Expanding your UK business to the U.S. is an exciting opportunity, but it comes with significant costs. Many founders underestimate the expenses involved, leading to budget overruns and unnecessary stress.
To help you plan effectively, we’ve broken down the real costs of U.S. expansion—from incorporation to hiring and operations.
1. U.S. Business Incorporation Costs
Before you can operate in the U.S., you’ll need to legally establish your business. The cost depends on whether you choose an LLC or C-Corp, and the state you incorporate in.
📌 Typical Incorporation Costs:
| Expense | LLC Cost | C-Corp Cost |
|---|---|---|
| State Filing Fees | $50 – $500 | $90 – $500 (Delaware: $90) |
| Registered Agent Fee | $100 – $300/year | $100 – $300/year |
| Annual Franchise Tax | Varies by state | Delaware: $400+ per year |
| Lawyer or Incorporation Service | $500 – $3,000 | $1,000 – $5,000 |
| EIN (Employer ID Number) | Free | Free |
💡 Estimated Cost to Incorporate: $1,000 – $5,000 upfront, plus $500 – $1,500 annually.
👉 Pro Tip: If you plan to raise U.S. investment, set up a Delaware C-Corp, as most VCs require it.
2. Banking & Financial Setup Costs
Once your business is incorporated, you’ll need a U.S. bank account and payment processing system.
📌 Typical Banking Costs:
✅ Business Bank Account: Free to $50/month (Mercury, Brex, or traditional banks).
✅ Merchant Processing (Stripe, PayPal, Square): 2.9% + $0.30 per transaction.
✅ Accounting Software (QuickBooks, Xero): $25 – $100/month.
✅ U.S. Accountant (for tax compliance): $2,000 – $10,000 per year.
💡 Estimated Cost: $2,500 – $10,000 per year, depending on transaction volume and complexity.
👉 Pro Tip: Use a fintech bank like Mercury or Brex for low fees and easy international access.
3. U.S. Hiring & Payroll Costs
Hiring in the U.S. is one of the biggest expenses for UK businesses, as salaries are much higher than in the UK.
📌 Typical U.S. Salaries (Compared to UK):
| Role | UK Salary (£) | U.S. Salary ($) |
|---|---|---|
| Software Engineer | £60K – £80K | $120K – $180K |
| Sales Executive | £50K – £90K | $80K – $150K + commission |
| Marketing Manager | £50K – £70K | $90K – $140K |
| Customer Success Manager | £45K – £65K | $70K – $120K |
📌 Additional Costs for Hiring U.S. Employees:
✅ Payroll Taxes: 7.65% (Social Security & Medicare) + state-specific taxes.
✅ Health Insurance: $500 – $1,000 per employee per month.
✅ Recruitment Fees: 15% – 30% of annual salary if using a recruiter.
💡 Estimated Cost Per Employee: 30% – 50% higher than UK salaries, plus benefits and taxes.
👉 Pro Tip: Start with contractors or an Employer of Record (EOR) before committing to full-time U.S. employees.
4. Office Space & Operations Costs
Many UK businesses start remotely, but a U.S. address can add credibility when expanding.
📌 Office & Workspace Costs:
🏢 Coworking Spaces (WeWork, Industrious, Regus): $300 – $800/month per person.
📍 Virtual Office Address (for business presence): $50 – $200/month.
🏬 Dedicated Office Lease (New York, San Francisco, Miami): $3,000 – $10,000/month.
💡 Estimated Office Costs: $500 – $5,000/month, depending on size and location.
👉 Pro Tip: Start with a virtual office and coworking space before committing to a lease.
5. Legal & Compliance Costs
The U.S. has strict tax and compliance laws, which vary by state.
📌 Typical Legal & Compliance Costs:
✅ Business Insurance (Liability & Workers’ Comp): $1,000 – $5,000 per year.
✅ Trademark Registration (if needed): $250 – $500 per class.
✅ U.S. Tax Filings & Compliance: $2,000 – $10,000 per year.
✅ Employment Contracts & Legal Agreements: $1,500 – $5,000 upfront.
💡 Estimated Compliance Costs: $5,000 – $15,000 per year, depending on complexity.
👉 Pro Tip: Work with a cross-border accountant to avoid tax penalties.
6. Marketing & Sales Costs
📌 Common U.S. Sales & Marketing Expenses:
✅ Website & Localization: $2,000 – $10,000 (adapting UK branding to U.S.).
✅ Google Ads & LinkedIn Ads: $3,000 – $15,000/month (for brand awareness).
✅ Sales Outreach (LinkedIn Sales Navigator, Email Tools): $100 – $500/month.
✅ Networking & Conferences: $1,000 – $5,000 per event.
💡 Estimated Sales & Marketing Costs: $5,000 – $20,000 per month for serious U.S. growth.
👉 Pro Tip: Invest in direct sales & LinkedIn outreach—U.S. businesses expect proactive sales efforts.
Total Estimated Cost to Expand to the U.S.
📌 Estimated Year 1 Costs for UK Businesses Expanding to the U.S.:
| Expense Category | Estimated Cost |
|---|---|
| Incorporation & Legal Setup | $1,000 – $5,000 |
| Banking & Finance | $2,500 – $10,000/year |
| Hiring & Payroll | $80,000 – $200,000 per employee |
| Office & Operations | $500 – $5,000/month |
| Legal & Compliance | $5,000 – $15,000/year |
| Marketing & Sales | $5,000 – $20,000/month |
📌 Total Expansion Budget:
🔹 Minimum Cost: $50,000 – $100,000 (lean remote team, minimal marketing).
🔹 Growth Budget: $250,000 – $500,000 (hiring key roles, aggressive U.S. growth).
👉 Pro Tip: Start lean with a virtual office, contractors, and targeted marketing, then scale.
Final Thoughts: How to Budget for a Successful U.S. Expansion
Expanding to the U.S. is a big investment, but with the right planning, it can lead to huge revenue growth.
📌 Key Takeaways:
✅ Incorporate in the right state (Delaware C-Corp for startups, LLC for small businesses).
✅ Plan for higher salaries—U.S. employees cost 30-50% more than UK hires.
✅ Consider payroll taxes & benefits—healthcare is a major cost.
✅ Invest in direct sales & marketing—the U.S. market is competitive.
✅ Start lean & scale wisely—virtual offices and EORs can save costs.
💡 Need expert help with your U.S. expansion budget? Canyonstone Partners helps UK businesses navigate costs, hiring, incorporation, and sales strategy.