ADBC

I'm moving to America in September with my wife who is American. I have full right to work in the US status.

I run a business in the UK and want to carry it on in the US while my business partner maintains the UK office. The company is very small (just me and my business partner at the moment)

I guess my question is has anyone out there done this already? And what is it you need to do to satisfy all parties with regards to taxation etc?

Thanks

Bob

50 different states, 50 different rules and regulations on setting up a business.

That isn't hard and taxation, well you'd pay someone to do that for you, your personal taxes will be complicated enough if you're taking a salary from outside the US anyway.

Bink

I've done it on behalf of my company, which although small is still a bit bigger (was about 35 people when I opened the US office, now about 50 in the company).

Get a lawyer, this isn't something to try and plough through on your own. You need to think very carefully about how you will register the corporation and assuming you go for something like an LLC, whether it's a C or an S corporation and therefore who is responsible for the taxes.

Start at the IRS's website for the different business entities and who is responsible for taxation in each of them.

ADBC

Thanks Bob and Bink,
I wasn't thinking of tackling this alone and a lawyer is something I'd definitely want to deal with this. It was just a kind of where do I start?

PS I will be based in Los Angeles, California

Bob

Local Chamber of Commerce, or local Business Bureau type office would probably be a good place to start, they'd be able to refer you to lawyers/accountants who might be able to help at the very least.

One thing to consider, especially if have a company exit strategy in mind, would possibly be how/where/why of incorporating in another state which might be more advantageous if you sold up, but if you don't have that in mind or will be a very small operation, the extra hassle might not be worth it. But there is a reason a lot of very big companies are set up in Delaware.

md95065

Yes, apart from the obvious issues like taxation, you also need to worry about all of the potential state and local regulations regarding conducting a business that you may need to worry about. California is one of the most over regulated places on the planet so even if you are just operating a one person business out of your spare room you do need to consider that aspect of things ...

Noorah101

I totally agree with this. My husband is self employed and the business is based in Phoenix. However, he spends most of his time working in Los Angeles and rents a workshop/apartment there. Dealing with California taxes is a pain in the rear.

If you're doing anything that also requires shipping things between USA and other countries, you'll be dealing with the CA Board of Equalization (through customs), and THAT has been a nightmare for us.

Rene

penguinsix

The US has rather draconian reporting requirements on a) US taxpayers who own a percentage of a foreign corporation and/or b) foreign corporations that are operating in the US and/or c) US corporations that are owned by foreigners. It is an area in which you will need professional advice, and not from some generic shopping mall accountant but someone more versed in international transactions.

You'll need to think about all this when you set things up. You'll probably end up creating a US entity that you own and then bill the foreign entity as a consultant or something. This will result in some self-employment taxes (PAYE) but it might be the easier option.

This is a real pain in the butt to sort out. Some of these forms have 'time estimates' on them--i.e. the amount of time they anticipate it will take you to collect the information and to fill it out. One of them said 82 hours of record keeping, 16 hours to learn the form, and 24 hours to fill it out or something like that. Just unreal.

HarryTheSpider

Would you be looking to do business in/with Americans (people/businesses) or simply continuing to work for your UK business? I wonder how that might impact your choices?

Steve_

The first thing you should do is make an appointment with the Small Business Administration or have a poke around their website. Watch the videos so you understand how US companies work, S corporations, C corporations, US payroll taxes like FICA, etc.

The simplest thing to do is start up a US business rather than messing around with the UK one. Just invoice each other. Otherwise you're going to end up with a whole tangle of HMRC and IRS rules.

For example if the UK company is a corporation and it operates on US soil, then it has to file an 1120-F every year as well as having a US payroll and also this makes the balance sheet of the UK company complex as it is dealing in US dollars etc. Or if it has a foreign branch that usually has to be a C-corporation, which is more complex than an S-corporation for a single employee.

Simpler just to set up a separate company when you're on this small of a scale. Then you can use any decent accountant, rather than KPMG or PriceWaterhouseCoopers.

Mr.WellDone

Complicated in the sense that you'll be taxed twice.

ian-mstm

You've probably never heard of the US/UK tax treaty, right?

Ian

Steve_

Well you will be taxed twice (or the company will) but it can claim a foreign tax credit. This is why I said set up two separate companies and invoice each other, because foreign tax credits for corporations are not fun to deal with and you need a specialist accountant. With a two-man operation the amount of invoicing shouldn't be that oppressive.

Moose Baby

I'm currently in a similar situation. I moved to Illinois from the UK 4 months ago with my husband. I have an L2 visa and EAD (authorisation to work), so I have an SSN.

I've been running a small wedding and event planning company in the UK for just over 3 years - currently a sole trader but soon to be a Ltd company as I've just teamed up with a new business partner. I want to expand my company so that I can work over here in the US - it will likely just be me running weddings/events here, and I'll be dipping in and out of UK weddings (my partner is focused solely on UK weddings), but we'll both be responsible for decisions/management on both sides of the pond, and we'll ultimately be taking our wages from the combined income from US and UK weddings.

Like ADBC, I want to know the best of way going about setting up over here. I was thinking of LLC, as it seemed most straightforward, but not sure if that's the best way to go? I'm not that keen on setting up a separate US business as I want everything to run under one brand and from my single website - also not sure how complicated it would get as I earn a portion of income from UK weddings?

Any other help/advice or pointers from those already given as to where to start would be great!

Thanks

Bob

And you still can. It's how many large companies do things, setting up a separate entity in each country they operate in.

It makes it easier for tax purposes to just be able to be able to bill the other entity for services etc.

But as mentioned earlier, it all depends on which state you move to and which state you want to set the business up in.