air transportation, wagering, foreign insurance, certain sporting goods, firearms and ammunition, alcohol, and tobacco.

 

Corporate Taxes

Company Tax
Federal corporate income tax is applied with a flat rate of 21% to the effectively connected income (ECI). State and local governments may also impose income taxes (generally ranging between 1% and 12%), thus the effective tax rate in each state. Click here for more information about corporate tax rates.
Tax Rate For Foreign Companies
A corporation organised or created in the United States under US law or under the law of any state is considered to any extent a domestic corporation, even in the case that it does no business or owns no property in the United States. For US law, a fixed place of business is considered as a permanent establishment in the country.
Capital Gains Taxation
A corporation’s capital gains are taxed at the same rates as ordinary income if shares are held for short-term (less than a year). Otherwise (shares held longer than a year), capital gains are taxed at a rate of 15% (20% for the highest tax bracket).

Capital losses can only be used to offset capital gains. An excess of capital losses over capital gains in a tax year may be carried back three years and carried forward five years.

Foreign companies are generally exempt from capital gains tax unless the gain is U.S.-sourced (from U.S. real property or through U.S. trade or business).

Main Allowable Deductions and Tax Credits
Deductions are available for specific domestic production activities, qualifying business expenses and depreciation, amortisation and losses. Normally, start-up expenditures can be amortised over a 15-year period. The cost of goodwill generally is capitalised and amortised over 15 years. Bad debt resulting from a trade or business may be deducted in the year the debt becomes worthless. Certain charitable contributions may be deducted, up to a limit of 10% of taxable income, and may be carried over to the fifteen succeeding years. State and municipal taxes imposed on businesses are deductible expenses. Fines and penalties are not deductible, unless they are paid for restitution or to come into compliance with the law. Special rules limit or deny deductions for interest, rents, or royalties paid on certain transactions.
Generally, net operating losses generated in tax years ending before 1 January 2018 may be carried back two years and, if not fully used, carried forward 20 years. Under the COVID-related CARES Act, losses arising in tax years beginning after December 31, 2017, and before January 1, 2021 may be carried back to each of the five tax years preceding the tax year of such loss.
Incentives are granted in the form of tax credits for R&D, energy-efficient appliances and electric motor vehicles.
Visit the IRS site for detailed information about available deductions in the U.S.
Other Corporate Taxes
Employers are liable for social security tax of 6.2% on the first USD 142,800 of wages paid to employees and for Medicare tax of 1.45% on all wages. The different States can impose further contributions.
Certain companies are subject to an accumulated earnings tax equal to 20% of "accumulated taxable income" if they are deemed to be accumulating earnings and profits for the purpose of avoiding shareholder personal income tax.

Importers, manufacturers, and sellers of ozone-depleting chemicals, or imported products manufactured using such chemicals, are subject to environmental taxes calculated per weight of the ODC.

In addition to federal taxes, state and municipal taxes vary from one state or community to another, including property taxes on real property, stamp duties, franchise taxes and taxes on the capital of a corporation.

For more details, consult the Tax Foundation website.

Other Domestic Resources
Internal Revenue Service (IRS)
Doing Business: U.S., to obtain a summary of taxes and mandatory contributions
 

Double Taxation Treaties

Countries With Whom a Double Taxation Treaty Have Been Signed
Double taxation treaty signed by the U.S.
Withholding Taxes
Dividends: 30% (paid to a non-resident), Interest: 30% (paid to a non-resident), Royalties: 30% (paid to a non-resident)
Different rates apply based on the treaties signed by the U.S with other countries to avoid double taxation.

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