With a GDP worth 29.18 trillion U.S dollars recorded in 2024, there is lots of profit to be made from setting up a business in the USA. Over the past 25+ years, Workwell Global has been helping businesses enter and hire employees in the USA. During that time, we’ve had our fair share of questions. Before we jump into the 6 steps to setting up a business in the US from the UK, it’s important we tell you why the USA is an attractive destination for ambitious business leaders aiming to be industry leaders.
Why Should UK Companies Set Up Business In The US?
Accelearate Global Growth In The US?
With the global GDP reaching 111.33 trillion USD in 2024, the US dominates this figure and leads with being worth 29.18 trillion USD, meaning there is lots of profit to be made when setting up a business in the USA. As the number one export market for UK companies, it’s fair to say, the United States are a fan of British produce and service, so if you’re already exporting products into the USA, there’s a good chance you will be victorious when you expand there. Businesses that are successful in the USA can accelerate global growth dramatically, which can increase their valuation and lead to more investment opportunities.
Global Leaders For Top Industries In Business
The USA is a global leader in almost every industry. If you own a financial business, to make it to the top, you are likely to dream of occupying an office in the financial capital of the world, New York. Likewise, if you operate within the tech sector, Silicon Valley, California is the ultimate tech hub for innovative startups. If you want to take your operations to the next level, setting up a business in the US can elevate your chances of global domination.
Attract Top Talent In The USA
Finding the right talent to accelerate and enhance the services, can often be a struggle when restricted to one location. Whether you specialise in IT, creative industries, or manufacturing you’ll be sure to find a state that encapsulates the best talent for your chosen industry.
The influence the USA has on all global industries, and the amount of Fortune 500 companies, attracts the brightest talent, readily available for work. World leading colleges and universities help fuel highly skilled graduates into the local community.
No matter what location you choose when setting up a business in the USA, you’re sure to find ambitious talent to propel your goals forward. Ok, by now we know you get it, the USA is great for business. Let’s stop talking about the reasons to do business there and get straight into the how.
How To Set Up A Business In The USA?
Whether you are in the process or thinking about setting up a business in the USA, from our experience working with businesses entering the market for the first time, we recommend following the below steps for a successful set up.
1) Conduct Market Research Before Doing Business In The USA
Before you pack your bags and cross the Atlantic, conducting thorough US market research is crucial. The US is a huge place, so you must first understand the market and tailor your offerings accordingly. Set up in one state or city, with one niche service offering, backed by research that there is a demand for your services.
From Workwell Globals experience, working with UK companies doing business in the US, we always recommend starting small. Building a bank of first-hand research, will help you identify if people are interested in your offering, outline any key information about your client base, and experience what it’s like to operate in the US.
Next, you’ll need to identify your target audience, competition, and trusted partners to help your US business expansion. The political and economic climate in the USA is ever changing, consequently so are the laws and other regulations you must follow. This strategy not only decreases risks but helps aid business strategies and decisions.
Here are a few things that you should take into consideration before conducting your research.
- Product or service demand (Drill down to states/cities)
- USA GDP per capita
- State and city taxes
- Common business trends
- The cost of living
- USA competitors
- Company survival rates
- Is there suitable talent within your niche?
- Salary expectations
- Office costs
- Marketing and sales strategy
- Transferring you or your employees to the US
For more information, view the US Market Research Checklist with guidance on entering the US market from the UK.
2) Pick A State That Has High Demand For Your Business
Choosing the right state for your business should be influenced by the demand for your product or service. For example, should you wish to source high quality IT talent or want to be engulfed in a tech hub, California might be for you. Similarly, if you’re selling products within the tourism industry, a holiday hotspot like Florida may be the perfect location.
Regarding legal concerns when setting up a business in the US from the UK, filings are processed very quickly in Delaware. Due to their business-friendly legal system, corporations registered in the state do not have to pay income tax. There is also the presence of a corporation court, where only corporation cases are handled, meaning that Delaware in a top contender for business to incorporate in.
IBISWorld hosts a comprehensive catalog library of research on each consumer goods and service sector in the USA, breaking down business demand per location, demographics, barriers to entry and much more, to assist with your research.
At Workwell Global, we believe you should choose a state where your business will flourish in the most cost-effective way. There are a few considerations when picking the best state.
- Demographics – Segment your potential USA customers and/or employees.
- Requirements of your supply chain – Do you need to be close to an airport or coastal shipping routes?
- Competition – Reserarch competitor businesses operating in your chosen state and city.
- Overhead Costs – Will you purchase a property or rent office space? What are employee salaries in your chosen state? What about utilities, corporation taxes, living costs? All additional costs to consider.
- Taxes – Research state and local taxes you need to pay.
- Quality considerations – Employee skill levels in the state/city, connectivity, the infrastructure, risks, the quality of life in your chosen area.
3) Register Your Business In The USA
Before you begin your expansion journey from the UK into the USA, you need to register your business. Choose a unique business name and trademark it. To check if your business name is credible, use the USA Patent and Trademark Office’s trademark database.
After that, you’ll need to decide what type of company you’re going to operate as. As a non-resident setting up a business in the USA, there are only two types of entities recognised.
Partnerships and Sole Proprieties aren’t as popular in the USA as they do not limit owners from liability. There are two common structures people typically register as when setting up a business in the USA:
- General Corporation – This requires you to pay federal and state income tax on your profits.
- Limited Liability Company (LLC) – This does not require you to pay federal or state income tax on your profits.
Once you have chosen the best structure for your business, you will need to get into the nitty gritty legal side of things. But you should designate a specific individual for that.
As a non-resident, it is advised to appoint the following positions when registering your USA business:
- A representative as the owner – The owner can be a non–resident.
- An individual as your officer – Can be a non-resident, but they also will be taking on the responsibility of overseeing your company’s operations.
- A registered expert – Regarding the legal nitty gritty, a representative outside your business will hold responsibility for that. As the registered expert they will receive and send legal documents on your business’ behalf.
4) Complete Tax Registrations In The USA
If you plan to do business in the USA from the UK, many of Workwell Global’s clients start out by hiring their first sales US person to build awareness of their business. To do this and legally pay US citizens, USA tax registrations required to.
Employer Indentification Number (EIN)
When paying USA employees, you’ll need a USA tax identification number, also known as an Employer Identification Number (EIN), filed on a federal level.
What Is A Tax Nexus?
A tax nexus is created if a business derives income within a state, owns capital assets there, has employees there, and more. Businesses must have a nexus in a state before they’re obligated to pay income tax or collect sales taxes there. If you choose to set up in multiple states, you will then need to file within each state you are doing business in.
Be Aware Of The Complex Tax System In The USA
Federal, state, and local taxes make the USA tax system more complex than many of its Western contemporaries. Employment taxes differ from state to state and can even vary by city within each state. When operating in a state, you’ll need to register with the department of revenue (tax authority) as well as ancillary labor agencies to open accounts to manage state unemployment tax and any other relevant aspects to your employer burden. So, if you plan on setting up a business in the USA and employing US citizens, you must apply for an Employer Taxpayer Identification Number.
Ensure Business Insurance Covers The USA
A common mistake companies doing business in the USA make is thinking that their UK business insurance covers claims in the US. However, most UK insurers will automatically exclude claims related to work carried out in the US under their standard terms. So if you’re working from your home office, enquire with your existing insurer to find out the terms and the cost for extending your business insurance policies to the US. Shop around with other insurers to determine the best coverage for your US business expansion.
It is also important to keep in mind that UK vs US contract law operates differently. It is recommended to update your UK business terms to honour US contract law before jumping into US deals. Luckily, we spoke to a US attorney on this matter to get you started.
5) Create A Virtual Shop Front When Setting Up A Business In The USA From The UK
Before setting up a business in the USA from the UK, we would recommend testing out the market before stepping foot on US soil. Many of our UK-based clients test setting up a business in the USA from the UK first to see if there is demand for their services, before committing to the financial risks that come with relocating . Some tips when setting up a business in the USA from the UK, include:
1. Get a Localised USA Phone Number
Easiest way to get ghosted by a client in the USA? Call them with a UK number they don’t recognise. There are lots of great businesses that can set you up with a US number, and even better they can give a number with the area code of your chosen target market.
Starting small and picking only one state to do business, will help you focus on your target demographic, and drill right down to the small details to build trust and increase business sales.
2. Open A USA Bank Account
Opening a bank account virtually is a simple step when setting up a business in the USA from the UK. It’s quick and easy with very little cost. You need the following documentation when beginning the process of opening a company USA bank account:
- Photo ID of the business director
- Proof of your USA business incorporation
- Your USA business license
- Your EIN number
- Proof of a USA business address
Many of our clients doing business in the USA from the UK use Wise, an online digital front, that allows you to set up a local account in the USA and beyond. Popular US banks include Bank of America, Chase (JP Morgan Chase), and Citibank. Setting up a US bank account typically allows you to open and access it on the same day too.
3. Register For A Virtual USA Address/PO Boxes
Coworking spaces like WeWork and Regus often have the option to buy a virtual address to add to your website to give the appearance of a footprint in your target location. Even better, a PO box in your target location will allow your USA clients to mail you checks as payment (which wildly is still very popular in America vs online payments).
4. Set Up A US Specific Website
You get the idea by now…if you’re pushing a USA product or service, it should be marketed and targeted to a specific audience. This is why when you’re setting up a business in the USA from the UK, a dedicated USA website should be on your to do list. This site should be targeted towards a US audience, by tailoring the language, pushing your best sellers and much more to appeal to them.
5. Change Your Linkedin Location
Make sure to change your location on LinkedIn. A small step, but one that makes all the difference. If you are contacting a prospective client in your state of choice, should your location still be within the UK or elsewhere… it will affect the likelihood of making a sale to your target customer, and could lead them to question how genuine your services are. Having a localised LinkedIn location and tailored content to that area will help build trust and your reputation within that area.
6. Business Development Strategies Our Client Impllemented When Setting Up A Business in the USA from the UK
In the video, Ben Broughton from Primis explains how his business managed to scale to the USA from the UK, by implementing a range of business development strategies such as:
- Evaluating their Target Audience
- Educating clients on their offering
- Having a stable Marketing Strategy
- Hosting multiple styles of Events (face to face or online events)
You too can achieve scaling your business to these heights by following his advice.
6) Hire USA Based Employees to Build Out Your Business
No business can start without the people. When hiring employees in the USA, there are several considerations to be aware of. When beginning to hire employees, it’s difficult to know where to start. Common practice when setting up a business in the USA from the UK, is to hire a USA-based sales representative as your first employee. This way, you’ll be able to build out your business in that state and test the market with very little risk. With over 25+ years experience, Workwell Global provides an employer of record service that has got you covered when it comes to the legal paperwork and payroll when hiring in the USA .
Know the basics of USA Employment before hiring employees
We might speak the same language; but when setting up a business in the USA from the UK, the US employment landscape and work culture differ considerably.
At Will Employment
In the USA there is At-will Employment meaning that employees and employers can terminate the employment contract at any given time. It is important for US employers to store clear evidence and documentation to support termination decisions
Healthcare Plans in the USA
In the USA healthcare is not provided by the government compared to the UK where it is universally provided via the NHS. In the USA employers must offer health benefits to employees who are contract or permanent and work over 30 hours per week. Typically, it is usually around 50% of the least expensive plan that will need to be covered by the employer.
Annual Leave
Annual Leave, which is referred to as ‘Paid Time Off’ (PTO) is another major difference between businesses in the USA vs the UK. In the US there is no legal requirement on a federal or state level for employers to provide PTO, unlike the generous holiday entitlements in the UK.
Social Security Numbers
Your USA employees will need to register themselves for Social Security Numbers (SSN) . This is essentially a tax identification number, that is uniquely given by the USA government to keep track of your lifetime earnings and the number of years worked. It can be used to accurately measure and calculate any benefit payments can be used when applying for credit cards or even opening a bank account.
Maternity Leave
Maternity leave in the US is not a requirement either. Federally women are not entitled to any paid maternity leave unless otherwise provided by applicable state law. There are eight states in which maternity leave will fall under state paid family leave laws.
Payroll USA Employees
It's common when setting up a business in the USA from the UK to use an Employer of Record for your payroll, especially when you have less than 50 employees. An Employer of Record allows you to payroll employees in any state. Removing all the barriers and legal complications and employment requirements that can come along.
Larger Salaries in USA vs UK
When hiring in the USA, you will need to prepare to pay larger salaries to your employees. Although each state differs, you can be guaranteed no matter where you relocate to the salaries will be higher.
Research USA Visas
UK business owners may be able to travel to the US on an ESTA to attend conferences, pitch for an investment or scope out the best state to live in. But a few days on your laptop answering emails in a café would be considered work of which a work visa would be required.
Make Your US Business a Reality
Setting up a business in the USA can at first seem intimidating, but with the help of Workwell Global’ US Expansion Consultants, it can be a walk in the park.
As a specialized US Employer Of Record, we help you when setting up a business in the USA from the UK by removing the complexities associated with USA employment.
We become the legal employer of your US employees, taking care of payroll, USA healthcare benefit plans, employment compliance per state, HR queries, and back-office processes. This empowers you with freedom to focus on building your dream USA business. Ready to get started?
Disclaimer: The information provided here does not, and is not intended to, constitute legal advice. Instead, the information and content available are for general informational purposes only.