Expanding your Workforce to the United States

Becoming a leader in your industry involves expanding to larger markets. With a GDP worth $22,996 trillion in 2021, the U.S. is one of the most lucrative markets for business. However, financial and legal regulations can be complex. Understanding the following frequently asked questions about US expansion can get you on track so that you can focus on international hiring, building a sales team, and reaping the benefits of entering the biggest business market in the world.

Before entering the U.S market, there are a few things to consider in how to get set up. A big factor is setting up a U.S entity. From there you will need to do research on compensation, benefits, employment type, travel, support, timeframe, process, and much more. There can be many pain points to getting started in the U.S. but the benefits are what draw businesses in.

Do You Need Incorporate in the US?

The answer is Yes and Sort Of.  While you do not need to live in the U.S. or be an American citizen to set up a business entity in the United States, you will need to set up a legal business entity in the U.S. if you plan to hire U.S. based employees. 

To hire American based employees you need a Individual Taxpayer Identification Number (ITIN) or an Employer Identification Number (EIN).  This will allow you to pay your employees with a U.S. bank account, pay U.S. vendors and to lease office space. Many landlords in the U.S. won’t lease space to a foreign entity without a secure means of guaranteeing that they can collect from you.

The way to get around incorporating is to utilize an Employer of Record (EOR). An EOR is a third party that acts on your behalf as the legal employer. By taking advantage of their services, you can avoid many of the common pitfalls associated with hiring overseas. In addition, an EOR can also help you to navigate the complex US legal system and ensure that you are in compliance with all applicable laws. This solution has become a go-to for many companies because it is more cost-effective. Companies like Deel allow you to pay your employees, provide top benefits such as healthcare and 401k, and avoid compliance and tax issues. 

If you are only hiring one or two employees to get started, many companies choose not to incorporate and go the route of using an EOR until they are ready to hire and grow a more established team.  Knowing when to incorporate will depend on many factors in your business. 

Where In the U.S. Should You Incorporate & Hire?

Business incorporation is done at the state level in the U.S. Therefore, you can choose from any of the 50 states or the District of Columbia.  However, before locking in on a state, it is important to consult with a business lawyer. In some cases, the laws of your company’s home country may dictate the choice of entity, so it is vital to consult with an attorney familiar with both U.S. and international law to make this decision. 

New York, San Francisco and Boston are the most popular cities for US expansion due to the access to strong talent, great customers and partners as well as investors, but they are also the most expensive cities. Delaware is a popular choice for many because of its stable and predictable corporate law statutes and dedicated courts for business law.  Many European companies prefer to stick to the East Coast as it allows for a greater overlap in standard working hours. 

Even with the shift to remote work in the last few years, many companies want their employees located in specific markets to give them the greatest access to potential customers and clients.  Boston and San Francisco are often seen as Technology and Pharmaceutical hubs, New York and Chicogo are Media and Finance hubs. You want your sales team to have the greatest market to target so this is critical to think about when you are looking for where your company should get started.  

Many companies have started to target up and coming cities such as Pittsburgh, PA, Raleigh, NC, Atlanta, GA and Austin, TX to find the great talent in a potentially less competitive market than Boston, San Fran and New York.  With many companies doing business virtually and less in-person meetings with clients, choosing one of these up and coming markets may give you a business advantage. 

How Can You Get Your U.S. Business Going?

Once you have set up your company in the U.S., you’ll need to manage employees and get customers. Building a sales team in the new market is essential.  Having U.S. employees can increase customers’ trust in you and help you get an inside look into the market. Using your hiring resources wisely will help you gain customers.  But the good news is you don’t have to go at it alone. Leveraging a recruitment partner based in the U.S. gives you a leg up – they know the market, your competition, and can help navigate cultural differences. 

Knowing how to attract and retain talent in today’s market is critical for your success. With the right strategy, you’ll have a competitive advantage over your competitors. You’ll also diversify your business and increase revenue opportunities. By taking the right approach to sales recruiting, you’ll also benefit from an expanded talent pool.

The Bottom Line

If you don’t jump on the US expansion bandwagon, other companies will. The U.S. is one of the top locations for foreign direct investment. If you’re considering building a sales team in the U.S., contact Treeline to learn how to position your business in the best light. Treeline pairs you with top-notch sales professionals in your industry. We take one of the biggest challenges in US expansion off of your plate so that you can focus on other aspects of the business.