US Market Entry

The U.S. is one the world’s most attractive markets for foreign companies to establish operations.

International companies seeking to operate in the U.S. face significant challenges given the multiple layers of taxation in the United States. The choice of entity and manner of business operations can have a significant effect on the level and scope of U.S. taxes. International tax treaties often have a significant impact.

Help is at hand – CST Tax Advisors are U.S. market entry specialists.

For companies moving to the United States from the UK, Australia or Asia our U.S. advisory team is able to leverage their close relationships internationally for the benefit of our clients.

The US markets are strong and attractive to international business people. However, there are hurdles and challenges to entering the US market and setting up a business foundation to lead to success, particularly in relation to the multiple layers of taxation.

If you plan to have a physical business presence in the US, you will need to set up a business and comply with federal tax laws as well as the tax laws of the state in which you choose to business. If you are planning to sell goods through the internet or via a US wholesaler partner, you may not have to set up a business. It is always wise to get advice from an international tax specialist to make sure that you are making the right decisions to minimize your tax burden.

Choosing the Best Business Structure

In the US, businesses are typically set up as corporations, partnerships, or LLCs, depending on the needs and expectations of the owner. Each business structure is taxed slightly differently, so it is important to choose the best structure to meet your needs.

• Corporations are independent businesses and are subject to corporate tax on profits. Taxes are also paid on the dividends paid to shareholders which can result in double taxation. Some corporations are set up as S-corps, which can elect to be taxed like an LLC and considered a “pass through” entity.
• Partnerships are entities where two or more people agree to share the profits and losses of their business. The entity is treated as “pass through” and all profits are taxed at the personal level. The partners are considered personally liable for the business.
• LLCs or limited liability corporations are also treated as pass through entities, although the owner or owners are not liable for losses incurred by the business.

Choosing the Best State

Taxes are levied at both the federal and state level in the US. As such, you will want to select a state that has little to know state-level corporate tax. Nevada, Wyoming, Montana, and South Dakota are often popular choices for this reason. There are other considerations when selecting a state such as the availability of a skilled workforce, business regulations, and minimum wages. Companies also often take advantage of Delaware’s state tax regulations to minimize their tax burden.

Licenses and Visas

Depending on your intention to work in the US or to employ a board of directors and management team, you may need to apply for visas and certain licenses. You can find a list of the visas with guidance on the Department of Homeland Security website.

What Are the Steps to Set Up a Business in the US?

• Developing a relationship with a trusted accountant with international tax experience
• Register the business by reserving the company name and filing the company’s articles of organization and the company operating agreement.
• Apply for a federal employer identification number (EIN)
• Establish a registered agent
• Register to collect state sales tax
• Operations including finding appropriate property, hiring the right people, finding customers and clients

If you are ready to launch your business in the US markets, CST’s advisors are U.S. market entry specialists and excited to help you take your business to a new level. For companies moving to the United States from the UK, Australia or Asia our US advisory team is able to leverage their close relationships internationally for the benefit of our clients.