There’s a lot to consider if you want to do this right…

For many UK companies, expanding a business into the USA represents a huge growth opportunity. The US market provides access to over 330 million consumers, a diverse economy, and significant potential for brand visibility and profit. However, setting up successfully in America requires navigating a different legal, financial, and cultural landscape. Understanding these nuances ensures your business not only enters the US market smoothly but thrives in it. Here’s what you need to consider when making the leap.

Choosing the right business structure in the USA

Unlike in the UK, where limited companies (Ltd.) and sole traders dominate, US businesses commonly operate as corporations (Inc.), limited liability companies (LLCs), or partnerships. Choosing the right structure matters significantly; affecting your tax obligations, liability protections, and administrative complexity. Corporations offer strong legal protection but often involve complex compliance requirements, while LLCs provide simplicity and flexibility similar to UK limited companies.

Understanding these structures and consulting with a US-based legal advisor can help you establish the most beneficial foundation for your business.

Navigating accounting differences: ASC 842 and Right-of-Use assets

One of the biggest adjustments for UK businesses setting up in the US involves accounting standards, particularly lease accounting. While UK companies follow IFRS 16, the US adheres to ASC 842 – a standard with distinct reporting requirements. Under ASC 842, leased items like office spaces, vehicles, or equipment must be reported on your balance sheet as right of use assets.

This means recognising both assets and lease liabilities clearly, impacting how your business’s financial health is presented to investors and lenders.

For businesses seeking expert support, working with an online accountant can simplify cross-border reporting and ensure compliance with both IFRS and ASC standards.

The key differences between IFRS 16 and ASC 842 include nuances in how lease terms are defined, lease modification handling, and presentation of lease expenses on income statements. Ensuring compliance requires careful tracking and accurate record-keeping, so many businesses use specialized lease accounting software to streamline this process and avoid costly mistakes.

Comparison of UK and US lease accounting standards

Factor	IFRS 16 (UK)	ASC 842 (USA)
Lease Recognition	Single lease accounting model	Dual classification (Finance/Operating)
Right-of-Use Assets	Capitalised as one category	Clearly separated finance & operating leases
Income Statement Impact	Depreciation & interest expense	Operating lease expense recorded separately
Lease Modifications	Simplified modifications process	Complex re-measurement & reporting rules

Understanding these accounting nuances will help your business maintain clarity and accuracy in financial reporting, essential for investor confidence and regulatory compliance.

Managing taxation and regulatory compliance

US tax codes differ greatly from the UK’s straightforward corporate taxation system. In America, businesses navigate federal, state, and sometimes city-level taxes, all of which vary considerably. Sales tax, payroll taxes, and corporate taxes must be carefully accounted for and filed according to local laws. Consulting with an experienced US accountant or tax specialist early on helps avoid errors that can lead to expensive penalties or audits.

Moreover, regulatory compliance varies by state and industry, impacting everything from product safety standards to employment practices. Familiarising yourself with these requirements ensures smooth operation and mitigates legal risks.

Hiring and managing employees

The employment landscape in the US differs significantly from the UK, particularly concerning employment laws, benefits, and workplace culture. Employment regulations often vary by state, covering areas like minimum wage, overtime pay, workers’ compensation, and anti-discrimination policies. Additionally, US businesses typically provide employee health insurance benefits – a key factor in attracting and retaining talent. Being mindful of these obligations and budgeting for them in advance can help you build a strong, committed workforce.

Leveraging local expertise and networks

Building a successful business in the US market often depends on leveraging local expertise. Establishing partnerships or collaborations with American businesses, advisors, or industry groups can provide invaluable insights and access to established networks. Joining local chambers of commerce or attending industry-specific conferences helps your company establish credibility, build relationships, and better understand consumer expectations and competitor strategies.

Protecting intellectual property in the US

One area often overlooked when expanding to the USA is intellectual property protection. Trademark and patent laws differ considerably from the UK, and failing to properly register your trademarks or innovations can leave your business vulnerable to infringement or costly legal battles. Before entering the US market, conduct thorough searches to ensure your brand names, logos, and product designs don’t conflict with existing US trademarks. Engage with an intellectual property lawyer early to secure registrations, patents, or copyrights, ensuring your brand and innovations are fully protected.

Understanding cultural and consumer differences

While the UK and US share many cultural similarities, consumer behaviour can vary significantly. American customers generally prioritise convenience, speed, and customer service more highly, often expecting prompt and proactive responses. Adapting your customer service approach to meet these expectations – such as implementing responsive online support or quick delivery options – can greatly enhance customer satisfaction. Additionally, adjusting product packaging, messaging, or pricing strategies to align with local preferences and expectations ensures your business resonates effectively with American consumers.

Securing reliable logistics and supply chains

Logistics and supply chains present unique challenges in the US, given the country’s vast geographic spread and varied infrastructure. Establishing reliable, efficient distribution networks is crucial for success, particularly if your business involves physical products. Carefully evaluate shipping providers, warehouses, and fulfilment partners to ensure consistent delivery times and manageable costs. Investing in robust logistics software can further streamline your operations, providing visibility and control over inventory levels, order processing, and distribution – ultimately boosting customer satisfaction and business efficiency.

Marketing and running ads in the US

Advertising in the USA demands a tailored approach compared to UK campaigns. US consumers typically respond well to bold, direct marketing strategies emphasizing clear value propositions. Digital advertising platforms such as Google Ads, Facebook, and LinkedIn are popular, but businesses need to carefully manage their budgets and campaigns. One specific issue UK businesses might encounter is clickfraud, where competitors or malicious bots inflate your ad spend by repeatedly clicking ads without genuine interest. Investing in click fraud protection software and monitoring campaigns closely safeguards your advertising budget and ensures effective spend.

Additionally, cultural differences in humour, imagery, and messaging are important to acknowledge when designing ad content. Consider working with US-based marketing experts who understand local audiences and can craft resonant campaigns.

Read more: Do you run a business? Are you ready for the digital future?

Final thoughts: positioning your UK business for success in the USA

Expanding your UK business into the American market offers enormous potential – but demands careful consideration and preparation. Navigating accounting differences like ASC 842, adapting your marketing strategy, and ensuring full regulatory compliance are essential steps. By proactively addressing these factors, seeking professional advice where necessary, and leveraging local expertise, your UK business can achieve sustainable growth and success in the dynamic and rewarding US marketplace.