What this is: Businesses may be interested in conducting operations in US territories for several reasons, including access to the larger US market, favorable tax laws and incentives, a more stable political and economic environment, access to skilled labor and infrastructure and cultural proximity to the mainland US.
What this means: However, don’t assume that you can just “jump in” and start doing business in US territories. Each territory presents its own set of challenges, opportunities and roadblocks. Here are some actions you should take before doing business in a US territory.
There are several reasons why a business might consider doing business in a US territory. The obvious are tax benefits, access to US markets and a similar legal and regulatory environment. However, you should consider other factors like local infrastructure, workforce availability and potential political and economic instability. While researching those challenges, you should consider these tips before staking your claim in these territories.
- Research the market: Before entering a US territory, it's important to research and understand the local economy, business culture, legal requirements and competition. This can include market research, visiting the territory and speaking with local business contacts.
- Comply with local laws and regulations: Each US territory has its own set of laws and regulations, including taxes, labor laws and data protection. It's important to research and understand these requirements and ensure compliance, as non-compliance can result in significant penalties.
- Build relationships: Building strong relationships with customers, suppliers and partners is key to success in any US territory. This can be achieved through regular communication, establishing trust and providing quality products and services.
- Hire local talent: Hiring local talent who understand the culture and language can be key to success in a US territory. This can help to build relationships, increase credibility and improve communication with customers, suppliers and regulatory bodies.
- Adapt to cultural differences: The US is a culturally diverse country, and cultural differences can play a role in how business is conducted in different territories. It's important to understand and respect local customs and traditions and adapt business practices accordingly.
- Utilize resources: There are many resources available to companies looking to do business in the US, including government agencies, trade associations and local chambers of commerce. Utilizing these resources can help companies navigate the US market and achieve success. Also consider using a specialized service company that has experience with territory interactions.
Expanding into US territories requires careful research and planning and utilizing available resources. By taking these steps, companies can increase their chances of success in the US market and achieve long-term growth.
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Can any business change their domicile to a foreign country?
For a company to re-domicile, it must be permitted in both its originating jurisdiction and in the destination jurisdiction. Re-domiciliation is commonly allowed in offshore financial centers, such as the British Virgin Islands and the Cayman Islands and is also permitted by Delaware law. You can read more in our article Transferring Domicile From One Country to Another.
What is a Legal Entity Identifier?
An LEI is a unique 20-digit alphanumeric code based on the ISO 17442 standard assigned to legal entities. It connects to key reference information that enables the clear and unique identification of legal entities participating in financial transactions. The publicly available LEI data pool serves as a global directory which greatly enhances transparency in the global marketplace that provides much-needed transparency for the benefit of users in both the private and public sectors. You can find out more in this article, The Quick and Easy Guide to Using a Global Legal Entity Identifier.
Are there any special steps when incorporating in the US Virgin Islands?
Unlike most US states, the USVI requires corporations to have a minimum of 3 directors, 3 officers, a president, treasurer and secretary. Corporate directors are not allowed. Stock must also be registered and there is a minimum capital requirement of $1,000.
Once formed, corporations that plan to do business in the US Virgin Islands must obtain and regularly renew a business license. Corporations wishing to obtain a business license must complete the proper applications in addition to keeping certain documents on file with the Department of Licensing and Consumer Affairs. You can read more in our article US Virgin Islands: Incorporation and Registration in a Nutshell.
This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.