Expanding Your Startup to the US: Entity, Banking, Payroll and Choosing Your First Hub

For many founders outside the US, the first American customer or the first conversation with a US investor is what makes expansion feel urgent. Most of the delays come from paperwork, because each step depends on the one before it. A bank account needs an entity and payroll needs a bank account, and every state where you pay people adds its own tax registrations. Working through the steps below in order can save several months between incorporation and the team's first day in its new city.

1. Set Up the Right Entity

Most venture-backed founders incorporate a Delaware C-corporation. US investors know Delaware corporate law well, and their standard financing documents are written for it. According to the Delaware Division of Corporations 2025 annual report, more than two-thirds of the Fortune 500 and nearly 70% of US-based IPOs in 2025 chose Delaware as their corporate home.

An LLC is cheaper and simpler to run, which suits a founder testing the US market with a small sales presence. The trade-off appears at fundraising, because most US venture funds cannot or will not invest in an LLC, so a later conversion adds legal cost.

If your company already exists in another country and you plan to raise from US funds, investors may ask for a "Delaware flip." In a flip, the shareholders swap their shares in the home company for shares in a new Delaware parent, and the original company becomes its subsidiary. Flips are easier to complete before a priced round, and the tax consequences depend on your home country, so they need advice on both sides.

2. Get an EIN and Open a US Bank Account

The Employer Identification Number (EIN) is the company's federal tax ID, and almost everything else depends on it. Founders based outside the US cannot apply online. The IRS Taxpayer Advocate Service explains that international applicants can apply by phone, fax or mail using Form SS-4. A phone application to 267-941-1099 returns the number during the call, a fax takes about four business days, and mail takes about four weeks, so the phone route is worth an afternoon call from Europe or an evening call from Asia.

With the EIN and incorporation documents in hand, you can open a business bank account. Traditional US banks often still ask a director to visit a branch, while several fintech-led banks open accounts for non-resident founders remotely. Many companies end up with one of each, using the fintech account for day-to-day spending and the traditional bank once balances grow or a lender requires it.

3. Register With the States Where You Operate

A Delaware company with employees or an office in New York, California or Massachusetts usually has to register in that state as a "foreign" corporation and file returns there too. Each state also runs its own payroll withholding and unemployment insurance accounts.

Sales tax follows separate rules: since the Supreme Court's 2018 decision in South Dakota v. Wayfair, states can require remote sellers to collect sales tax without any physical presence. South Dakota's original threshold of $100,000 in sales or 200 transactions became a common reference point for other states, although South Dakota and many others have since dropped the transaction count. States also differ on whether SaaS is taxable at all, so a software company selling across the US needs to check each market separately.

Foreign ownership also brings a federal filing, Form 5472, which a US corporation that is 25% or more foreign-owned, and a single-member LLC owned by a foreign person, must file with the annual return. As Greenback Tax Services explains, missing it carries a minimum penalty of $25,000 per form, which is why a US accountant who works with foreign-owned companies is worth hiring in year one.

4. Decide How You Will Pay People

Founders have two main routes for the first US hires. A professional employer organization (PEO) becomes the co-employer of your staff and handles payroll, benefits and state registrations under your own US entity. An employer of record (EOR) goes further and legally employs the person on your behalf, which lets you hire before you have a US entity at all.

An EOR is often the fastest way to make one or two hires while you test the market. Once the US team grows past a handful of people, the per-employee fees usually make it cheaper to run payroll through your own entity with a PEO. Health insurance is the item that surprises many international founders, because in the US it is largely provided through the employer and adds a large cost to each salary package.

5. Choose Your First Hub

New York is the natural choice for fintech, media, fashion, consumer brands and any company that sells to large enterprises, since so many of their headquarters are in Manhattan. Most startups cluster in Flatiron, Union Square, SoHo and NoMad, while the Financial District offers lower rents and landlords who are among the most flexible on concessions for longer deals. Teams of fewer than eight people usually start in coworking, teams of eight to 25 move into private suites, and larger teams sign their own lease. For a team arriving from abroad, it helps to start the search on Tandem and compare those options by neighborhood before anyone lands in the city.

Subleases are worth a look for a team that needs to move fast. Most come furnished or built out, rents in Manhattan typically sit 10 to 20% below comparable direct leases, and a well-run search takes about five to nine weeks from start to move-in. Because the building owner must approve every sublease, read up on how subleasing works in NYC before signing, including the two to four weeks that consent usually takes.

San Francisco remains the center of the AI industry and the place where early-stage capital is most concentrated, with Y Combinator and many seed funds operating nearby. Engineering salaries are among the highest in the country, and SoMa and the Financial District have the most office inventory for small teams, while Mission Bay is closely tied to biotech through the UCSF campus.

Smaller hubs can make more sense depending on the product. Boston leads in biotech, robotics and deep tech, drawing on MIT and Harvard. Charlotte is the second-largest banking center in the US, home to Bank of America's global headquarters, and Fortune has described how its banks have helped build a local fintech scene. Austin and Miami offer lower costs and no state income tax in Texas or Florida, which helps when hiring senior people who compare offers after tax.

6. Get the Team on the Ground

The final step is moving people, and US work visas take longer than most founders expect. The L-1A visa lets a company transfer an executive or manager who has worked for a related company abroad for at least one year in the last three years. For a brand-new US office, Clark Hill notes that approvals are given for only one year at first, after which the company has to show the office is operating. Founders with a strong record of press, awards or funding often qualify for the O-1 visa for extraordinary ability, and citizens of treaty countries can use the E-2 investor visa when they put substantial capital into the US business.

The L-1 and E-2 both require evidence that the US company is operating, such as a bank account, payroll records and an office address, which is one more reason to work through the earlier steps in order. Founders who start the visa conversation at the same time as incorporation usually arrive with the paperwork ready, while those who leave it until after the first hire often spend months running the US business from a different time zone.