Are you a business owner based in the UK but operating in the USA? Navigating compliance, legal, and beneficial ownership reporting requirements can be a daunting task, especially when dealing with international regulations. From understanding the Companies House in the UK to the Securities and Exchange Commission in the USA, it’s crucial to stay informed and compliant to avoid any potential legal issues. In this blog, we will explore the key differences and similarities between the two countries’ reporting requirements, helping you ensure that your business remains in good standing on both sides of the pond. So grab a cuppa and let’s dive into the world of cross-border business compliance!

Registration Requirements

The United States consists of 50 states and 5 territories, each with its own set of business regulations. To operate legally, businesses must adhere to both state-specific rules and federal laws.

State-Level Registration:

When establishing a business presence in the United States, businesses from United Kingdom must complete state-level registration in any state where significant business activities occur. This requirement typically applies if your company:

• Has a physical presence in the state
• Frequently meets with clients in the state
• Derives a significant portion of revenue from the state
• Has employees working in the state

Incorporating your English Company in the US

Even if none of the specific criteria apply, a English company must still choose a home state for registration when conducting business in the US. This involves forming a U.S. entity, such as a corporation, LLC, or other business structure, in that state. This registration ensures that the company is officially recognized and compliant with US regulations, regardless of its level of business activity in any individual state.

The newly formed U.S. entity will operate as a subsidiary of the foreign company. This means that while the U.S. entity is legally independent, it remains under the ownership and control of the parent company based in United Kingdom. This structure allows the company to conduct business in the US while maintaining its international headquarters.

We recommend using Northwest Registered Agent if your foreign company needs to incorporate. They offer expert guidance and can serve as a reliable registered agent for your business, ensuring compliance and smooth operations.

Federal Requirements

In addition to state requirements, English companies must also comply with federal regulations:

• Federal Tax ID: Obtain an Employer Identification Number (EIN) from the IRS. This number is essential for tax reporting and opening U.S. bank accounts.
• Industry Regulations: Companies may need to follow specific federal regulations depending on the industry. For example:
• Import/Export Laws: If the company is involved in importing or exporting goods, it must meet U.S. customs regulations. This includes adhering to rules for tariffs, duties, and necessary documentation.

Beneficial Ownership Information Reporting Requirements

For English businesses conducting operations in the U.S., adhering to Beneficial Ownership Information Reporting (BOIR) requirements is crucial. The Corporate Transparency Act mandates that companies disclose the individuals who own or control them. This applies to most entities, including those that are incorporated or registered in any U.S. state. The goal is to enhance transparency and combat illicit activities such as money laundering and terrorism financing.

A beneficial owner is an individual who controls the company or owns 25% or more of its shares, either directly or indirectly. For compliance with BOIR requirements, businesses must report information about these individuals, including their names, addresses, and identification details. Failure to file this report can result in significant penalties and legal consequences. Therefore, companies from United Kingdom need to ensure they meet these reporting obligations promptly and accurately.

For your convenience, you can file your Beneficial Ownership Information Report directly on our website. Click here to complete the process in just a few minutes and ensure your business complies with U.S. regulations.

Additional Considerations for English Businesses:

Tax Treaties

The tax treaty between the United States and the United Kingdom offers significant advantages for businesses operating across both countries. This agreement helps prevent double taxation, reduces withholding taxes on cross-border payments, and provides clarity on tax residency issues. By utilizing the provisions outlined in the treaty, UK businesses can potentially lower their overall tax burden and streamline their operations in the US market. For more detailed information about the specific articles and protocols of the US-UK tax treaty, click here to access the official IRS documents.

Trade Considerations

As a UK business looking to trade with the USA, it’s crucial to stay informed about the current trade landscape. While there isn’t a comprehensive free trade agreement between the UK and the USA, both countries are engaged in ongoing negotiations to strengthen their trade relationship. In the meantime, it’s essential to be aware of industry-specific regulations that may affect your particular business. These can vary widely depending on the nature of your products or services, covering areas such as safety standards, labeling requirements, and import/export restrictions. It’s advisable to consult with trade experts or legal professionals who specialize in international commerce to ensure compliance with all relevant regulations. Additionally, keep an eye on any developments in trade talks between the two nations, as new agreements could potentially simplify trade processes or offer more favorable terms in the future.

Your Path to Compliance: Key Takeaways for English Businesses in the U.S.

Operating a English business within the USA requires careful attention to legal obligations, from establishing your home state to incorporating and filing a beneficial ownership report. Meeting these requirements is essential for ensuring compliance and securing your business’s success in the American market. By understanding and adhering to these steps, you can confidently navigate the complexities of doing business in the U.S. and focus on growing your enterprise.

Ready to get started? Click here to file your BOIR in just a few short minutes. We make the process easy, fast, and secure so you can focus on what matters—your business.