Expanding Into the US: The Financial Setup Most Businesses Get to Too Late
The US is the largest single market most UK businesses will ever enter, and the commercial side usually gets serious attention — market research, pricing, a first hire, a lawyer for the entity question.
The financial plumbing gets attention later, normally when the first significant customer asks how they should pay you. By then some decisions have already been made by default.
Here's the checklist, in the order the questions actually arise.
1. How will US customers pay you?
The default answer — international wire to your UK account — works, and it's the most expensive and slowest option available.
Your US customer must initiate an international wire, pay their bank's outbound fee, handle unfamiliar SWIFT details, and in many cases get it approved internally as a foreign payment. Some companies' accounts payable systems make this genuinely difficult, and a few large US corporates simply won't do it without a struggle.
Meanwhile the payment routes through correspondent banks that can deduct along the way, and it lands in sterling at whatever rate applied on the day.
The alternative is a US-domiciled account — either a local collection account or a named multi-currency account with US routing details. Your customer pays by domestic ACH or wire, exactly as they'd pay any American supplier. Friction disappears, deductions disappear, and the money arrives in dollars, which you convert when it suits you.
For most businesses this is the single highest-impact decision on the list, because it affects whether customers pay promptly and whether the full invoice value arrives.
2. Will you hold dollars or convert immediately?
If you have any dollar costs — US contractors, a salesperson, software subscriptions, marketing spend, legal fees, sales tax remittances — holding a dollar balance and paying from it avoids converting twice.
Most businesses entering the US develop dollar costs faster than they expect. Converting every receipt to sterling and then buying dollars back for expenses is a round trip that costs a spread in each direction, on the same money.
3. What rate did you price at?
US pricing is usually set in dollars, because American buyers expect dollar pricing and comparing against local competitors demands it.
That means your margin on US sales is a function of GBP/USD. Price a product at $100 with a sterling cost base, and a 10% move in the pair moves your margin materially — on every unit, for as long as the price list stands.
Decide explicitly:
What rate is your US price list built on?
How often will you review it?
Will you hedge to protect it, or accept the variance and reprice periodically?
Businesses that never answer these find their US operation's profitability moving for reasons nobody in the US business can explain.
4. Sales tax is not VAT, and it may already apply
This one sits outside currency, but it arrives at the same time and catches people out badly.
US sales tax is set at state and local level. Obligations are triggered by economic nexus — broadly, a level of sales into a given state — and can apply without any office, employee or physical presence there. Requirements vary state by state, as do thresholds, taxability rules and filing deadlines.
A business selling software or goods into twenty states may have obligations in several of them without anyone having registered for anything.
Get specialist advice early. Retrospective registration across multiple states is considerably more expensive and more unpleasant than getting it right at the start. We work with specialists in this area precisely because it's a common gap.
5. How will you pay people?
Contractor, employer of record, or US entity with payroll — each has different mechanics, different costs and different currency implications.
Whichever route, salaries and contractor fees will be dollar-denominated and recurring. That's a predictable exposure, which makes it straightforward to hedge and expensive to ignore. See our piece on overseas payroll for the detail.
The sequencing that works
Before the first sale: decide how customers will pay, and set up dollar receiving arrangements. Retro-fitting this after you've onboarded customers onto wire payments is harder than doing it first.
Before the price list: agree the rate you're pricing at and whether you'll hedge it.
Before volume builds: get sales tax advice, with reference to where your customers actually are.
Before the first US hire: settle the employment structure and payment mechanics.
After six months: review everything. Your actual dollar in/out flows will look different from your forecast, and the netting opportunities usually only become visible once real data exists.
The pattern worth avoiding
The common failure isn't dramatic. It's a business that wins good US customers, gets paid slowly and expensively through wires, converts everything to sterling on arrival, buys dollars back for US costs, prices off a rate nobody revisits, and discovers a sales tax issue in year two.
None of those individually is fatal. Together they take a meaningful slice off the return from a market entry that was commercially sound.
The fix is a couple of conversations before the first invoice, rather than a clean-up after the first year.
William Fuller, Co-Founder of Orbis Exchange Group contact on 0203 918 5622
Ben James, Co-Founder of Orbis Exchange Group contact on 0203 918 5621