Forming a US Company From the UK: A Guide for British Founders

The USA is the natural next market for many British businesses: the same language, a huge customer base and a startup ecosystem that UK founders know well. Many expand through a US company, either owned personally or as a subsidiary of their UK limited company. This guide covers what British founders should consider.

Why British founders form a US company

• US clients and procurement teams prefer contracting with a US entity.
• USD banking and payouts without repeated conversion.
• US payment platforms and marketplaces with full US features.
• US investors usually invest in Delaware C-Corporations.
• Ring-fencing US activity and liability from the UK business.

LLC or Inc? The UK angle

This is the most important decision, and the UK side matters as much as the US side.

• In the USA, a single-member LLC is usually a disregarded entity, and its profits pass through to the owner.
• In the UK, HMRC's treatment of US LLCs has been the subject of litigation and guidance over the years. A US LLC may be treated as opaque (like a company) for UK purposes in many cases, which can create a mismatch: the USA looks through the LLC to you, while the UK sees a separate company. This can affect double tax relief and how and when profits are taxed in the UK.

Because of this, many UK founders choose a US C-Corporation, which both countries treat as a company, especially for trading businesses, subsidiaries and fundraising. Others use an LLC with careful planning. Get UK tax advice before deciding. See LLC or Inc for non-residents.

Owned personally or by your UK company?

• Owned by your UK limited company: a US subsidiary, keeping the group structure tidy. See US subsidiary for a foreign company.
• Owned by you personally: simpler for a new venture, but think about UK personal tax on profits and dividends.

The US–UK tax treaty

The comprehensive US–UK income tax treaty:

• generally limits US tax on business profits to income attributable to a US permanent establishment,
• reduces withholding on dividends, interest and royalties, often substantially, and
• provides mechanisms for double tax relief and dispute resolution.

Claiming treaty benefits requires being a UK tax resident, meeting the treaty's conditions and providing the right forms to US payers. See US tax treaties and W-8BEN vs W-8BEN-E.

UK rules to discuss with your accountant

• Controlled foreign company (CFC) rules for UK companies with foreign subsidiaries.
• Transfer pricing if your UK and US companies trade with each other.
• Reporting the US company and its income on your UK returns.
• Where the company is managed: a US company managed and controlled from the UK can, in some circumstances, be treated as UK tax resident.

Which state?

For most UK founders without a US office: Wyoming (LLC or low-cost corporation) or Delaware (corporation for investment). If you open a US office, the state where it sits. See which state should a non-resident choose.

Banking and payments

UK residents can open US business bank accounts remotely with our bank packages. See the US business bank account guide.

US compliance

• Annual state report and registered agent.
• Form 5472 + pro forma 1120 for a foreign-owned single-member LLC, or Form 1120 (+ Form 5472) for a corporation. See Form 5472 explained.

How UCB helps

We form US LLCs and corporations for UK founders and UK companies, obtain the EIN, open the US bank account and handle annual US filings, working alongside your UK accountant on the UK side.

Expanding from the UK? WhatsApp us at +91 8105 199 399 or email info@ucbsolutions.com and we will propose the right US structure.