As a thriving health startup headquartered outside of North America, you know the next great frontier: the US market. But before you make the move to the sunniest state with the closest flight time, there’s a lot more to keep in mind when it comes to strategically selecting the ideal location. Especially for foreign companies, making an informed decision can be a massive challenge: navigating tax advantages, healthcare regulatory compliance, and medical device risk management just to name a few!

As Founder and CEO of Preferred Depot, the premier white label operations management and consulting partner for medical device, biotech, and healthcare companies launching and growing in the US, understanding the best states for registering your health startup is a crucial part of what I do. So, to help international businesses like yours fully contemplate their choice of which US state to land their company in, I have detailed the key considerations not to miss before making the official decision.

Proximity

The first thing to consider when deciding which state to register your health startup in is proximity to the best opportunities for your business. One excellent option is the hub of innovation: California. This state provides access to one of the best startup scenes in the world, and most importantly, access to investors who are looking for businesses just like yours to take a chance on. Another incredibly valuable factor is proximity to key ports. The west coast is home to some of the best ports with the closest proximity to Asia. That means it can be much easier to ship items from Asia to the west coast as opposed to the east coast, saving valuable time and money in the long run.

Time Zones

The next factor that a health startup must consider is the time zone that their company will be operating in and, within that, their employees’ working hours. This is one of, if not the biggest advantage of having your healthcare operations on the west coast. Early shifts, like 6am, are 9am on the east coast. That means, if there happens to be a problem on the east coast, the west coast can ship at the last minute to save the day. In addition, for international companies the three additional hours can make a big difference for work efficiency. Keep in mind, it is already three hours later on the east coast when attempting communications from European or Middle Eastern time zones.

Customer Service

As mentioned above, the west coast can support the east coast by shipping products later in the day. This can make a sizable difference when it comes to truly delivering on excellent customer service — crucial to retaining customers. That means, it is important to consider how the location you select determines the culture of your customer service representation, their understanding of your customers, and the ease of communication. While some states may have excellent advantages in other respects, California happens to have a distinct advantage when it comes to accent familiarity. Most people from all around the world are familiar with a California accent and other communication habits due to exposure to pop culture films and TV shows. Therefore, selecting a state with internationally recognizable speech patterns and an upbeat speaking culture can be an excellent way to facilitate communication with people from all around the world.

Weather

A crucial factor that any startup must consider when deciding on location is the weather — and not just for the benefit of working in a beautiful place! Choosing a mild climate can facilitate 3PL processes. California, for example, has some of the most temperate weather in the United States. Other than the occasional earthquake, weather is not much of an issue in California. On the other hand, the east coast has almost three months with weather challenges, including warm and sunny Florida’s seasonal hurricanes. Plus, northern states can get very cold in the winter and some states, such as Arizona or Nevada, can experience scorching temperatures in the summer. Not to mention, states like Texas even have challenges with both extreme cold and hot weather! So, if you want to retain the best shipping opportunities all year long, choose your location carefully with climate in mind.

Finances

Perhaps the most important consideration for any startup is how to save money. For example, choosing a location strategically can make a big impact on your taxes. One key thing to keep in mind before you select a state to register your company in is that, for tax purposes, where you ship from can actually be more important than where your company is located. For example, if a company based in Delaware ships from Florida they have to pay Florida taxes. That is why it inevitably makes more sense to ship from a location that provides you with the best financial advantages whenever possible.

Compliance

As a foreign company, navigating healthcare regulatory compliance concerns can be an extremely difficult undertaking without the help of a skilled operations consulting and management team on the ground in the United States to assist you. For example, as a health startup, your company must register with the FDA. In addition, depending on the state, you may not be allowed to return devices for repair without the licenses to do those repairs. You might also need formal standard operating procedures to support your technology. For example, you need ISO certification to do this in California. This can be difficult to obtain and must be maintained every year. Luckily, if you choose to work with a healthcare operations management and consulting team that already has the necessary certifications and understanding of compliance concerns, this is one less thing that your business needs to worry about in order to thrive.

Risk Avoidance

Last but not least, your healthcare startup must consider which US state is best for their medical device risk management. If companies move to the United States without the proper operations and compliance measures in place, it can pose a very big risk to their livelihood. For example, they have to report to the FDA and if they find issues it can be detrimental. It can even mean closing the company, deporting products, and stopping sales in the US. Luckily, there are operations management and consulting teams such as Preferred Depot that exist to ensure your company’s processes are above board from day one.

At Preferred Depot, our purpose is to assist health startups like yours looking to launch or grow in the US. In our extensive experience, choosing which state to register our clients businesses in has often been crucial to their success. That is why Preferred Depot offers top notch operations management and startup consulting to assist with pivotal decisions like these. We transparently integrate within your company to protect your business’s best interests and help you get your life-changing technology into the hands of the people who need it all around the globe. To learn more about how Preferred Depot can help launch and grow your health startup in the US market, visit us at https://www.preferreddepot.com/.