Expanding to the U.S. market means navigating a complex web of federal, state, and local regulations that vary significantly from other countries. Many international brands underestimate the compliance burden and find themselves facing delays, fines, or even product recalls because they missed critical legal requirements.
The U.S. regulatory landscape isn't just complicated—it's fragmented. Unlike countries with centralized regulatory systems, the U.S. operates across multiple jurisdictions with overlapping authority. What's legal in one state might be restricted in another. Federal agencies set baseline standards, but states often impose additional requirements that can fundamentally change how you operate.
Understanding these legal requirements before you launch protects your investment and prevents costly mistakes that damage your brand reputation in a new market.
Federal Business Registration and Tax Requirements
Every international company selling in the U.S. needs an Employer Identification Number (EIN) from the IRS, even if you're not hiring U.S. employees. This nine-digit number functions like a social security number for your business and is required for opening bank accounts, filing taxes, and establishing business relationships with U.S. partners.
Your tax obligations depend on how you structure your U.S. presence. If you're selling directly to U.S. consumers without physical presence, you might only face income tax on profits. However, establishing a physical location—whether a warehouse, office, or retail space—triggers state and local tax obligations including income tax, franchise tax, and property tax.
Sales tax compliance has become significantly more complex since the 2018 Wayfair Supreme Court decision. Previously, only businesses with physical presence in a state needed to collect sales tax. Now, economic nexus rules mean you must collect sales tax in states where you exceed certain revenue or transaction thresholds, even without physical presence. These thresholds vary by state, ranging from $100,000 to $500,000 in annual sales.
Import duties and customs compliance require careful attention as well. Your products fall under specific Harmonized Tariff Schedule classifications that determine duty rates. Misclassification—even unintentional—can result in penalties and delayed shipments. Working with a licensed customs broker ensures your import documentation meets U.S. Customs and Border Protection requirements.
Product-Specific Regulatory Compliance
FDA regulation applies to far more products than international brands typically realize. Obviously food, beverages, dietary supplements, and cosmetics require FDA compliance, but the agency also regulates medical devices, certain electronics that emit radiation, and even pet food. Registration requirements, facility inspections, and labeling standards vary by product category but are strictly enforced.
Food and beverage brands face particularly detailed requirements. Your manufacturing facility must register with the FDA and comply with Food Safety Modernization Act (FSMA) standards, which include hazard analysis, preventive controls, and documentation requirements. Labels must include nutrition facts panels formatted to exact FDA specifications, ingredient lists in descending order by weight, allergen declarations, and country of origin statements.
Consumer products fall under Consumer Product Safety Commission (CPSC) jurisdiction. This includes everything from furniture and textiles to toys and electronics. Products must meet safety standards that often require third-party testing and certification. Children's products face even stricter requirements including lead content limits, phthalate restrictions, and age-grading based on safety testing.
Cosmetics and personal care products need FDA-compliant ingredient labeling, safety substantiation, and adverse event reporting systems. While the FDA doesn't pre-approve cosmetics, you're responsible for ensuring safety and accurate labeling. California's recently passed Cosmetic Fragrance and Flavor Ingredient Right to Know Act adds state-level transparency requirements that effectively apply nationwide since most brands create uniform labels.
Electronics and electrical products must meet FCC standards for electromagnetic interference. Many products also require UL or ETL safety certification from nationally recognized testing laboratories. Energy efficiency standards from the Department of Energy apply to everything from appliances to lighting, with specific labeling requirements that must appear on packaging.
State-Level Business Requirements
Forming a legal entity in the U.S. provides liability protection and simplifies operations. Most international brands choose between forming a U.S. subsidiary as a C-Corporation or LLC, or registering as a foreign entity authorized to do business in relevant states. Delaware and Wyoming are popular incorporation states due to business-friendly laws and established corporate legal frameworks, but you'll also need to register in any state where you have physical presence or significant operations.
State business licenses vary dramatically. Some states require general business licenses while others only mandate industry-specific permits. Professional services, food service, retail, and manufacturing often face additional licensing at both state and local levels. Researching requirements in your specific operating states prevents operating illegally, which can result in fines and force business closure.
Employment laws differ substantially by state. If you're hiring U.S. employees, you must comply with state wage and hour laws, which often exceed federal minimums. California, New York, and other states have significantly higher minimum wages, strict overtime rules, and mandatory paid sick leave. State unemployment insurance and workers' compensation insurance are required for any business with employees.
Privacy laws are increasingly state-specific. California's Consumer Privacy Act (CCPA) and California Privacy Rights Act (CPRA) impose strict data collection, use, and disclosure requirements that apply to any business serving California residents. Virginia, Colorado, Connecticut, and other states have passed their own privacy laws with varying requirements. If you're collecting customer data online, compliance with multiple state privacy regimes is necessary.
Industry-Specific Licensing and Permits
Alcohol requires a three-tier distribution system in most states, meaning you cannot sell directly to consumers or retailers. You must work through licensed importers and distributors, and each state has its own alcohol control board with unique licensing requirements. Some states maintain monopoly control over spirits distribution, while others allow private distribution. Direct-to-consumer wine shipping is permitted in some states but banned or restricted in others.
Tobacco and nicotine products face federal FDA regulation plus state and local licensing. Many jurisdictions require retailer licenses, tax stamps, and compliance with advertising restrictions. Vaping products fall under similar regulations despite being relatively new, with evolving requirements that vary significantly by location.
Healthcare and medical products require extensive FDA clearance or approval depending on risk classification. Medical devices follow a tiered system from Class I (lowest risk) to Class III (highest risk), with progressively stricter premarket requirements. Drug approval through the FDA's New Drug Application process is lengthy and expensive, requiring substantial clinical trial data.
Financial services face regulation from multiple federal agencies including the SEC, FDIC, and CFPB, plus state-level financial services regulation. Fintech companies must navigate money transmitter licenses in most states, anti-money laundering compliance, and consumer protection regulations that vary by product and jurisdiction.
Cannabis remains federally illegal despite state-level legalization in many jurisdictions. This creates a complex situation where state-legal businesses cannot access federal banking services and face unique compliance, taxation, and operational challenges. International brands considering U.S. cannabis opportunities must work with specialized legal counsel.
Intellectual Property Protection
Protecting your intellectual property in the U.S. market should happen before you launch. The U.S. operates on a first-to-file trademark system, meaning your brand name and logos should be registered with the U.S. Patent and Trademark Office (USPTO) as early as possible. Foreign trademark registration doesn't automatically protect you in the U.S., and you may find someone else has registered your brand name if you delay.
Patent protection follows similar principles. If you have patented technology or designs in your home country, filing U.S. patent applications preserves your rights and prevents competitors from copying your innovations. The U.S. offers utility patents for functional innovations, design patents for ornamental designs, and plant patents for new plant varieties.
Copyright automatically protects creative works, but registering copyrights with the U.S. Copyright Office provides additional legal benefits including the ability to sue for infringement in federal court and eligibility for statutory damages. This matters particularly for brands with significant creative content including photography, written materials, software, or artistic designs.
Trade secret protection requires you to take reasonable steps to keep confidential information secret. This includes employee non-disclosure agreements, limited access to sensitive information, and contractual protections with partners and vendors. Unlike patents or trademarks, trade secrets don't require registration but do require active protection measures.
Labor and Employment Compliance
Hiring U.S. employees triggers extensive federal and state employment law obligations. Federal requirements include withholding income tax and Social Security/Medicare taxes, providing workers' compensation insurance, and complying with workplace safety regulations from OSHA. The Fair Labor Standards Act sets minimum wage, overtime, and child labor standards that apply to most employers.
Anti-discrimination laws prohibit employment decisions based on race, color, religion, sex, national origin, age, disability, or genetic information. This affects not just hiring and firing but also pay, promotion, job assignments, training, and every aspect of employment. State and local laws often extend protections to additional categories including sexual orientation, gender identity, marital status, and political affiliation.
Workplace posters and notices must be displayed informing employees of their rights. Federal and state governments provide required posters covering minimum wage, discrimination protections, safety regulations, and other employee rights. Failing to display required posters can result in fines even if you're otherwise compliant.
Immigration compliance matters if you're hiring foreign nationals. The H-1B visa program allows specialty occupation workers, while L-1 visas permit intracompany transfers. Each visa category has specific requirements, annual caps, and processing timelines. You must complete I-9 employment eligibility verification for every employee and maintain these forms properly to demonstrate immigration law compliance.
Environmental and Safety Regulations
Environmental compliance starts with understanding EPA regulations that apply to your operations. Air emissions, water discharge, hazardous waste disposal, and chemical storage all face federal regulation. State environmental agencies often impose additional requirements, and some states like California have substantially stricter environmental standards than federal baselines.
Product environmental standards affect packaging and product design. Many states have banned or restricted certain packaging materials, particularly single-use plastics. Extended producer responsibility programs in some states require brands to fund recycling programs for their packaging. California's Proposition 65 requires warnings for products containing chemicals known to cause cancer or reproductive harm, with a list covering hundreds of substances.
Workplace safety falls under OSHA jurisdiction. Employers must provide safe working conditions, proper safety training, and protective equipment where necessary. Industry-specific OSHA standards apply to manufacturing, warehousing, construction, and other sectors. Workplace injuries must be recorded and reported, and serious incidents require immediate OSHA notification.
Product safety testing and certification through nationally recognized testing laboratories demonstrates compliance with safety standards. Many retailers require UL, ETL, or similar certification before accepting products. While not always legally required, these certifications provide liability protection and market access that make them practically necessary.
Contracts and Business Relationships
U.S. contract law varies by state, making it important to specify which state's law governs your agreements. Most business contracts include choice of law and forum selection clauses that determine where disputes are resolved. Understanding these provisions before signing protects you from being forced to litigate in inconvenient jurisdictions under unfamiliar legal standards.
Terms of service and privacy policies for websites are legally required in many jurisdictions and shape your liability exposure. These documents must comply with state privacy laws, accurately describe your data practices, and provide required consumer rights. Generic templates often fail to address your specific business model or comply with all applicable laws.
Retailer and distributor agreements include provisions that significantly impact your business including payment terms, return policies, marketing contributions, and termination rights. Understanding these terms before signing prevents surprises when retailers exercise contractual rights you didn't fully appreciate.
Independent contractor classification faces strict scrutiny. The IRS and state agencies use multiple factor tests to determine whether workers are truly independent contractors or should be classified as employees. Misclassification results in back taxes, penalties, and potential lawsuits. Many states, particularly California, have made contractor classification much more difficult under laws like AB5.
Ongoing Compliance Management
Compliance isn't one-time—it's an ongoing obligation that requires systems and processes. Annual reports, tax filings, license renewals, and updated registrations must happen on schedule or you risk penalties, late fees, and potential business suspension. Calendar management for compliance deadlines prevents missed filings that create unnecessary problems.
Regulatory changes happen constantly at federal, state, and local levels. Staying informed about changes affecting your industry protects you from inadvertent non-compliance when new rules take effect. Industry associations, legal counsel, and regulatory monitoring services help you stay current.
Documentation and record-keeping requirements vary by industry and regulation but are universally important. Maintain organized records of compliance certificates, test reports, registrations, licenses, and correspondence with regulatory agencies. When questions arise, proper documentation demonstrates your compliance efforts.
Professional guidance from attorneys, accountants, and compliance specialists saves money compared to fixing violations after they occur. Initial consultations help you understand your requirements, while ongoing relationships ensure you stay compliant as your business grows and regulations evolve.
