In May 2021, Royal Dutch Shell lost a landmark court case which ruled that the energy giant must bring its emissions in line with the Paris Agreement. Shell had already planned to become net-zero business by 2050, but the ruling means they must slash emissions faster and harder.
However, like any country, there are a number of quirks that come with doing business in the US, any of which could catch out the unwary.
Here we delve into some of the potential issues you should be aware of when seeking to expand your business into the US market.
The first thing to remember when doing business in the US it that the country is comprised of a series of states that are arranged under a federal system of government, meaning that laws are made at both the national and the state level.
Federal Legal System
National laws will generally be broader in scope, governing areas such as patent and copyright law, and will of course apply throughout the US.
Meanwhile state or ‘local’ laws are generally set by individual states and can cover a wide range of issues including employment rights, environmental regulations and tax rates – something which can lead to one state differing quite considerably from another on a number of issues.
Because of this it is important that businesses have a firm grasp on how this parallel legal system works and be aware when expanding into new states that operations may need to be adapted for local laws.
If there are any plans to relocate staff to oversee your US expansion, or if you are hoping to tap into the global talent pool in order to build your US team, then you will need to be aware of how to navigate the complexities of US immigration.
As with most countries, the US requires all foreign nationals to obtain permission if they seek to work in the country, with all work visas subject to approval from US Citizenship and Immigration Services.
However, doing so can be far from straightforward and any businesses expanding to the US would be wise to seek advice from a US immigration attorney to help identify the various categories of visa available and select the one that is most suitable for your staff.
It is also important that foreign owned firms and their workers do not grow complacent once they have obtained their papers as any violations of the terms of their visa can result in severe consequences.
Any business manager seeking to operate in the US would do well to educate themselves on America’s unique product liability laws.
US product liability
More so than any other country, the US maintains strict tort liability laws, with firms in the US generally far more exposed than elsewhere to prosecution in the event of someone injuring themselves using their products.
These liability laws are extremely wide in scope, with all parts of the production chain, from manufacturers, to distributers, to retailers, all able to be held liable if a defective product causes injury to a consumer.
On top of this, the damages for product liability cases in the US can be very high, with cases generally being determined by the extent of the injury and including compensation for both direct and indirect losses.
With this in mind, businesses operating in the US are advised to maintain extreme vigilance when it comes to product liability and ensure they have adequate insurance coverage to cover against any potential claims.
One relatively new aspect to doing business in the US is the rise of US trade protectionism under US President Donald Trump.
Since assuming office, Trump has made much about the US rebalancing its trade relationship with the rest of the world, sparking concerns of a US-China trade war after it imposed tariffs on £200bn worth of Chinese goods.
While Trump’s ire has been mostly focused on China so far, the president has also set his sights on rebalancing trade with Europe, with the White House slapping tariffs on a number of EU exports in 2018.
If you plan to pursue a business opportunity in the US then you should be aware of the potential impact trade policy could have on both importing and exporting. Even if your company’s products are not currently on any list of tariffs, be aware that this may change depending on whether trade tensions continue to escalate.
Taking everything into consideration however, the US is still easily one of the most business friendly markets for foreign-owned companies to expand into.
So long as you prepare suitability for some of the legal hurdles you may face, you should find that there is ample opportunity for your company to flourish when expanding into the US.
Currencies Direct is one of Europe's leading non-bank providers of currency exchange and international payment services. Since we were formed in 1996, we've maintained our focus on providing innovative foreign exchange and international currency transfer services to corporations of all sizes, online sellers and private individuals. We have also expanded our services to provide dynamic and pioneering "business to business" solutions to help companies, tier 2/3 banks and other non-bank financial institutions to process their international payments. Our headquarters are in the City of London (United Kingdom) and we have operations in continental Europe, Africa, Asia, and the United States. Currencies Direct is jointly owned by private equity firms Palamon Capital Partners and Corsair Capital.