According to the U.S. Bureau of Economic Analysis (BEA) with a GDP of $ 29.35 trillion dollars in 2024, the US has been rightly called the land of opportunities. The US is the number one export market for the UK, so it is pretty valid to say that Americans are fans of British products. As an English entrepreneur, if you are looking to register a company in the USA from the UK, you are at the right place. English business owners often incorporate companies in the USA, because of the huge funding opportunities in the American markets.
But how do you register a company in the USA from the UK? Below we have curated the steps, including the legal requirements, costs, challenges and ways to overcome them to register a company in the USA.
At Commenda, we simplify the incorporation process, staying compliant with American regulations as you grow your business.
How to Register a Company in the USA from the United Kingdom in 8 Steps
- Choose a Business Structure and State: Select a structure (e.g., LLC, C-Corp) based on your business goals and decide the state of incorporation (Delaware and Wyoming are popular choices).
- Pick a Name: Check the USPTO trademark database, state availability, domain availability, and social media handles.
- Apply for EIN: Obtain an Employer Identification Number from the IRS for taxes and banking.
- Get Business Licenses: Research and apply for federal, state, or local permits as per your industry.
- Register with State Agencies: File incorporation documents and appoint a registered agent.
- Open a Business Bank Account: Separate business finances and choose banks supporting non-residents.
- Meet Compliance Requirements: File annual reports and stay updated on licenses and taxes.
- Understand Tax Obligations: Learn about federal, state, and sales taxes, consulting advisors if needed.
Time required: 2-8 weeks.
8 Steps to register a company in the USA from the United Kingdom
Expanding your business to the USA offers immense opportunities, including access to a vast consumer market and a diverse talent pool. However, the process of incorporating a company in the USA from the United Kingdom can seem cumbersome. Commenda simplifies the process into eight essential steps to help you register your business in the USA successfully.
Step 1: Choose a Business Structure and State of Incorporation
The first step in registering your company is selecting a legal structure that aligns with your business goals. Here are the common options:
C-Corp (C Corporation)
- C-Corporation is best for: Startups planning to raise venture capital or scale rapidly.
- Tax Treatment: Double taxation – the corporation pays taxes on profits, and shareholders pay taxes on dividends.
- Complexity: High; involves more regulations and reporting requirements.
LLC (Limited Liability Company)
- LLC is best for: Small businesses seeking flexibility and personal asset protection.
- Tax Treatment: Pass-through taxation – profits and losses are reported on the owner's personal tax return.
- Complexity: Moderate; simpler than a C-Corp but still requires compliance with state regulations.
S-Corp (S Corporation)
- S-Corp is best for: Small businesses that meet eligibility criteria and want pass-through taxation.
- Tax Treatment: Pass-through taxation, avoiding double taxation, but with restrictions like shareholder limits.
- Complexity: Moderate; must meet IRS eligibility criteria and adhere to specific operational rules.
For smaller operations with limited funding requirements, an LLC is generally the easiest and most cost-effective. For high-growth startups seeking external funding, C-Corps are preferred. Always seek professional advice while choosing the business structure.
Also selecting the state you want to register your company in becomes very crucial. Ideally, you should pick a state with a high demand for your product. Commenda suggests Wyoming and Delaware as the top choices because of their laws, policies, and privacy protections.
Step 2: Pick a Name for Your Business
Your business name is an integral part of your brand identity and must comply with U.S. regulations. The name should be unique and must not conflict with existing trademarks. Additionally, it must include identifiers such as “LLC” or “Inc.” based on your chosen business structure.
Before Finalizing Your Business Name:
- Check USPTO Trademark Database: Ensure your desired name isn’t already trademarked.
- Verify State Availability: Confirm that the name is not in use and can be registered in your chosen state.
- Search Domain Availability: Use platforms like GoDaddy, Namecheap, or Hostinger to secure a relevant domain name.
- Confirm Social Media Handle Availability: Check platforms like Instagram, Twitter, and LinkedIn to maintain consistency across your online presence.
Step 3: Apply for an EIN (Employer Identification Number)
An Employer Identification Number (EIN) is like a social security number for businesses. Compare it with the Company Registration Number (CRN) in the UK. The EIN is required for filing taxes, opening a business bank account, and hiring employees.
Applying for an EIN is straightforward. Visit the IRS website and submit Form SS-4 online. While U.S. citizens can complete the process instantly, non-residents may face additional steps, especially if they lack a Social Security Number.
Step 4: Apply for Business Licenses
Depending on the nature of your business, you may need federal, state, or local licenses to operate legally. For instance, food businesses typically require health permits, while retailers may need sales tax permits. Licenses vary by industry and state, so research your specific requirements thoroughly.
To identify the necessary licenses, visit the Small Business Administration (SBA) website or consult with your state’s Secretary of State office or Department of Revenue. Apply early to prevent operational delays, since the license approval may take several weeks.
Step 5: Register with State Agencies
State registration is a critical step in incorporating your company. The requirements vary based on the state where you choose to register.
To register, file the incorporation documents (like, Articles of Organization) with the state’s Secretary of State office. You will also need to appoint a registered agent—a person or entity authorized to receive legal documents on your behalf. File for federal, local and state taxes as well. Depending on your industry, you may have to obtain some types of insurance.
Step 6: Open a Business Bank Account
Having a business bank account is crucial for keeping personal and business transactions separate. It simplifies tax reporting, helps protect personal assets, and establishes your business’s credibility.
Several banks offer services for non-resident business owners. Choose one that suits your needs. Many banks require an in-person visit for account verification, but some offer remote setup options.
Step 7: Understand Your Compliance Requirements
Compliance typically involves filing annual reports, renewing licenses, and meeting tax obligations. Each state has its own requirements, so understanding them in advance can save you time and penalties.
Compliance violations can leave a huge black mark on a company’s reputation. Hence, regular audits of your compliance status must be carried out. Also, many partners, investors and even customers want the businesses they deal with meet these compliance criteria. See how Commenda’s Compliance Monitor makes it easy!
Step 8: Understand Your Tax Obligations
In the UK, businesses are subject to a flat corporate tax rate of 25%, with no additional regional taxes. The USA, on the other hand, has a federal corporate tax rate of 21% and varying state-level taxes depending on where the business is registered. While UK businesses get the advantage of streamlined VAT processes, the USA has a complex system of sales taxes, which differ by each state and sometimes even local jurisdictions.
Consulting tax advisors from Commenda can help you understand these obligations.
Commenda specializes in helping English entrepreneurs like you on how to incorporate your business in the USA. From obtaining an EIN to ensuring compliance, we’ve got you covered. Reach out to us today to start your journey!
What Are the Requirements to Start an American Company from the United Kingdom?
Business incorporation in the USA from the United Kingdom needs precise documentation requirements. Below’s a breakdown to guide you through the essentials:
- A Registered U.S. Address or Registered Agent:
A physical U.S. address is necessary for incorporation. This doesn’t have to be an operational office, it could be a virtual address for official correspondence. Also, appointing a registered agent in the state you wish to incorporate is legally required. The agent acts as a person of contact for receiving legal and tax documents on behalf of the company.
- Employer Identification Number (EIN) :
The EIN, issued by the IRS, is a unique identifier for tax purposes. It’s equivalent to the UK's CRN and is crucial for opening a U.S. business bank account, hiring employees, and filing taxes.
- Identification Documents:
Non-residents need to provide their UK passport copy of all company directors for identity verification. In some cases, a visa may be requested, depending on your chosen business activity.
- Proof of Address:
Both for the registered agent and for the company owner(s), proof of address is often required. For English business owners to register a company in the USA, the Unique Taxpayer Reference (UTR) number serves as a solid proof of address.
- Articles of Incorporation:
The Articles of Incorporation (for corporations) or Articles of Organization (for LLCs) outline the company's name, purpose, structure, and details of directors or members. These documents are submitted to the Secretary of State during incorporation.
Satisfying the above requirements, entrepreneurs from the United Kingdom can establish a compliant and operational business in the USA, gaining access to one of the world’s largest markets.
What Does it Cost to Run an American Company?
Running a company in the US involves both upfront setup costs and recurring annual expenses. On an average, the first year running cost could be around $40,000 USD.
Starting Costs for Setting Up the Company in USA
The initial expenses for registering your company in the USA depend on factors like the state of registration and the business structure (LLC or C-Corp). Here’s an overview:
Annual Fees for Compliance and Taxes
Ongoing compliance and tax obligations vary based on the state and business structure. Here's what you can expect:
There may be additional costs involved, depending on the state of incorporation. Also, these costs are just an approximate estimate.
Opening a Business Bank Account in the US
Opening a business bank account in the US requires specific documentation and often an in-person visit. Also, it must be done within 4 weeks of incorporation.
Select a bank that aligns with your business needs. Major American banks like Chase, Bank of America, and Citibank offer corporate banking solutions. Consider what your needs are and fulfill the individual requirements like EIN, proof of address etc.
Overcoming Challenges in USA Company Incorporation from the United Kingdom
Incorporating a company in the USA as an English entrepreneur can be daunting due to regulatory, compliance, and tax complexities. Common Challenges include:
- Complex US Regulations: Understanding state-specific incorporation rules and filing requirements.
- Compliance Obligations: Managing ongoing compliance tasks like registered agent renewals, annual reports, and franchise taxes.
- Tax Responsibilities: Addressing federal and state tax filings as a non-resident, which requires expertise in American tax laws.
Commenda offers an end-to-end incorporation service curated for business owners from the UK, addressing every aspect of the process. From providing expert planning and guidance on selecting business structures, state of incorporation to handling all the boring paperwork, Commenda will be by your side. Post incorporation, Commenda ensures your business remains in good standing with annual filings and tax reporting.
How Does Commenda Help You in US Incorporations and Compliance?
Commenda simplifies the question of how to register a business in the USA from the UK, offering custom solutions for your business.
- Streamlined Onboarding
Commenda's platform provides an easy onboarding process for global entrepreneurs. With their expertise, setting up an American entity becomes seamless, even for first-time founders.
- Compliance Made Simple
Commenda’s CommendaOS ensures your business remains compliant, tracking deadlines and automating processes like sales tax filing across all 50 states.
- Affordable and Effective Solutions
Designed with English business owners in mind, Commenda offers cost-effective solutions, from incorporation to ongoing compliance support. You can monitor your global business activities through a unified dashboard, keeping all entities in good standing.
- End-to-End Support
With over 250 satisfied cross-border businesses, including startups and multinational corporations, Commenda assists with every step, including document preparation, compliance checks, and accounting integration. The team also provides access to pre-vetted accountants and legal experts, ensuring you meet American regulations without a sweat.
Conclusion
Incorporating in the USA from the UK offers many benefits, from a thriving business environment to a talented employee pool. If the business registration process feels complex, hiring the right legal and business advisors can smoothen it for you.
Start your American business journey today with Commenda. Our expert team provides end-to-end incorporation services, including legal and compliance support and sales tax filing. Schedule your free consultation to learn how we can help you establish your business in the US efficiently and compliantly.
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