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INSIGHTS

Doing business in the US.

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Doing business in the US

How to successfully expand in the US market.

The United States is a large, thriving market that offers exciting opportunities for businesses big and small. Yet, tapping into these opportunities requires strategic planning for successful US market entry. From grasping the market size and potential to setting up your US presence and building a team, there is a lot to consider before making the leap. As dedicated International Growth & Expansion Partners, we are committed to guiding businesses through the essential factors for a successful entry into the US market, ensuring companies can confidently expand and seize the vast opportunities that the US offers.

Why the US?

The appeal of expanding international businesses to the United States is undeniable. Holding the world’s largest economy in the world with a GDP of 25 trillion dollars and a population of 332 million, the US offers unparalleled opportunities for both domestic and foreign companies. Its unique advantages position America as a premier destination for businesses seeking success and a pivotal market to achieve high growth.

  • General ease of doing business in a business-friendly environment.
  • Fairly predictable regulatory framework & transparent legal set-up.
  • Highly educated and skilled workforce.
  • Ample access to capital.*


*Read more about navigating the US Capital Market in our article here.

Some hurdles to consider...

With all of the opportunities for business expansion in the US, it is crucial to acknowledge and address certain challenges beforehand. Understanding the intricate legal, regulatory and taxation landscapes is essential. This awareness empowers your company to proactively mitigate risks, leading to a smoother, more successful journey into the dynamic US market.

 

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RULES & REGULATIONS

The United States is a federation with 50 states. What this means is that there is a central government in place overseeing nationwide regulations. In addition to federal laws, each of the 50 states has its own specific laws governing various aspects of business operations, such as employment, taxation and more.

Businesses operating in the US must navigate both federal and state-level regulations to ensure compliance and mitigate potential risks. It’s crucial to stay informed about any changes or updates that may impact different industries or business practices.

Related: Navigating FinCEN's New Reporting Mandate

 

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INTRICATE TAX FRAMEWORK

Entering the US market presents a significant challenge in navigating its distinct tax landscape, which markedly differs from the systems found in European countries. Unlike Europe, where taxation is primarily centralized, the United States imposes taxes at multiple levels—federal, state and local—creating a complex web of regulations and obligations.

For European business owners eyeing expansion into the US, understanding the nuances of sales tax is paramount. Unlike many European countries that operate under a national value-added tax (VAT) system, the US adopts a decentralized approach, with sales tax administered independently by each state.

 

Being aware of US employment options & benefits.

One of the critical areas that need to be considered prior to establishing operations in the US lies within Employment Structure and Benefits. These areas are completely different than most European countries and require strategic navigation in order to attract top talent and not significantly impact a business’s bottom line. Here are a few key factors businesses need to consider before heading to the US.

Employement structure (icon)EMPLOYMENT STRUCTURE

In the US, there are a few different approaches to managing employment relationships, Direct Employment, Professional Employer Organizations (PEOs) and Contract Workers being the most common.

Each avenue has its own set of pros & cons and ultimately depends on the specific needs and goals of the business.

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AT-WILL EMPLOYMENT

Unlike many European countries, most US states follow the principle of at-will employment. This means that employment relationships can be terminated by either the employer or employee at any time, with or without cause. Due to this, it is imperative to compose comprehensive employment contracts that clearly outline the terms and conditions of employment.

Employee benefits (icon)BETTER BENEFITS FOR TOP TALENT

Offering competitive and comprehensive employment benefits can significantly contribute to attracting and retaining top talent in the US job market.

To do so, consider structuring a benefits package that covers health insurance, retirement plans (401(k)), Paid Time Off and Flexible Work Arrangements.

Setting up a business in the US.

Once all of the above factors have been considered and addressed, businesses are on track to set up their operation in the US. Fortunately, the process of forming a US entity (LLC, Corporation) is relatively easy and fast, especially when teaming up with a dependable corporate services provider (que: Amesto Global).

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STEP
1

Structure & location.

The initial parts of this process entail selecting a business structure and the state of formation. Each structure and state has different implications for taxation and regulations to be aware of. To best decide, here are some questions to consider:

  • Where will your business be located?​
  • Will you be hiring staff?​
  • What kind of product/service will you be selling?​
  • Do you plan on having office space?​
  • Where are your US customers located?​
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STEP
2

Incorporation.

Once the business structure and location are decided, it's time to incorporate the business. To do so, the necessary filing formation documents need to be gathered and submitted for US incorporation. Expect 1-2 weeks for this process.

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STEP
3

EIN.

Next, you will need to receive the new entity’s Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This is necessary for tax purposes, as well as opening a US Bank Account and other operational requirements.

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STEP
4

Bank account.

Once all documents are filed and the EIN has been obtained, a US bank account can be opened. This process can take up to 4-7 weeks depending on the nature of the business and plans for the US entity.

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CLIENT SUCCESS STORY

Swedish-based SaaS company scales operations in the US.

Our client is a Swedish-based B2B SaaS company who has recently started to scale their US operations. As they began to hire more US-based employees and increase their sales footprint within the market, they outgrew their previous provider and wished to bring on a partner that could scale alongside their own expansion plans. They called on us to be this partner and assist with their US growth and expansion plans.

Read more

Do's & dont's: know before you go.

  • Identify an in-country Director to speed up incorporation process & bank account opening

  • Outline a commercial strategy for your US operations

  • Offer additional benefits (healthcare benefits, 401k plans, flexible PTO, hybrid working model, etc.) to attract top-tier talent

  • Anticipate lengthy wait times for bank account opening

  • Consult your legal and tax advisors to avoid potential exposure issues

  • Ensure that Group policies are adopted as consistently as possible, where possible

  • Explore 3rd party software systems to eliminate manual processes and unscalable workflows

  • Set realistic timelines for hiring new employees and having an operational entity established

  • Deploy ex-Pats in new markets without considering Payroll & local knowledge

  • Set-up an operational entity without consulting your tax and legal advisors for potential structuring issues

  • Assume your HQ finance infrastructure (systems, integrations, etc.) will work seamlessly abroad

  • Use a wide range of different operational systems in multiple jurisdictions

  • Rely on your first hire to manage all aspects of your business in a new market (Sales, Operations, Growth, Accounting, Payroll, etc.)

  • Underestimate the importance of having the company’s commercial strategy ironed out

More resources.

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Sales strategies when entering the US

Uncover strategies from startup operation experts Francis Simowitz and Giulia Imperatrice of WEVE Acceleration and Phil Delvecchio and Rob Napoli (Founders of Hapday Group).
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Navigating the Digitalization of Accounting & Financial Reporting

Learn how companies can benefit from implementing digitalization and automation processes into daily US business operations.
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What to know about the Biden Tax Proposal when expanding to the US

Learn what you need to know from international tax experts, Joe Ciccarelli and Raymond Wynman of Global Tax Management (GTM).
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How about a complimentary
1-hour brainstorm session?

Let’s discuss your US expansion & growth strategy during a complimentary 1-hour brainstorm session. During the session, our team will discuss your specific business requirements and answer any questions you have about your US expansion journey. 

Book today

Download our US market entry checklist.

Ready to tackle the US market? Gain a competitive edge with our curated checklist of insights, designed to equip businesses with essential operational considerations before entering the US. Download your copy today!