FAQ's
Establishing a US presence
Get answers to your questions and take the first step toward US business expansion.
What is a US subsidiary, and do I need one to operate my business in the USA?
If you plan to operate your business in the US as the legal employer (also known as the Direct employer) for your US employees, or are thinking of entering in a co-employment relationship with a PEO, you will need to form a subsidiary company. A subsidiary is a distinct legal entity that is more than 50% controlled by a parent company. Because a subsidiary is a separate legal entity, the liabilities, taxation, and regulations are also treated distinctly, limiting exposure to your parent company. There are a number of different types of subsidiaries you can establish in the US, such as LLC (Limited Liability Company), C Corporations, Non-profit (also known as 501(c)(3)) or LLP (Limited Liability Partnerships).
Whether a business needs to establish a US subsidiary to operate in the US will depend on their business objectives, legal considerations, and the type of business activity. The primary benefit of forming a subsidiary is creating a legal separation between the parent company and the subsidiary, which can offer liability protections and tax benefits. If a foreign company decides to operate in the US without a subsidiary, they can choose to work as a branch office or a representative office. However, unlike a subsidiary, these do not offer the legal protection created by a separate legal entity.
Ultimately, the decision on whether to establish a US subsidiary or not should be made on a case-by-case basis, taking into account legal, financial, and business considerations. If you are considering establishing a US subsidiary, it is important to seek professional advice and assistance to ensure that the process is carried out correctly and with compliance with US regulations and laws.
Find out more about our Entity Setup Service and how we can help you establish your US subsidiary.
As part of the process, we work with you to determine what services you need, and then we coordinate all aspects of the employment relationship. If you decide not to set up your own US entity and opt for our Employer of Record Service, we will hire US workers to provide services to you, and the US employees will sign an offer letter with Foothold America. As ‘at will’ employment is standard in the US, the US employees will sign the offer letter rather than a contract. Our offer letter will detail the terms of employment, including salary, benefits, and paid time off.Â
If you would like the US employees to sign a contract directly with your business, you will want a US entity. Foothold America can also help you with the process of establishing your US entity and managing your employees via our People Partnership Service. If you consider becoming a PEO+ Cross-Border Support client, your company and the PEO will enter in a co-employment relationship. Whilst you will be the legal or the Common Law Employer (CLE) for your US employees, because the PEO processes payroll and end-of-year tax documents for your US employees, they are considered by the IRS to be the employer of record.
If you decide to expand in the US via our Employer of Record Service, you can have boots on the ground within a week from your candidate signing the offer letter. This is the quickest route of starting to trade in the USA. If your business requires a US entity, you can start trading as soon as you are registered and obtain your EIN. Find out more about our US entity service here.Â
As part of the process, we work with you to determine what services you need, and then we coordinate all aspects of the employment relationship. If you decide not to set up your own US entity and are opting for our Employer of Record Service, we will hire US workers to provide services to you, and the US employees will sign an offer letter with Foothold America. As ‘at will’ employment is standard in the US, the US employees will sign the offer letter rather than a contract. Our offer letter will detail the terms of employment, including salary, benefits, and paid time off. Â
If you would like the US employees to sign a contract directly with your business, you will want a US entity. Foothold America can also help you with the process of establishing your US entity and managing your employees via our People Partnership Service.Â
Yes. Whether you opt in for our Employer of Record Service, People Partnership Service or our US Entity Service, you will have a dedicated HR and Client Service representative as your extended HR department, who will manage the complex operational and HR processes of doing business in America. Â
The amount of money a US workers’ healthcare coverage will cost your business largely depends on your chosen solution. Â
However, to allow you to draw up some provisional calculations, expect to factor in an additional $13.000 – $20.000, on top of your workers’ salaries. This amount can differ based on factors such as the industry and the difficulty of finding talent, and would cover health care, taxes and other benefits. In the US, employers are expected to provide and assist with health insurance and company benefits.Â
On balance, when you consider health insurance and taxes, the cost to employ a US worker is on par with the UK and Europe. For a monthly fee, through our Employer of Record Service, Foothold America can provide and manage all payroll, HR and other services, including benefits administration.Â
How to establish your business presence in the USA?
The US continues to be fertile for business innovation and growth, inviting businesses from around the world to make their mark in the 50 states. But how do you get started? Explore the Q&A’s below to find out more about what it takes to establish your business presence in the USA, how to set up a US entity, how long it takes & more. If you have any other questions for us about entering, growing or scaling in the USA, please feel free to get in contact with us here.
Only the best for you and your team
At Foothold America, we offer top-notch service for you and your team. Our core services include:
Employer of Record Service (EOR)
Our Employer of Record Service offers a turn-key, cost-effective solution for your company to have a legitimate US presence with US employees anywhere in the country in as little as one week without the cost and complexity of setting up a US entity.
PEO+ Cross-Border Supportâ„¢
Our comprehensive PEO+ Service goes beyond traditional PEO offerings. From tailored implementation assistance to seamless onboarding for first-time hires or transitions from other hiring models, we help you manage your US entity and people operations. This service is a great option for international businesses looking to conquer the US market with absolute peace of mind.
People Partnership Service (PPS)
We’ve created our People Partnership Service (PPS) to help you navigate the process of setting up your US entity, becoming the Employer of Record (the direct employer), onboarding US employees, and managing the complex operational and HR processes of doing business in America.
Exclusive Talent Acquisition (ETA)
Businesses around the world partner with Foothold America and save thousands of dollars on their US hiring costs. With our ETA service, you can find and hire the best employees compliantly and competitively. We make it easy and affordable for you to hire the right candidate at the right time and at the right cost.Â
Entity Setup
Establishing a legal entity in the US brings enormous potential for growth—and a unique set of challenges and complications. Partnering with Foothold America for your US entity setup ensures smooth and compliant registration in your chosen state – all whilst cutting through layers of bureaucracy and giving your company the freedom to concentrate on its larger business objectives.
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Request a quote, talk with our US expansion experts or ask any questions. We will get back to you via email in less than 24 hours.
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68 Harrison Avenue 6th Floor Boston, MA 02111 (617) 702-3402