Over half of UK SMES wish to sell their services in the US. Around 27% of UK businesses were planning to target the huge American market in 2024 alone.
The US is a 30 trillion dollar economic market with various cultures that bring innovation. Expanding into America can spark rapid global growth for your business. Of course, itโs a journey laced with perils and many challenges, as the American system can get complex very quickly. It is therefore highly recommended to plan well for the regulation labyrinth, high costs and differences in salaries that you would need to hire employees on. The average American salary is around 30% higher than that in the UK.
The right strategy can turn your US expansion into a game-changing move. Delaware stands out as a popular choice; 67.8% of Fortune 500 companies call it their home. You can utilise a virtual office solution to initially get started with your setup move.
Legalities Involved in Selling to the USA
Entering the USA market successfully requires a sound knowledge of the various legal, accounting, tax and licensing rules. One must select the proper business structure that best suits their operations.
Business registration options
Three main options are available for UK service providers to have a US business presence in the US.
| Business Structure | Key Benefits | Best Suited For |
| C Corporation | Limited liability, knowing how to issue unlimited stock | Large operation scale |
| LLC | Flexible management, tax benefits | Small-medium businesses |
| Branch Office | Simpler setup, direct extension | to test market entry |
Delaware is the first choice for incorporation. This is because of the very pro-business legal system in Delaware. In Delaware, for businesses that are registered, state income tax is not levied on revenues that are earned outside the state.
Permits and Licenses
What does a Business require to operate?
- Employer Identification Number (EIN) for tax registration
- Business licenses, as required by the specific state
- Permits specific to given industries: determined by the nature of the service offered
- Having a registered agent in the state of operation is also a requirement
Even more so, if you are handling customer data, you must ensure compliance with UK and US data protection regulations in order to facilitate lawful operations across borders.
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Taxation and compliance
The US tax system is a multi-level working system that requires caution for compliance. Companies incur a corporate tax rate of 21% at the federal level. Each state then has its separate tax rules and requirements around state taxes.
Your tax obligations will depend on where you create a nexus. In general, the following creates a nexus:
- Physical presence in a state
- Economic activity that exceeds state-specific thresholds
- Having employees or inventory in a state
State income taxes generally range between 6% and 12%, so you must register with each stateโs Department of Revenue where you do business. Federal and state employment tax requirements must be met for U.S. employee hiring.
As a sales tax, your Economic Presence must be monitored with regard to the Wayfair decision. Most states use a threshold of USD 100,000 in sales or 200 transactions within 12 months to determine the sales tax obligations.
Setting Up Your US Payment Infrastructure
Your successful penetration of the US market will heavily rely on resilient payment infrastructures, so pay attention to the key ingredients that would help you process transactions smoothly.
US payment infrastructures
There are two main choices when managing US payments: Either set up a standard US bank account or use a virtual USD Global Account. Virtual accounts enable all management to be made remotely with your British identification rather than an in-person visit to US banks.
Major UK banks with a US presence offer simplified setup processes for traditional banking.
Important: Make sure you have documentation with your EIN and proof of a physical US address.
Payment processing solutions
The choice of your payment processor directly impacts your business operations. Worldpay leads the market and processes over ยฃ1.59 trillion on an annual basis in 146 countries. Hereโs a comparison of some of the leading payment solutions:
| Provider | Currency Support | Key Features |
| World Play | 135 currencies | All-in-one complete solution |
| Stripe | 135+ currencies | All the local payment method integrations |
| Checkout.com | 150+ currencies | Advanced analytics and Fraud Monitoring |
International payments require more attention compared to domestic transactions. So, your payment gateway should be capable of supporting multi-currency transactions, local payment methods, fraud prevention measures, live currency conversion, and managing currency exchange.
Carefully choose your invoicing currency, set the exchange rates on the payment day, shorten the payment terms, and use foreign currency accounts to earn better rates.
One key to your US expansion is efficient payment systems. The right combination of banking arrangements, payment processors, and currency management strategies can help minimise costs and maximise operational efficiency.
Creating a Digital Service Delivery Framework
Successfully venturing into the US market requires a dependable digital service delivery framework. Here is what you should know.
Selection of Delivery Platforms
The platform of service delivery you choose will directly impact your level of operations as well as end-customer contentment.
Choose a cloud-based platform for providing remote services since it gives scalability and global access without quality impact. Choose a hybrid platform if you have mixed delivery and require more flexibility and control of data. Choose an on-premise platform if you want to have complete control over your delivery platform.
Data Protection Compliance
Personal data transfers between the UK and the US would require some very careful consideration. This is because, from the 12th of October 2023, companies that are certified under the โUK Extension to the EU-US Data Privacy Frameworkโ will be able to receive personal data without needing any further safeguards. But you do need to check that:
- Their name is on the list for the Data Privacy Framework
- Data is properly protected
- How criminal offence data is being divulged to comply with the reference
If your U.S. partner does not have a framework certification, proper safeguards will be needed. Under the UK GDPR, organisations must ensure the protection of personal data when being transferred outside of the UK.
Service Level Agreements
Service Level Agreements represent the foundation of your Service Delivery Framework. Specifically, your SLA should articulate:
- The availability of service
- Percentage of uptime expected
- Windows for acceptable downtimes
- Schedules for maintenance
- Performance Metrics
- Reply times
- Resolution times
- Quality standards: The SLA should also have explicit rules on:
- Support hours and time zones
- Procedures for Escalation
- Methods of Compensation for Failures in Service
The international accords should state the time zones explicitly, and your SLA should articulate the type and level of support with a lucid demarcation of general helpdesk support from the higher technical assistance. The service delivery framework of your organisation must be compliant with regulations in the UK as well as in the US. The UK ICO notes some risks concerning certain categories of data that cannot be shared before the Data Bridge, like criminal offence information or some special types of data.
Initiating Business Operations in the USA
UK companies can expand their operations in the US market by developing efficient systems rather than investing in bricks and mortar. Emerging solutions offer affordable alternatives that work just fine.
Virtual office solutions
Virtual offices provide a prime U.S. address for your company without incurring the additional costs of operating out of a physical office. There are over 4,000 U.S.-based virtual office providers offering varied levels of service to meet your requirements.
Your virtual office manages mail delivery, answers calls and provides space for meetings as and when needed. This set-up portrays an effective image and helps you adjust to responsibilities.
Client Support Structure
A strong customer support structure is imperative to penetrate the U.S. market. According to a recent study, 96% of American buyers perceive customer service to be highly influential in their brand loyalty.
These steps help in creating effective support operations:
- Establish a clear ticketing system that manages the handling of inquiries
- Enable automatic routing so issues can be resolved more quickly
- Integrate AI-powered chatbots that can provide responses 24/7
- Utilise Analytics to Track Performance in Real-Time
The core team needs to be properly trained to run successful support operations. This keeps the team updated on the features of services and best practices.
Document Systems
The document system enhances operational efficiency by digitising and organising important business documents. It ensures:
- Documents can be located easily; this enhances efficiency
- Secured storage includes encryption and access controls
- Automated workflow for approval handling
- Version tracking to support an audit trail
Proper document management puts a company in compliance with the myriad regulations between the UK and the US. It should be easy to work with all types of files and enforce security policies that allow for sharing within and outside an organisation. The association of the appropriate document management system with other enterprises facilitates the formation of a unified working environment and ensures the unimpeded operation of affairs.
Building Trust with American Clients
Generating credibility in the American market requires precision in efforts to instil confidence in potential customers. The dissimilarity in cross-cultural dynamics of trust is rather large; a trust signal that works in the UK may not fly with customers in the U.S. Professional Credentials and Certifications Professional credentials are the foundation of trust while delivering services from the UK to the USA.
Here are the key elements required:
- Qualifications in the industry accepted by the US market
- United States Trade Organisation memberships
- United Kingdom export licenses and certifications
- Data protection regulatory compliance
It was also found that the display of home market industry awards and certifications can be as impactful in winning the trust of U.S. consumers.
Professional credentials and certifications
Professional credentials are the bedrock of trust when selling services to the USA from the UK. Here are the basic building blocks you need:
- Qualifications in the relevant industry that have been recognised in the US
- Membership with professional associations in the US
- UK export certifications and accreditations
- Certificates of data protection compliance
A newer study shows that displaying industry-specific awards and certifications from your home market can be equally effective in building trust with US clients.
Clientโs Testimonials and Case Studies
Client testimonials and case studies enhance your market position greatly. Case studies are highly successful in B2B relations and are an excellent means to substantiate your business to new target audiences.
Your trust-building content should look like this:
| Trust Element | Impact on US Clients | Implementation |
| Case Studies | Shows concrete experience | Detailed results from projects |
| Client Reviews | Shows credibility and history of customer satisfaction | Success on multiple platforms |
| Success Stories | Builds credibility | Industry-specific results |
Trust Signals for the US Market
American clients are particularly sensitive to certain โtrust signalsโ when checking overseas service providers. Reputable online security is, therefore, critical for entering the US market.
Your security certifications need to include
- SSL certificates to ensure that your information is protected, secure payment badges, and indicators of privacy policy compliance
- business legitimacy markers indicating the US registration of businesses, memberships in professional associations, and industry accreditations
- online presence verification through a Google My Business listing and social media profiles, professional social accounts, and industry platform verifications.
US customers place a premium on data security assurances when dealing with overseas service providers. Your website should mention the security measures and data handling processes it undertakes. Refreshed Google reviews and testimonials make your business shine and work as gigantic signals of trust in the US market.
Handling USA Clients
Efficient management of client relationships is a necessity in American markets. English may be a common language, but a considerable number of variations in business culture exist between the UK and the USA that impact service delivery.
Communication protocols
Business success depends on understanding how Americans prefer to communicate, with studies indicating that 90% of US employees value small talk during meetings. This is a departure from British customs.
Your communication strategy should zero in on:
| Communication Aspect | US Preference | UK Adaptation Needed |
| Email Style | Direct and brief | Less formal than the UK standard |
| Meeting Structure | Agenda-driven | Include small talk (5 mins) |
| Response Time | Quick replies | Same-day responses preferred |
Americans are generally more straightforward in communication. Less than 48% take terms such as โletโs do lunch soonโ as a real invite. This means you should:
- Schedule meetings during overlapping business hours
- Confirm all verbal agreements in writing
- Video conferences over important matters
- Keep regular status updates
- Cultural considerations
The common language between the two countries can be misleading. Americans talk about food 45% more than their UK counterparts. These cultural nuances help avoid misunderstandings:
- Meeting Protocols
- Arrive exactly on time
- Sharing the agenda beforehand, following a structured discussion format, and leaving time for questions is business etiquette
- Officials should use first names immediately after the original introduction
- They should maintain eye contact while talking to others and give firm but friendly handshakes.
- Responding should be done at the earliest opportunity.
- Americans like to communicate directly in positive situations but indirectly in negative feedback; positive politeness is often preferred. In such a case, 32% of British communication uses utterances like โthatโs an interesting ideaโ to show that an idea might not work.
Contract Management
The selling of services from the UK to the USA requires comprehensive and meticulous attention to the details of contract management. Your contracts need to include:
- Liability clauses as per U.S. specific regulations
- Provisions for fluctuations in currency
- Time zones concerning where deliverable
- Clear dispute resolution procedures
The general principles of law are similar in both countries. The French and Middle Eastern countries make use of more stringent โinherent defectโ clauses, which are for 10 years after the completion of the project. Your contracts should have included:
- Detailed Service Specifications
- Clear deliverables timeline
- Quality standards
- Performance metrics
- Review periods
- Risk Management Provisions
- Currency exchange protocols
- Force majeure clauses
- Data protection compliance
Client relationships need to be maintained in good standing, and regular reviews of contracts achieve exactly that, according to studies, which show that open communication during the contract life cycle reduces the risks of disputes.
Americans like things to be straight and honest. Your contract terms should reflect this desire for clarity while maintaining legal protections. A centralised contract management system will make it easy to monitor obligations and deadlines.
Conclusion
The sale of services into the USA from the UK represents one of the great opportunities for business growth. And yet, this needs to be done with careful planning and execution. A successful market entry strategy must begin by understanding the legal requirements and tax obligations for doing business in the US and choosing the right kind of business structure.
Your payment system should be able to handle multi-currency transactions and do them at favourable exchange rates. Robust digital service delivery systems supported by appropriate data protection can help you work efficiently across time zones.
Quick response and directness in communication, as well as clearly defined contract terms, are the hallmarks of American business culture. Concentrating on these aspects while modifying your service approach will strengthen your relationship with US clients and help you gain a solid footing in the American market.
Frequently Asked Questions
Do I need to set up a place in the USA to offer services from the UK?
No, not really. Online office options can give you a nice US address and take care of sending mail, answering calls, and providing meeting rooms, showing a smart image while keeping work flexibility.
What are the Key Legal Requirements for UK Businesses When Selling Services to the USA?
An Appropriate Business Structure: Choose Among C Corporation, LLC, or a Branch Office. Permits and Licenses Register for Taxes and Compliant with UK and US Data Protection Regulations.
How can I deal with currency exchange when I sell my services to clients in the US?
To optimise currency management, choose to invoice in one currency, fix exchange rates for the payment day, negotiate shorter payment terms, and use foreign currency accounts to access better rates. Equally important is the choice of a payment processor that supports multi-currency transactions and real-time currency conversion.
How can a UK service provider effectively create trust with its US customers?
Trust creation can be in view of the display of professional qualifications and certifications recognised in the USA, showing customer testimonials and case studies, displaying security certificates and business legitimacy markers, and having a strong online profile with verifiable professional profiles.
What are the differences in practices between communications with American and British clients?
Americans, being ones generally to favour a more direct and short style of communication, would like to get quick responses, hold meetings that strictly adhere to the agenda (but with a little small talk in the beginning), and usually take verbal agreements more seriously. It is crucial to back every verbal agreement with written confirmation and keep them informed about the status regularly.
