Going international is almost every growing business’ dream. There are many ways in which this can be achieved, from regional expansion that eventually crosses the nearest border to targeted acquisition of international businesses elsewhere; whatever the situation, becoming an international business is usually the remit of a company that has outgrown its country.
If you are one such business, and are looking at straddling the Atlantic as a US-UK company with interests and audiences on either side of the proverbial pond, then you have a not-insignificant amount of red tape to look forward to. Here, we aim to take a glance at this red tape, and untangle enough of it that you gain a decent idea of how to approach the bureaucratic side of the cross-Atlantic equation.
Key Tax Considerations for US-UK Businesses
The main problem facing any business straddling the UK and the US is, of course, taxation. The UK and US have completely different systems for taxation, and navigating both as a theoretically singular entity can be problematic to say the least.
The biggest example of this would be the threat of ‘double taxation’; if, for example, you were a US citizen operating a UK business, you could be subject to Corporation Tax in the UK for your business’ profits, and then taxed again in the US for your global profits.
Strategies for Effective Tax Planning
If you are an individual in the US, then you can sidestep a significant amount of this double taxation by utilising the US’ foreign tax credit system for UK earnings. The remaining amount could be eliminated entirely by registering your UK business as a tax-transparent entity. Generally speaking, careful business structures are crucial to properly structuring your tax obligations; it is here that professional consultation is vital, to ensure no legal lines are being inadvertently crossed.
Ensuring Compliance with Cross-Border Regulations
It isn’t tax alone that cross-Atlantic businesses need to consider – though there are many different ways in which tax can make life difficult, such as with the ownership and international trading of business assets. If your business trucks in physical products, then the management of said products across borders can become complex too.
Consultation is, again, key here – as is a fundamental understanding of your business and its interests on both sides of the Atlantic. Key differences in trading standards, employment law and industry-specific regulations can make it hard for you to properly manage stock and its movement; however, with the right grip on international business structure, having a presence in both countries can work in your favour with respect to expanding your access to region-specific resources.
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