Things To Avoid While Doing Business In The United States

The United States remains one of the most dynamic and profitable markets—but success here requires precise compliance and smart planning. Whether you’re launching a startup or expanding an established brand, knowing what to avoid will help you operate smoothly and sustainably.

1) Neglecting proper business registration & licenses

The U.S. uses a state-based incorporation system, so requirements and fees differ by state. Choose the right structure (LLC, C-Corp, or S-Corp election), file with the relevant state authority, obtain a federal tax ID (EIN), and confirm any state/local licenses before trading.

2) Misunderstanding taxes & ongoing state fees

Taxes exist at federal, state, and local levels—plus some states charge annual franchise/LLC taxes even if you’re not profitable yet. Two common surprises:

• California LLCs owe an $800 annual tax (the temporary first-year waiver ended after 2023). See the state’s current rules on the Franchise Tax Board site.

  Official reference: California FTB – LLC annual tax

• Foreign qualification: if you form in one state but actually operate in another, expect registrations and fees in each “doing business” state.

Set calendar reminders for annual reports, state fees, and estimated taxes from day one.

3) Treating the U.S. as one uniform market

Consumer behavior, privacy rules, and even advertising standards vary by state. Research target states, localize messaging and pricing, and adapt your CX and support hours to U.S. time zones you serve.

4) Picking a state on headlines alone

“No corporate tax” doesn’t mean “no costs.” Some states add other levies (e.g., Nevada Commerce Tax thresholds) or publication/annual-report requirements. Choose where you’ll actually hire, sell, store inventory, or maintain offices—then foreign-qualify elsewhere as needed.

5) Skipping intellectual-property protection

Secure your brand and technology early. File trademarks for names/logos and consider patents for inventions. Search conflicts before launch and use clear NDAs with staff and partners.

6) Weak cash-flow discipline

Overestimating sales or ignoring renewals/fees is a common failure point. Keep a 13-week cash forecast, separate business banking, and reserves to cover state filings, taxes, payroll, and insurance.

7) HR compliance gaps (I-9, wages, classification)

Every employee must complete Form I-9; employers must review documents and complete Section 2 within three business days of the start date. When in doubt on contractor vs. employee, get professional advice (misclassification triggers penalties).

Official reference: USCIS – Form I-9

Also remember: the federal minimum wage is $7.25/hr, but many states require higher—pay the higher applicable rate.

8) Overlooking marketing & privacy rules

For commercial emails, follow CAN-SPAM (truthful headers, physical address, easy unsubscribe). For texts/calls, obtain appropriate consent under telemarketing rules and maintain opt-out logs. If you target Californians, ensure your data handling aligns with CPRA.

9) Not tracking the 2025 shift in BOI (beneficial ownership) rules

Originally, many companies had to report beneficial owners to FinCEN under the Corporate Transparency Act. In March 2025, Treasury/FinCEN issued an interim final rule removing the BOI reporting requirement for U.S. companies and U.S. persons, pending further regulatory review. Always check FinCEN’s page for the current status before submitting or advising on BOI filings.

Official reference: FinCEN announcement (Mar 21, 2025)

How we can help

If you want a compliant, streamlined setup with ongoing governance handled, our specialists manage end-to-end USA company formation, EIN assistance, state filings, HR/ops checklists, and renewal calendars—so you can focus on growth.