For UK businesses, the United States still represents one of the most attractive markets in the world for obvious reasons. With a population of over 330 million and countless opportunities across industries, establishing a US presence can open big doors to growth and global recognition. But the American legal and regulatory landscape is complex, and a misstep can be very costly indeed.
To make your transition smoother, here are five key legal and compliance tips UK businesses should keep in mind that go beyond immigration law.
1. Choose the Right Business Structure
The first step to US expansion is deciding on the appropriate legal entity. Many foreign businesses opt for a C-Corporation or a Limited Liability Company (LLC), each offering unique advantages. A C-Corporation can attract investors more easily, while an LLC offers greater operational flexibility. Some states, such as Delaware, are renowned for their business-friendly laws and well-established corporate courts, making them a popular choice for incorporation. Selecting the right structure will determine your tax obligations, liability protection, and long-term scalability.
2. Navigate US Tax Obligations
The US tax system is multilayered, with federal, state, and local taxes that vary widely. For example, selling products online across multiple states may require registering for sales tax in several jurisdictions. UK businesses should also be mindful of tax treaties between the UK and the US, which are designed to prevent double taxation but require careful navigation. Consulting with US tax professionals early can help ensure compliance while avoiding penalties or unexpected liabilities.
3. Ensure Employment Law Compliance
Hiring employees in the US brings its own set of challenges. Businesses must comply with federal wage laws, state-specific labour rules, and health and safety requirements. In addition, securing the right visas for UK staff relocating to the US is essential. One critical area to address is worker classification: misclassifying employees as independent contractors can lead to significant fines and back payments. When expanding, it’s vital to understand how US employment law compliance differs from UK regulations and to put proper contracts and policies in place.
4. Protect Intellectual Property
Intellectual property (IP) rights are not automatically transferable between the UK and US. To safeguard your brand and innovations, register trademarks, copyrights, and patents with the United States Patent and Trademark Office (USPTO). Conduct thorough searches to ensure your brand name or logo doesn’t conflict with existing US registrations. Differences between UK and US IP laws make this step particularly important, as failing to protect your IP could leave your business exposed in a competitive market.
5. Understand Data Protection and Privacy Laws
Finally, Data protection has become a pressing issue for businesses operating internationally. In the US, laws differ by state, with the California Consumer Privacy Act (CCPA) among the strictest. UK businesses must also account for the invalidation of the EU-US Privacy Shield, which has reshaped how data can be transferred across borders. Implementing Standard Contractual Clauses (SCCs) or alternative safeguards is now essential for compliance.
Expanding Your Business to the US: 5 Legal and Compliance Tips You Should Consider