Setting Up a US Company From the UK: Costs, Steps, and Requirements

Setting up a US company from the UK can give British entrepreneurs and UK-based businesses access to the world's largest economy, a broad customer market, US banking and payment infrastructure, and opportunities to establish a stronger commercial presence in North America.

A UK resident does not necessarily need to move to the United States to establish a US business. Foreign entrepreneurs can generally form a US company remotely, although the specific requirements depend on the state, business structure, industry, ownership arrangement, and whether the business is operating as an independent US company or as part of an existing UK corporate group.

For companies already established in Britain, setting up a US subsidiary of a UK company can also provide a structured way to expand into the American market while maintaining the UK parent as the group's primary entity.

Can You Set Up a US Company From the UK?

Yes. UK citizens, UK residents, and UK companies can generally establish a business entity in the United States, subject to applicable federal, state, and industry-specific requirements.

The United States does not generally require every company owner to be a US citizen or resident. A foreign entrepreneur can own a US company even when living outside the country.

However, forming a company is only one part of establishing a US business.

Depending on the business model, you may also need to consider:

• State registration
• Registered agent requirements
• Employer Identification Number (EIN)
• Business bank account
• Federal and state tax obligations
• Sales tax
• Payroll requirements
• Business licenses
• Beneficial ownership and corporate reporting requirements
• UK tax and reporting obligations
• US-UK tax treaty considerations

The appropriate structure therefore depends on what you plan to do in the United States rather than simply where you live.

Steps to Setting Up a US Company from the UK

Why Set Up a US Company From the UK?

For some UK entrepreneurs, establishing a US company can support international expansion without immediately creating a large physical operation in America.

Potential commercial reasons include:

Access to the US Market

The US offers a large consumer and business-to-business market. A US entity can make it easier to structure local commercial activities, contracts, invoicing, and partnerships.

International Expansion

A US company can become part of a wider international corporate structure alongside an existing UK business.

US Customers and Contracts

Some American customers, suppliers, platforms, or commercial partners may prefer working with a US-registered entity.

Payments and Business Infrastructure

A US entity may provide access to certain US-focused payment, banking, merchant, and business service options, although eligibility depends on the provider and the company's circumstances.

Investment and Fundraising

For startups targeting US investors, customers, or strategic partners, a US corporate structure may be considered as part of a broader fundraising strategy.

The suitability of a US company depends on the business's actual activities, ownership structure, tax position, and long-term plans.

Choosing the Right US Company Structure

Before setting up a US company from the UK, determine which entity type fits the intended business model.

The most common structures for foreign entrepreneurs include:

Limited Liability Company

An LLC is a popular structure for smaller businesses, consultants, online businesses, service providers, and entrepreneurs seeking a relatively flexible corporate structure.

An LLC can generally have one or more owners and can be owned by non-US persons, subject to applicable rules.

Its federal tax treatment can vary depending on ownership and elections made for tax purposes.

C Corporation

A C corporation is a separate legal entity that can be particularly relevant to companies seeking outside investment, issuing shares, or building a venture-backed structure.

US corporations can have foreign shareholders, although cross-border tax and reporting considerations may become more complex.

S Corporation

An S corporation generally has restrictions on shareholder eligibility. Nonresident aliens cannot be shareholders of an S corporation under US federal tax rules.

As a result, a UK-based entrepreneur should not automatically assume that an S corporation is available simply because it is a common US business structure.

US Subsidiary

An existing UK company may establish a US subsidiary rather than creating a completely independent business.

The subsidiary can operate as a separate legal entity while being owned by the UK parent.

This structure can be useful when the UK business is already established and the US operation is intended to form part of the same corporate group.

Establishing a US Subsidiary for a UK Company

Setting Up a US Subsidiary of a UK Company

Setting up a US subsidiary of a UK company involves establishing a US entity that is owned or controlled by the existing UK company.

The US subsidiary is legally separate from its UK parent, although the two entities are related through their ownership structure.

A simplified structure might look like:

UK Parent Company → US Subsidiary → US Operations

The US subsidiary may enter contracts, employ workers, maintain US accounts, invoice customers, and conduct other business activities according to its structure and registrations.

Why Use a US Subsidiary?

A subsidiary structure may be considered when a UK company wants to:

• Expand its operations into the US
• Hire US employees
• Sign US commercial contracts
• Establish a local operating entity
• Separate certain US liabilities from the UK parent
• Build a US presence while maintaining UK headquarters

However, the subsidiary creates additional accounting, tax, legal, and administrative responsibilities.

UK Company vs US Subsidiary

The UK parent remains a separate legal entity from the US subsidiary.

This means the group may need to manage:

• Intercompany agreements
• Transfer pricing
• Cross-border payments
• Management fees
• Intellectual property arrangements
• Consolidated financial reporting
• US tax filings
• UK tax reporting
• Currency considerations

For larger or more complex businesses, professional cross-border tax advice is particularly important before establishing the structure.

Setting Up a US Company From the UK Online

Setting up a US company from the UK online is possible for many business structures.

Much of the incorporation process can be handled remotely through a formation service, registered agent, attorney, or other authorized provider.

A typical online formation process may involve:

1. Choose the State

The first step is selecting the state in which to form the company.

Common choices among international entrepreneurs include states such as Delaware, Wyoming, and Florida, but there is no universally correct state.

The best state depends on:

• Where the business operates
• Where customers are located
• Whether employees will be hired
• Investor expectations
• State taxes
• Filing requirements
• Annual compliance
• Business activities

If the company actually operates in another state, forming an entity elsewhere does not necessarily eliminate the need to register in the operating state.

2. Select the Entity Type

Decide whether an LLC, corporation, or subsidiary structure is appropriate.

3. Choose a Company Name

The proposed name must comply with the selected state's naming rules and generally must be distinguishable from existing registered entities.

4. Appoint a Registered Agent

A US company generally needs a registered agent in its formation state.

For a UK-based owner without a US office, a professional registered agent can provide the required local address and receive official documents on behalf of the company.

5. File Formation Documents

The formation document depends on the entity type.

For example:

• LLC → Articles of Organization
• Corporation → Articles or Certificate of Incorporation

Once accepted by the state, the company becomes a legally recognized entity under the applicable state law.

6. Obtain an EIN

An Employer Identification Number (EIN) is issued by the Internal Revenue Service (IRS).

A foreign-owned US business may need an EIN for tax administration, banking, hiring, or other business activities.

Obtaining an EIN can involve additional procedures when the responsible party does not have a US Social Security number.

7. Open a Business Bank Account

Once the company has been formed and the necessary documentation is available, the owner can explore US business banking or payment providers.

However, company formation does not guarantee bank account approval.

Financial institutions may conduct their own due diligence and request information about:

• Owners
• Business activities
• Source of funds
• Expected transaction volume
• Customers
• Countries served
• Tax residency

8. Complete Additional Registrations

Depending on the business, additional registrations may include:

• State tax registration
• Sales tax registration
• Employer registration
• Local business licenses
• Industry-specific licenses

The exact requirements depend on where and how the company operates.

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

Tax Considerations for UK Owners

One of the most important issues when setting up a US company from the UK is understanding that incorporation and taxation are separate matters.

A US company may have federal, state, and local tax obligations depending on its activities and structure.

At the same time, the UK owner may continue to have UK tax and reporting obligations.

Potential cross-border considerations include:

• US federal income tax
• State income or franchise taxes
• Sales tax
• Payroll taxes
• Withholding tax
• UK corporation tax or personal tax
• Tax residence
• Permanent establishment issues
• Transfer pricing
• US-UK tax treaty provisions

The correct tax treatment depends on the entity structure, ownership, management, source of income, activities, and other facts.

A foreign-owned single-member LLC, for example, can have very different reporting considerations from a US C corporation owned by a UK company.

Professional Support for US Company Formation

For UK entrepreneurs and businesses entering the American market, company formation is only one part of establishing an effective cross-border structure.

The right approach may involve coordinating US incorporation, registered agent services, EIN applications, banking, accounting, tax compliance, and ongoing corporate administration.

Offshore Company Corp can assist international entrepreneurs with company formation and related corporate services, helping UK-based clients explore suitable structures for conducting business internationally.

Before establishing a US company, it is useful to prepare a clear overview of the intended business activities, ownership structure, target market, expected transactions, and countries involved. This information can help determine whether a standalone US company, a US subsidiary, or another structure is appropriate.

Disclaimer

This article is for general informational purposes only and does not constitute legal, tax, or financial advice. Readers should consult qualified professionals before establishing a US company or cross-border corporate structure.