How to Incorporate a Business in the US from the UK

Setting up a business in the US creates enormous opportunities, even more so for UK entrepreneurs. With a huge market, great economy, and tax benefits, setting up an American company becomes tactical. Herein follows a step-by-step guide to set up a company in the United States of America from the United Kingdom in creating a company, creating a subsidiary in the US, finishing the process online, and the cost implications as a foreigner.

Read more: Why register a company in the US?

1. Setting Up a US Company from the UK

Setting up a company in the US from the UK is a great opportunity but requires planning and attention to legal requirements. Here is how it can be done:

Business Structure: There are two most common structures: LLCs and Corporations. Sometimes, the term Corporation is used as an umbrella to refer to an LLC, C-Corp, or S-Corp. An LLC offers flexibility in its operations and imposes less headache on management, while a C-Corporation is ideal for huge businesses that issue or raise capital.

Choose a state of incorporation: Delaware, Nevada, Wyoming are some of the most popular states to incorporate a business because of their corporation-friendly laws. Delaware is usually preferred by foreign entrepreneurs because of its highly developed system of law; however, other states like Nevada provide for certain other benefits, such as no state corporate income tax.

Register Your Business: For an LLC, you will be filing the Articles of Organization with the state where the business will operate, and for a corporation, it will be the Articles of Incorporation. These forms provide basic information about your business: its name, address, directors, and so on.

Get an EIN: You will also be required to have an Employer Identification Number, or EIN, for taxes, adding employees, and creating a business bank account. You can receive one free from the IRS online.

Registered Agent: Any business in the US requires a registered agent in the state it chooses to incorporate. They are responsible for accepting any legal or tax documents that may come to the company. Third-party registered agents are available for hire from many companies.

The above-mentioned steps will be able to help entrepreneurs from the UK to establish a company in the US without relocating to the United States. The essence of understanding the underlying process of establishing the legal entity provides them with a way of ensuring their business is law-abiding in the United States.

Steps to Setting Up a US Company from the UK

2. Setting up US subsidiary of uk company

Establishing a US Subsidiary for a UK Company

Setting up a US subsidiary of a UK company is a serious step toward expanding into one of the largest markets in the world. There are a number of important steps involved in this process, which need to be thoroughly understood and executed to ensure a successful launch. There are two important steps to set up a US subsidiary. Firstly, one must determine the right business structure based on one's business needs and/or legal requirements. Secondly, if the chosen structure requires filing with the US state and/or federal governments, one should go ahead and register the subsidiary.

In addition to that, setting up the US subsidiary of a UK company also entails strict observance of both US and UK tax laws. A company will be well-advised on the tax implications so that it will avoid double taxation or any other financial misfortune. The company may be able to open a business bank account in the US, obtain necessary permits or license for its operation depending on its industry, as well as employ local employees.

Other considerations in setting up a US subsidiary for a UK company are compliance with all the statutory provisions pertaining to employment law, data protection, and special legislation that regulates the specific trade or activity concerned. Realistically, the majority of such entities will be engaged in retaining lawyers and accountants with expertise in cross-border ventures to appreciate how such requirements will affect them. Through these steps, the incorporation of a subsidiary in the United States can thereby draw new customers to the business, add other revenue streams, and improve the business presence globally.

3. Setting Up a Company in the US by a Foreigner Cost

Cost of Setting Up a Company in the US as a Foreigner

Setting up a US company as a foreigner involves various costs, which vary depending on the type of company, the state of incorporation, and the services used. Here’s an overview of the key cost factors:

State Filing Fees: Filing fees vary by state. Delaware charges around $90 for filing the Articles of Incorporation, while states like California have higher fees due to stricter regulations. Fees range from $50 to $800 per state.

Registered Agent Fees: Hiring a registered agent is a legal requirement for foreign-owned US companies. Registered agent services typically cost between $100 and $300 annually.

Legal and Advisory Fees: Many entrepreneurs hire a lawyer or business consultant to help navigate legal and tax complexities. Fees can range from $500 to $5,000, depending on the business’s complexity.

Banking and Transaction Fees: Opening a US business bank account generally involves minimal setup costs, but transaction fees, especially for credit card processing, range from 2-3% per transaction. This can add up for businesses with high transaction volumes.

Annual Compliance Costs: US companies are required to file annual reports and pay state taxes. These costs vary by state and typically range from $200 to $1,000 annually.

Overall, the total cost of setting up a US company from the UK can range from $1,000 to $5,000, depending on the complexity and size of the business. This covers everything from initial setup to ongoing maintenance.

Conclusion

Setting up a US company from the UK is a viable and increasingly popular option for entrepreneurs seeking to expand their businesses internationally. By following the necessary steps, whether establishing a new company or a US subsidiary, UK businesses can tap into the vast US market. With the process available online and a clear understanding of the costs, UK entrepreneurs can establish a US presence quickly and efficiently.