Entering the US market presents a lucrative opportunity for UK tech companies but requires careful navigation of various legal challenges. Use this ten-point checklist to ensure your company is well-prepared for the transition, and at the same time understand the consequences of non-compliance.
1. Corporate Structure and Entity Formation
Tasks
Decide on the appropriate legal structure (corporation, LLC, etc.) considering tax, liability, and management implications.
Comply with state-specific incorporation requirements and federal regulations.
Consequences of Non-Compliance
Incorrect setup can lead to issues with liability, tax obligations, and management control.
Potential fines, penalties, or even dissolution of the business entity.
2. Intellectual Property Protection
Tasks
Secure patents, trademarks, copyrights, and trade secrets under US law.
Navigate USPTO processes and resolve any existing IP conflicts or infringements.
Check your freedom to operate in the US to avoid infringing somebody else’s IP
Consequences of Non-Compliance
Innovations and branding can be stolen or infringed upon, leading to costly legal battles.
Loss of competitive advantage and market position.
Unwitting infringement of a third party’s IP rights is no defense for a claim of willful IP infringement.
3. Employment Law Compliance
Tasks
Understand and comply with federal and state employment laws, including wage and hour laws, anti-discrimination laws, and worker classification.
Be aware that each state has its own employment-related laws that must be complied with. One size does not fit all.
Consequences of Non-Compliance
Lawsuits, substantial fines, and penalties.
Issues such as wrongful termination claims, wage disputes, or discrimination allegations.
Ready to enter the US market? Meet Tom Thorelli, a US attorney with extensive experience helping companies enter the US market, available for free consultations in London on July 11th.
Adhere to US data protection regulations such as the CCPA and HIPAA if applicable.
Ensure cybersecurity measures meet US standards and prepare for potential data breaches.
Consequences of Non-Compliance
Data breaches resulting in hefty fines, legal actions, and loss of customer trust.
Litigation and substantial financial settlements.
5. Taxation
Tasks
Navigate federal, state, and local tax obligations.
Understand the application of double taxation treaties between the UK and the US.
Consequences of Non-Compliance
Double taxation and increased tax liabilities.
Penalties, interest charges, and potential audits by tax authorities.
6. Regulatory Compliance
Tasks
Comply with industry-specific regulations (FCC for telecommunications, FDA for health tech, etc.).
Adhere to the Foreign Corrupt Practices Act (FCPA) concerning anti-bribery and corruption.
Consequences of Non-Compliance
Operational disruptions, product recalls, and bans on selling products in the US market.
Significant fines and legal actions impacting financial health.
7. Contract Law
Tasks
Draft and negotiate contracts under US law, which may differ significantly from UK contract law.
Ensure terms and conditions, sales agreements, and service contracts are enforceable in the US.
Make sure you have appropriate insurance remembering the US is a highly litigious place to do business.
Consequences of Non-Compliance
Poorly drafted contracts may be deemed unenforceable, leading to disputes and financial losses.
Costly litigation, draining resources and diverting focus from business operations.
Do not presume that you can “hide” behind U.K. law governed agreements. It is in the US where you will need to enforce contracts.
8. Consumer Protection Laws
Tasks
Comply with US consumer protection regulations, including those enforced by the Federal Trade Commission (FTC).
Address requirements for advertising, marketing practices, and product liability.
Consequences of Non-Compliance
Class-action lawsuits, substantial fines, and settlements.
Negative publicity damaging the brand and eroding customer trust.
9. Immigration and Visas
Tasks
Secure the appropriate visas for UK employees working in the US.
Understand the immigration laws and processes for transferring staff or hiring foreign talent.
Consequences of Non-Compliance
Disruption of the company’s workforce.
Potential fines and penalties for immigration violations.
10. Litigation and Dispute Resolution
Tasks
Prepare for potential legal disputes in the US legal system.es for immigration violations.
Consider arbitration or mediation clauses in contracts to manage dispute resolution efficiently.
Consequences of Non-Compliance
Increased risk of costly and lengthy litigation.
Potentially unfavourable legal outcomes without proper dispute resolution mechanisms.
Navigating these legal challenges often requires the assistance of experienced legal counsel familiar with both UK and US laws to ensure compliance and mitigate risks.
Ready to enter the US market? Meet Tom Thorelli, a US attorney with extensive experience helping companies enter the US market, available for free consultations in London on July 11th.
Disclaimer: The information provided in this article is for general informational purposes only and should not be construed as professional advice. Readers should not rely on any information contained herein as a substitute for professional guidance and should seek independent expert assistance when making decisions related to transfer pricing or US expansion.
Ian Collins, with an extensive background spanning over 30 years in business development and general management, co-founded GTM Global in 2015. His experience encompasses hi-tech industries such as security, artificial intelligence, business intelligence, and enterprise software solutions. In his career, Ian has started several tech companies, overseen two corporate ventures, executed a management buy-in, and led two business turnarounds. He has also been involved in buying, selling, and merging various of his companies, and has achieved two successful business exits. Ian's expertise is particularly focused on business growth strategies and leading-edge proposition development.
