Demand for services and goods reigning from the United Kingdom has been increasingly popular in the United States in recent years, with figures revealing more than $88 billion worth of services and goods exported from the UK to the US in 2019. This was a substantial increase of 8.7% during the first quarter of 2019, which in return helped strengthen free-trade agreements between these two nations.
The post-Brexit era has left the United Kingdom to renegotiate trade agreements with several leading world economies, and negotiations with the United States are still an ongoing ballgame for both governments. The changes in trade since leaving the European Union have seen small and medium-sized enterprises (SMEs) and corporations looking to relocate and operate within the US to help mitigate issues related to the ongoing negotiations.
Starting a business in the US: What you should know
A World Trade Organization Ease of Doing Business report has ranked the US as the 8th easiest country to do business in, British firms and SMEs are taking advantage of substantial low taxes, and a thriving capital market. Setting up in the US is no easy task, as a business formation service provider will need to be required, with the assistance of an American attorney. Formation services such as ZenBusiness or IncFile have helped thousands of new businesses submit business formation documents.
Consider the following:
- For any non-US citizen looking to set up new entrepreneurial ventures in the US, appropriate federal approvals through an E-2 Treaty Investor Visa or EB-5 Visa should be considered.
- Various business entities exist within the US economy, and entrepreneurs should ensure they choose an entity that will suit their business needs and should consider the tax regulations and personal liability of each.
- Make use of a registered agent to assist with articles of organization, and formation procedures.
- Submit and register for the appropriate taxes.
- Ensure appropriate licenses and permits are obtained beforehand through US entities located in the UK.
Current UK regulations for operating in the US strongly advise entrepreneurs and business owners to make use of a US attorney to assist with obtaining licenses for patents and intellectual property beforehand.
Post Brexit Business Opportunities
The US has an endless array of business opportunities for British entrepreneurs, but online research and reviews have shown that the most popular industries for British entrepreneurs in the US are currently:
- Arts and Culture
- Television, Film, and Media
- Information Technology and Software
- FinTech and Financial related services
Technology-based services and goods are among the most lucrative sectors for new British entrepreneurs, as the US has become the largest technology-driven market in the world. In 2019 alone, the US represented more than 31% of the global tech market.
Supply Chain Opportunities
There are various reasons why British entrepreneurs and business owners should consider supply chain opportunities. In the US, biotech and pharmaceuticals have become a leading industry that has seen the American pharmaceutical market as the largest in the world. This allows British entrepreneurs to look for new ways how to supply the rapidly growing demand for pharmaceuticals in America
Exports between the UK and US: Ongoing efforts
In 2016, more than 60 million British consumers accumulated $173 billion worth of online sales, an increase of 16% from 2015. At the time, these figures looked promising for many exporters and importers in both the UK and the US, but ongoing trade negotiations have left some British businesses feeling uncertain about their future financial endeavors in the US capital market.
This has led to some business owners, in various sectors and industries, relocating their trade and operations from the UK, to the US, allowing them more opportunity and freedom of doing business. Although the stakes are relatively high for relocation, new tariff rates, and import taxes will still need to be finalized and have left many doubtful about the economic relationship these two countries share.
Since Brexit negotiations and the first referendum to leave the European Union was released in 2016, research has shown more than 5,300 firms in the UK, not re-entering the EU market, and 5,430 firms completely cutting their exports to the EU in 2016 as uncertainty loomed. Trade deals between the UK and continental Europe are more established in the current environment, but the US remains a top priority for both the government and private sector.
There are various factors to consider as a British entrepreneur and business owner looking to move their business to the US. The United States offers more than 300 million consumers, a substantially larger consumer base than offered in the post-Brexit UK. With ongoing trade negotiations between these two nations, leading firms and corporations are exiting to re-enter trade between the UK and EU, and have found that setting up in the US will offer more long-term financial benefits.