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.
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