Why do I need a subsidiary?

If you’re serious about setting up a company in the US, you should create a subsidiary to protect your business. Establishing a subsidiary will protect the parent company from lawsuits and claims in the US, and ensures you’re paying the correct federal, state and local taxes on your business.

The safest way for international businesses to trade in the US market is to create a subsidiary company. For the majority of international businesses exploring the US market, setting up a ‘branch’ of their company in the USA is not a safe option because creating a branch leaves your parent company open to liability, lawsuits and high taxes. A subsidiary will:

  • reduce your liability and mean that you’re less likely to run into risk, penalties or negative consequence
  • ensure that you’re paying the correct amount in state, local and federal taxes while you’re trading.

Of course, you don’t have to establish a subsidiary company right away. If you’d simply like to test the US market before committing to all the legal and financial cost involved in setting up a subsidiary, you can use Foothold America’s services.

Similar questions about 'Establishing a presence'

What do I need to open a US bank account? Who can help me set up an American bank account? What happens if my US employee signs off the sale of goods or services? How do tax levels vary from state to state? What are the time differences between the UK and USA? What is the cheapest way to explore the US market? How easily can I withdraw from the US if I change my mind? Is the USA the largest importer of UK goods and services? Is it easy for a British business to expand into the USA? Is now a good time for a UK business to expand into America? How long does it take to start trading in the US? What are the tax implications of setting up a business in the USA? Do foreign corporations have to report profits if they are operating in America? Has Foothold America helped UK-based businesses to expand into the US before? Why does it take so long to set up a subsidiary in America? Why do I need a Federal Tax ID number? Where can I get support and advice if I am considering expanding to the US? Are my US employees allowed to sign off on sales of goods and services? How do I set up a company in the US? How do I expand my business to the USA? Why should I explore the US market? What is a subsidiary? What is a C corporation? Should I set up a C corporation or an LLC? How is an LLC taxed? How is a C corporation taxed? Why do I need an EIN? What is a Federal Tax ID number? What level do I pay tax at in the US? How do I open an American bank account? Why does my business need an American bank account? What is the easiest way to explore the US market? Is there a low risk way to explore the US market? Is my business ready to explore America? Can a British business explore the US market? What should I consider when choosing a location for my expanding business? Who can help me to set up a subsidiary in the USA? Will my US employees expose my business to US corporation tax on sales they generate? What can the US market offer my business? How do I form a subsidiary? Which states should I set up my subsidiary in? How much does it cost to set up a subsidiary? How long does it take to set up a subsidiary? What is an LLC? What is an EIN? What is the IRS?

Ask us a question

Ask Us

Latest News

The Similarities and Differences of the Work Culture in the United Kingdom vs America

Given that we share a common history, love the same pop culture and enjoy a special relationship, you’d be forgiven for thinking that British and American workers would have a great deal in common. However, as we’ve discussed previously, there are many ways in which we’re poles apart: Americans well and truly work in the...

All News