In 2018 I helped a Hong Kong-headquartered conglomerate open its first North American office: finding the space, hiring the first employees, moving executives through the immigration process, and connecting a new US operation to a parent company on the other side of the world. I did that work as an operator, not a lawyer. Law school is teaching me the architecture underneath the checklist.
1. You will form a US entity, and probably a specific kind
Foreign companies rarely operate in the US as themselves. The standard move is a US subsidiary, and most cross-border advisors default to a corporation (very often Delaware) rather than an LLC. Two reasons. First, liability: the subsidiary fences US lawsuits and debts off from the parent, if you respect the entity’s separateness. Second, tax: an LLC’s pass-through treatment, usually a selling point, can pull a foreign parent directly into US tax filing obligations, which is exactly what most parents want to avoid. A corporate subsidiary pays its own US tax and keeps the parent at arm’s length.
Formation in one state is not the end. You register as a foreign (out-of-state) entity in each state where you actually operate, and each state adds its own filings, taxes, and annual reports. Then come the unglamorous gatekeepers: the employer identification number from the IRS, and a US bank account, which for foreign-owned companies involves more compliance scrutiny and delay than anyone expects. Start the banking early.
2. Getting your people here is its own legal project
A US entity means nothing without people who can lawfully work in it. The workhorse for established companies is the L-1 intracompany transferee visa, which moves executives, managers, and specialized-knowledge employees from a foreign company to its US affiliate. There is even a version for opening a brand-new office, with extra scrutiny attached. Treaty-based E visas serve investors and traders from countries that have the right treaty with the US, and the treaty list matters: nationals of some major economies qualify and others do not, which shapes planning.
Two mistakes recur. Companies let executives do real work on visitor status while “just setting things up,” which risks the very immigration record the company will later depend on. And companies treat immigration as a form to file rather than a timeline to plan around; visa processing determines launch dates more often than office leases do.
3. US employment law will not behave like home
Most foreign executives know one fact about US employment law, at-will employment, and over-trust it. Yes, most US employment is at-will. It is also wrapped in federal, state, and local law on discrimination, wages and overtime, leave, and worker classification, and the rules change every time you hire in a new state. The classification trap deserves special mention: labeling early hires “independent contractors” to keep things simple is one of the most common and expensive mistakes inbound companies make, because US agencies apply their own tests regardless of what the contract says.
The practical rule: the day you hire in a state, that state’s employment law applies in full, and a two-page offer letter plus a basic handbook reviewed by US counsel costs a fraction of the first dispute.
4. Tax runs on two tracks at once
The subsidiary faces US federal and state corporate tax like any domestic company, including state-by-state questions about where it has enough presence (nexus) to owe tax. The cross-border track is transfer pricing: every flow between parent and subsidiary, products, services, management fees, IP licenses, must be priced as if the two were unrelated companies dealing at arm’s length, and documented. Tax authorities on both sides of the border care about the same transactions for opposite reasons. This is the area where skimping on advisors reliably costs more than the advisors would have.
5. Know which regulatory tripwires exist, even if you never trip them
Two concepts belong on every inbound checklist, at awareness level. CFIUS, the Committee on Foreign Investment in the United States, reviews foreign acquisitions of, and certain investments in, US businesses on national security grounds; its reach is broadest for sensitive technologies, data, and infrastructure, and for acquisitions rather than true greenfield startups. Export controls can restrict what technology a US operation may share, including with its own foreign parent and even with its foreign-national employees inside the US. Whether either applies to you depends on sector and structure; knowing they exist before term sheets are signed is the point.
Trade policy, tariffs, and investment screening rules move quickly and politically. Treat everything in this section as a map of what to ask about, not the current state of the rules.
The pattern under the checklist
Same lesson as the outbound direction: the mistakes happen when a company assumes its home defaults travel. The US is federal, so “US law” is fifty-plus legal systems wearing a trench coat; employment is regulated locally, tax runs state by state, and formation in Delaware answers almost nothing about operating in Massachusetts. Companies that succeed here get curious about the differences early, while curiosity is still cheap.
For the outbound version of this post, see the China business basics explainer. For the entity fundamentals, see LLC vs corporation.
Further reading
- LLC vs Corporation: Which Entity, Plainly
- Doing Business in China: Five Legal Basics US Founders Get Wrong
- Business Law: all posts
I am a law student, not a lawyer, and this post describes general concepts, not current regulatory requirements. Nothing on this site is legal advice. For a real market entry, talk to licensed US counsel and tax advisors.
