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| US branch of a UK company? |
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| Branch of UK company in the US?
"For the overwhelming majority of UK companies, a branch in the USA of your UK company (or any other company in your group) is not the way to go. A branch of a UK company is just an extension of that company within the USA. It subjects the company to:
(1) being a more visible target for lawsuits and claims in the States; and
(2) being liable for US federal, state, and possible local income and other taxes.
This applies to both unregistered and registered branches.
An unregistered branch is any US place of business or the like of a foreign company that is not registered to do business in the US state in which it is conducts its business.
A registered branch is one that is formally registered to do business in that US state. If under the laws of a particular US state, the foreign company's business activities through its operations in that state are sufficient to require it to register there, it must do so or run the risk of penalties. This does not mean just establishing a sales office in that state, it can also mean: having an employee there; having a stock of goods there, including on consignment; and other "links" with that state.
One could loosely say that any type of business activities within the USA involving some sort of presence of the foreign company can be viewed as a "branch."
Source: Aaron Wide, a partner in New York law firm, Gallet Freyer & Berkey, writing for a UKTI publication, "Establishing a business presence in the USA."
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