If you're ready for your next step and decided to hit the US market, here are some tips for a smooth start:
- Create your circle of trust – you're about to get into a whole new world of regulatory requirements and you need the best advisors to walk you through it.
- You need Israeli and US CPA's as your Israeli one won’t always be aware of the different tax requirements.
- Same goes for attorneys. Most likely your Israeli business attorney won’t be able to help with US employment agreements etc.
- Get familiar with the different taxes – federal, state and local corporate taxes, sales and use tax, franchise tax and many others. Make sure your business structure and intercompany relationships are structured correctly or the best of your business requirements. On the other hand, don't be discouraged over tax issues and don't let it affect your business expenditure.
- Incorporating in Delaware doesn’t mean you don’t need to register in other states. Ask your US CPA or attorney about nexus laws. There are different nexus laws – corporate tax nexus could differ from sales tax nexus, so make sure you’re in compliance.
- Meet the deadlines. US authorities are very strict when it comes to late filing penalties, make sure you avoid them. Late filing a federal tax return of a US company with foreign ownership relations automatically calls for a $10,000 penalty. File an amended return if need be, but meet the deadline.
- HR in the US is completely different from Israel. Enroll with a payroll service provider that offers a full HR service package. They will make sure you're in compliance with all labor laws and regulations and will set up and administer all benefit plans for you.
- Have you been doing business in the US via your Israeli company? Ask your US CPA about protective filing. It won't put you under the IRS's radar but it will help you lower your risk of potential US tax liabilities.
- Were you able to secure your first order? Congratulations! Have your US CPA prepare a sales tax matrix for you demonstrating sales tax liability in all applicable states. Ask them if any click-through laws apply to you.
- Make sure you're properly covered insurance-wise. Your umbrella coverage via the Israeli company may not always cover your US business insurance needs.
- Open your mail. The majority of the notices you get from the different authorities require immediate attention.
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The article was written by Ayelet Shtaub , US Department Manager at Brooks-Keret Financial Management .
The US department provides an extensive range of solutions for start-up companies operating in the US. We make it easier for our customers to manage their business processes in the US by providing: american bookkeeping services on a relevant financial software, enabling better cash flow management, handling payroll management and working together with the company’s CPA to ensure legal and financial compliance.
