UK Trade & Investment’s Guide to Doing Business in the United States

The US is the UK’s premier destination for overseas investment, and is also its largest single trading partner, with US/UK bilateral trade topping £138 billion in 2014. Hundreds of UK companies have established offices in the US, determined to take advantage of all that this vast market has to offer.

The sheer size and scale of the US means that it should be treated as a series of regional markets with varying
characteristics. However, apart from a few import quotas and strategic industry-ownership restrictions, UK firms face few barriers to doing business in the US.

UK SUPPORT NETWORK
UK Trade & Investment (UKTI) is the government organisation that supports UK businesses wishing to trade internationally, and overseas companies looking to invest and expand in the UK. UKTI provides expertise and contacts through a first-class network of specialists that can help UK companies realise their overseas trading ambitions.

Your first point of contact is your local International Trade Team, made up of International Trade Advisers from both the private and public sectors plus their support staff, who are able to access on your behalf a range of support services to help you explore the US market.

Details of your local International Trade Team offices can be found here www.uktiofficefinder.ukti.gov.uk/contactSearch.html

In the US, we have a network of UKTI offices, located at the British Embassy in Washington DC and eight Consulates
throughout the country covering three time zones. These are staffed with US trade and investment officers with sectoral, marketing and private sector experience who can also advise on local business conditions and practices, provide tailored information specific to your needs and help you gain access to key industry contacts to help you do business in the US.

WHAT CAN UKTI OFFER?
Thanks to our commercial expertise and unrivalled local access and knowledge, we can help UK companies initially
assess whether they are ready to do business in the US and then support them in making their first steps into the market.

Our services include:

• Targeted outward missions to the US and support at trade shows
• Bespoke research and in-depth analysis
• Industrial knowledge, business contacts and local knowledge of requirements and business practices
• Help in gaining access to US government at federal, state and local levels

ENTRY REQUIREMENTS
The US currently operates a Visa Waiver Program (VWP), which enables most British Citizen passport holders to visit the US without a visa if they are travelling on business, pleasure or transit for less than 90 days, with a valid return or onward travel ticket. Visa-free travel does not include those who plan to study, work or remain in the US for more than 90 days. Application must be made through the U.S. Customs & Border Protection’s Electronic System for Travel Authorization (ESTA) (esta.cbp.dhs.gov/esta). A fee of $14 is required ($10 application and $4 processing). Visa-free travellers, including children, entering the US under VWP require fully valid, machine readable passports or e- passports with an electronic chip.

Passports issued on or after 26 October 2006 must also include an integrated circuit chip capable of storing the biographic information from the data page, a digitised photograph, as well as other biometric information. For further details visit the US Embassy website (uk.usembassy.gov).

WORK PERMITS
UK companies are cautioned that, due to regular overviews of US immigration policy, regulations can quickly change. It is therefore wise to seek up-to-date advice from a US immigration attorney before applying for any visa.

UK firms should carefully select the business visa appropriate for their own and their employee’s long-term needs. For example, some business visas allow the employee to eventually apply for and acquire a permanent resident green card, while others do not. Similarly, some visas, but not all, require annual renewal. Moreover, certain visas can only be acquired for a limited number of years.

UK companies should also ensure that employees who frequently visit the US in order to attend trade shows and other business meetings obtain the correct kind of visa.

FORMING A COMPANY
Given the size of the US market, UK companies often choose to set up a US trading company, or subsidiary, to act as the coordinator of their other distribution channels, such as sales agents, distributors and strategic partners. When properly established and managed, such a company can provide the following advantages for UK firms:

• Credibility with US customers
• Maximum control over how the brand name and image is established in the US
• Good local contact with US customers
• Good forecasting regarding production and delivery

COMPANY TAXATION
All goods entering the US are subject to duty on their dutiable value unless specifically exempted by law. Dutiable value is determined in various ways and a good’s duty varies according to how it is classified; classification and valuation of goods is the responsibility of the importer.

U.S. Customs & Border Protection (www.cbp.gov) will then determine the relevant duty. Goods cannot leave the port of entry until this has been done (liquidation). After liquidation, importers have 90 days in which to appeal.

Reductions in the duty on goods that have been imported from the US to the UK and then combined with UK goods, are available for the value of components manufactured in the US.

HM Revenue & Customs (www.hmrc.gov.uk) can help you locate your local Customs Advice Centre and your local Excise and Inland Customs Advice Centre, which is the first line of enquiry for routine tariff classification advice down to the six digit Harmonised System subheading level, used worldwide. For advice on tariff classification numbers, email:

classification.enquiries@hmrc.gsi.gov.uk

The European Commission’s Market Access Database (madb.europa.eu/madb/indexPubli.htm) gives tariff information for many non-EU countries, including the US. It also has an Exporters Guide to Import Formalities section, which gives an overview of import procedures, as well as any general and specific requirements for a product. You can also check the US International Trade Commission database (dataweb.usitc.gov) to review US duties.

Sales tax
US sales tax is determined state by state. Some states have no sales taxes at all. For more information visit the website of the Federation of Tax Administrators (www.taxadmin.org).

Additional taxes
Many US states impose an annual franchise tax on corporations incorporated and doing business there, and that are registered with the Secretary of State. Franchise taxes are usually based on the amount of the capital stock, but can also be calculated on bases such as gross receipt, net income and net worth. Real estate and personal property are subject to taxes whether or not the property is used in the business.

Employees must pay unemployment taxes into a fund that provides compensation payments to the unemployed. The taxes are levied based on the “experience ratings” of the company’s employees. There is also a federal unemployment tax which is reduced by the amount of tax paid to the state.

UKTI GRANTS AND ASSISTANCE

Business Opportunities
Exporting is GREAT exists to help more first-time UK exporters like you make exporting work for them. Visit www.exportingisgreat.gov.uk now to access live business opportunities around the world, training sessions, business seminars and other events, as well as specialist trade services and support.

Tradeshow Access Programme (TAP)
TAP gives grant assistance to new UK exporters seeking to enter the US and other overseas markets by taking part in overseas exhibitions. Financial support is limited to SMEs. Eligible companies can receive a grant of up to £1800 (for separate UKTI-supported exhibitions) to help them acquire knowledge and experience of exhibiting effectively in the US as part of their longer-term export strategy. Visit www.gov.uk/tradeshow-access-programme for more information.

Events & Missions
UKTI’s new events portal (www.events.ukti.gov.uk) provides a single calendar view of all UKTI events globally – some 400 activities annually. It provides companies with detailed information to help them decide on the most appropriate events to attend. The calendar can be filtered and searched by sector and/or market, with links to detailed events websites that allow users to register for an event.

Overseas Market Introduction Service (OMIS)
OMIS (www.gov.uk/overseas-market-introduction-service) is a worldwide chargeable service that puts UK companies directly in touch with UKTI’s overseas staff, who can provide focused business advice, information and visit support. OMIS can provide a flexible blend of preparatory advice and research, and support when you visit the market. As in other countries, our US officers will propose a programme of support and advice that fits your requirements. This could include an analysis of possible market-entry strategies, identification of potential business partners, arrangements of appointments, and advice on competitors, local regulation and standards. They can also advise on local events, and finding relevant tender opportunities.

Open to Export
Open to Export (OpentoExport.com) is an innovative new online community that brings together exporters, with public and private sector service providers, all together in a single place. Companies can access government advice with that of existing exporters, prospective exporters and private sector service providers. These might be lawyers, accountants and independent trade advisors. Companies can collaborate with other companies and share advice and ideas around exporting. It offers four clear benefits:

• Bespoke answers to meet business needs in new markets
• Access to practical information on all the important export topics from getting started through to cultural essentials
• A place to connect and engage with a range of exporters and service providers
• The latest international business opportunities

ADDITIONAL INFORMATION
UKTI offers a number of helpful publications (www.gov.uk/government/publications) on doing business in the US. They include: Exporting to the USA, Preparing for a Successful US Trade Show, Marketing in the USA, US Product Liability Law, Tax Considerations, and Negotiating Technology Transactions with US Businesses.