Capitalising on the Atlantic alliance: The compliance roadmap for UK firms entering the US market
Countless books and articles have been written about the ‘special relationship’ between the United States and Great Britain, with the link between the two English-speaking nations particularly strong in the field of direct economic cooperation. UK firms objectively have better conditions for doing business in the US than most of their international competitors, but they still have to adhere to a wide array of regulations they may not even be aware of.
Facing unfamiliar rules can be a deterrent, to the point that some companies shy away from even attempting to expand across the ocean. That would be an overreaction, as these obstacles are far from insurmountable if the company is well prepared.
Here are some of the main areas where UK businesses must be very vigilant when casting an eye towards the US market:
Establishing corporate presence in the US
The most logical way to enter the US market and reap the full benefits of its economic power is to establish direct presence. By incorporating directly in the US, British companies can compete on a level field and avoid administrative complications. There are several legal forms that a US-based subsidiary can take, including Limited Liability Company, C-Corporation, etc.
Forming the legal entity is just half the job. It’s very important to register the subsidiary with the Internal Revenue Service and settle on a suitable taxation model. Depending on the chosen state and the realistic business model, the company may be expected to pay several types of duties such as sales tax, VAT, corporate tax, etc. on state and/or federal level.
Ensuring full respect for immigration rules
Whenever a company attempts to conquer a new market, it’s usually necessary to bring some of the top decision-makers and specialists over from the mother company. Since the United States takes enforcement of its visa rules very seriously, any personnel that needs to be stationed in the new office needs to have valid work visas covering the entire duration of their stay.
To qualify for those visas, employees will have to pass security checks and have spotless documentation confirming their education degrees, professional qualifications, etc. To handle this at scale, many businesses retain UK apostille services from a third-party agency that has a strong track record in assisting corporate travel to the US.
Follow federal and state employment laws
Hiring of local talent is another area of concern that must be treated with appropriate level of diligence. UK companies have to navigate a spider web of regulations in the US jurisdiction they enter on issues like minimum wage, non-discrimination, or dispute resolution even if they don’t have similar constraints back at home. When it comes to employment laws, there is no real alternative to adapting.
This is why it would be quite dangerous to rely on standard contract forms used in the UK. A better approach is to draft contracts that take US-specific concerns into account. This is one of the reasons why many UK firms seeking trans-Atlantic expansion are highly recommended to consult US attorneys with a wealth of experience in labour law.
Comply with data protection policies
Without a doubt, information is a vital resource in today’s world and also a very sensitive one. Data privacy is taken very seriously in the US, both to shield individuals from unwanted exposure and to prevent unfair competition between corporate rivals. This can come as a shock to some UK businesses, which may not be used to such strict controls surrounding business data.
To start with, UK firms need to make sure what exactly is written in the law and how it applies to them. Once the expectations are clear, they can proceed to name responsible persons and develop a framework for data filtering and selective obfuscation of personal information. Having a mechanism for dealing with complaints would be wise, too.