Bamboo Crowd was originally founded in the UK and saw a chance to set up in New York six years ago. This opportunity allowed us to tap into a completely different market, setting us up to grow in ways that would have been impossible in just one country.
Based on our experience and those of the many companies we’ve partnered with during their US expansion, we have compiled eight must-have tips that will make setting up a US subsidiary from the UK a rewarding process. Learn about this challenging journey and see how it can help your business grow in 2023.
1. Find a good immigration partner
When you first begin your set up in the US, you or one of your associates will need an E2 visa. This is no easy feat: immigration laws are constantly changing, E2s are highly competitive and difficult to get, and many visa offices are backed up and have long waiting lists.
Your immigration partner can help you bypass a lot of the difficulties when it comes to obtaining your visa. Seek advice and referrals when looking for the right partner, looking into businesses they’ve worked for in the past and ensuring they are aligned with your company. We also highly recommend someone based in the UK - it’s much more budget-friendly than finding an immigration partner in the US.
Need a few immigration partner recommendations? Send us a message!
2. Be aware of costs and salaries
Operating a business in two different countries means that you need to become familiar with a different economy and market. What is successful in the UK may not transfer over as smoothly as you’d think.
One major factor is the difference in salaries - payroll is much more costly in the US. You also have to account for much more expensive healthcare costs.
Keep this tip in mind when strategizing for salaries: take your UK salary, add 50%, then convert to dollars. if someone is on £50K, add 50% and convert to dollars = $95K. If you have a Director in the UK on £90K, then $165K – $175K would be equivalent based on that calculation.
For more salary guidance, download our salary survey here.
3. Have the right providers
One major mistake we made when setting up our US subsidiary was using the wrong providers. When payroll, benefits, legal, accounting, and other vital business providers aren’t operating correctly, it means double the work for you.
There are many poor service providers out there, so take time researching and getting strong recommendations. It’s also very important to get a good accountant - sooner rather than later. Both personal and corporate taxes are complicated in the US, so best to get someone on your side now.
4. Send the right person
Whoever is sent to spearhead the opening of your US subsidiary needs to be a major decision-maker in the company. This should be a founder, director, or senior position holder who has been with your business for a long time and has in-depth knowledge about your services and processes.
If you must hire someone to send, it’s crucial to make the right hire. Our experience has shown that there are key items to consider here, including establishing the right hiring process, vetting enough candidates, and working with a recruiting partner who understands the UK market and has knowledge of its difference from the UK.
5. Pick your location carefully
Get advice on where to set up your US subsidiary. The biggest implication is typically around tax. The cost of state tax in New York and California is incredibly high, but what benefits do you gain for operation in these highly competitive regions? A state like Delaware has no state taxes, but that doesn't necessarily mean lower taxes as it depends on where you conduct business, and where your clients might be based and if you plan to have an office. There is no one-size fits all approach - this comes down to having the right partners and providers to lean on for advice.
6. Get the right bank
The wrong banking partner can significantly add to your cost of operations if not carefully vetted. Take time learning about your different bank options, ensuring that the one your choose has good sterling rates, great business customer service, and zero rates on wires. Feel free to reach out to us for some great recommendations here!
7. Build the right culture and benefits
These are two of the major differences between the US and the UK. Benefits include different healthcare considerations, less holiday allowance, and 401Ks instead of pensions. Office culture is something to think about as well, as some things considered normal in one country may be completely unacceptable in the other.
Consider how you want to build your benefits and culture and talk to other businesses who have done it to gain insights on how this transition will work for your business.
8. Create a perfect hiring strategy
Hiring is one of the most difficult and important steps in opening your US office. These first few employees set the tone, culture and growth trajectory of your business.
You’ll want to build a big pipeline of candidates to consider, set competitive salaries, design the right recruiting process, and avoid making crucial, costly mistakes. Working with a US recruiting partner takes the stress out of your hiring process, ensuring that you get all of this right the first time around.
Bamboo Crowd is uniquely positioned to assist businesses with setting up in the US. From multi-national companies building a satellite office here, to boutique consultancies setting up a new space, we’ve seen it all and have knowledge that we are eager to share with those ready for this big step.
Are you considering expanding your business to the US and need a little advice, especially when it comes to strategic hires? We’d love to be a resource - get in touch!