South Carolina is known as the Palmetto State, it is formed of 46 counties and has an annual economic growth rate of 3.2% according to recent statistics. Located alongside the Atlantic Ocean coastline, South Carolina encourages the trading businesses with countries worldwide and welcomes the foreign investments in all important fields. We have prepared a general guide to company incorporation in South Carolina and we invite you to observe the main requirements when creating a company. We also mention that our team of company formation agents in USA can assist foreigners willing to enter the American business market through all kinds of firms and activities.

Forming an LLC in South Carolina

The most popular business structure in South Carolina is the limited liability company which can be registered with the Business Division of the Secretary of the State of South Carolina. The Articles of Association are the company’s main documents which are formed with complete information about the owners and their activities. The following details are mentioned by the Articles of Association:

• the name of the owners, their nationality and their citizenship;
• the name of the company after a verification in this sense;
• the business address of the company (the owner can control it from outside US);
• the activities and the purposes of such business in the American market;
• the name of the registered agent which act on behalf of the company.

Do I need an operating agreement?

Yes, an operating agreement is suggested at the time of opening a company in South Carolina. This is an internal document which offers information about the responsibilities of the owners, the voting rights, the capital contribution and details about how the dissolution of the company is made, if it is the case.

The EIN for South Carolina company

If you want to register a company in USA, including South Carolina, you need to observe and consider the requirements in this sense. The Employer Identification Number is the federal tax ID necessary for each company with establishments and activities in South Carolina and shows that the business pays the taxes imposed by the state. The Internal Revenue Service issues the EIN for companies in USA, through the local offices found in each American state.

What is the sales tax in South Carolina?

The sales tax in South Carolina is set at 6%. Municipalities of this state can collect their own sales tax which cannot exceed 1%. Besides that, the lodgings tax, the rental tax and the inheritance tax need to be considered when opening a company in South Carolina.

Do I need the services of an accounting firm?

Yes, an accounting firm in South Carolina can help foreign entrepreneurs deal with the requirements in this sense regarding the financial activities. Payroll, bookkeeping, the annual financial statements and tax minimization methods are only a few of the most representative accounting matters a company needs, whether it is established in South Carolina or in any other US state.

Create a website for your company in South Carolina

The advanced technology and the development of the e-commerce sector make investors and business persons consider placing the operations on the internet. Creating the company’s website will help the owner enter the market and promote his/her activities, the products and the services he/she offers. Using the social media channels will strengthen the business and will help the company find its position in the market.

Important facts about the economy in South Carolina

The agriculture is significantly developed in South Carolina, a state known for its tobacco, cotton, soybeans, rice and swine productions that take the export road for many years. There are numerous foreign enterprises with activities in South Carolina in automotive, tourism, textile or transportation, a few of the representative industries of this state. Columbia is the capital of South Carolina and a major business and financial hub sustained by varied investments. Greenville, Charleston, Rock Hill, Mount Pleasant and Beaufort are representative cities in South Carolina, where foreign investors can set up their firms.

South Carolina is an appealing business destination to international investors who would like to set up their operations in this American state. Even though the formalities of incorporation are quite simple, it is best to talk to our team of company formation specialists in USA and find out more about the requirements in this matter. You should also observe the tax structure and the rules in this sense, in agreement with the registered entity in South Carolina.

What is the sales tax rate in South Carolina?

The general sales tax imposed on products and services on the market in South Carolina is set at 6% rate, with the reference that cities of this state can collect their own sales tax not exceeding 1% rate.

What is the corporate tax rate in South Carolina?

The corporate income tax is set at a flat rate of 5% and applied to traditional corporations in South Carolina. Foreign investors should also pay attention to the corporation license tax that applies to S and C corporations in the form of a franchise tax based on the net worth. In other words, this kind of tax is based on the capital surplus at a rate of one dollar for each $1,000 and an additional charge of $15. Foreign entrepreneurs should know that according to the South Carolina Income Tax Act the “active trade or business income or loss” of a limited liability company is levied at a 3% tax rate.

Taxation on personal income in South Carolina

Residents in South Carolina are subject to 6-brackets taxation on personal incomes as seen in the following table:

Taxable Income Tax Rate

• Between $0 and $2,910: No tax
• Between $2,911 and $5,820: 3%
• Between $5,821 and $8,730: 4%
• Between $8,731 and $11,640: 5%
• Between $11,641 and $14,550: 6%
• More than $14,551: 7%

It is important to know what are the taxes for your company established in South Carolina and an accountant can provide the needed information in this direction. Also, we invite you to read the general guide to company incorporation in South Carolina and find out more about the ways in which you can register a business in this American state. If you would like to start a business in USA, we kindly invite you to get in touch with our team of consultants.

What is nexus?

If your primary business is set in South Carolina and you also have operations in other American states, you might have nexus, meaning that you need to pay the taxes in those states too. The same thing is available to corporations located in other states but generating money in South Carolina. We remind that each American state has its own taxation regime, therefore, it is recommended to talk to your accountant and fulfill the requirements in tax matters if you have nexus. You should also know that the South Carolina Department of Revenue oversees the activities of taxpayers in this state and provides the needed tax form for each kind of business.

Short facts about taxes in South Carolina

The local government in South Carolina collects and manages the property tax, in compliance with the rules and regulations of the Department of Revenue in this state. A tax rate of 4% of the market value applies to primary residences and on the agricultural properties of citizens in South Carolina. As for the personal properties in South Carolina, these are levied with a tax rate of 10% of the income tax depreciated value. Property tax exemptions apply to disabled persons or seniors above 65 years of age. South Carolina imposes an excise tax of 5% on boats, motor vehicles, and motorcycles. It is good to know that there is no inheritance tax in South Carolina.

As for the capital gains registered in South Carolina, these are levied in two different ways: the short-term capital gains created in less than a year are levied just like the normal taxable income earlier described. The long-term capital gains are subject to a specific exemption, meaning that there are no taxes on 44% of the net capital gain. The cigarette tax, the gas tax and the alcohol tax are important fees imposed by the government in South Carolina. Knowing the tax regime for each type of business structure in USA will help the international entrepreneurs decide on the suitable entity that suits most of their needs. Also, the USA company formation is subject to no harsh bureaucracy, however, we invite you to talk to our specialists.