U.S. Subsidiary Registration Guide Complete Steps for Chinese Companies Expanding Internationally

How to Register a Branch in the United States A Comprehensive Guide for Chinese Companies Expanding into International Markets

In recent years, with the deepening of globalization and the evolving Sino-US economic and trade relations, an increasing number of Chinese companies have turned their attention to overseas markets-particularly the United States, the world's largest economy. According to data released by China’s Ministry of Commerce in 2025, Chinese outbound direct investment continues to grow, with US investments mainly concentrated in manufacturing, technology RD, advanced manufacturing, and new energy sectors.

For Chinese companies seeking international expansion, registering a branch or subsidiary in the U.S. is a crucial step toward localizing operations. However, due to differences between China and the U.S. in legal systems, tax structures, and business culture, many companies face numerous challenges during implementation.

This article outlines key steps and considerations for establishing a U.S. presence from perspectives including registration procedures, legal structure, tax planning, and compliance requirements-offering a practical guide for Chinese enterprises going global.

1. Choosing the Right Legal Structure Subsidiary vs. Branch Office

When setting up a U.S. entity, companies must first decide whether to establish a subsidiary or a branch office.

A branch office is legally part of the parent company and does not constitute a separate legal entity. The parent company assumes all liabilities. This option has lower setup costs and suits companies testing the market initially, but carries higher risk exposure.

A subsidiary, typically structured as a Limited Liability Company LLC or Corporation Inc., is a separate legal entity. The parent company’s liability is limited to its investment amount, making this structure more suitable for long-term, stable operations.

Given the Committee on Foreign Investment in the United States CFIUS has intensified scrutiny over foreign investments-especially in high-tech and infrastructure sectors-it is advisable for companies entering sensitive industries to consider forming a subsidiary to mitigate potential policy risks.

2. Selecting the Registration Jurisdiction State and City Considerations

The U.S. operates under a federal system, meaning regulations, tax policies, and business environments vary significantly across states. Common choices include Delaware, New York, and California.

Delaware is often preferred by foreign investors due to its business-friendly laws, mature judicial system, and relatively low corporate tax rate.

California, while offering access to innovation hubs and tech talent, comes with higher taxes and stricter regulatory oversight.

For finance, trade, or other specialized industries, cities like New York and Chicago may be ideal depending on target markets, supply chain logistics, and talent availability.

Careful evaluation of these factors is essential when choosing a jurisdiction.

3. Step-by-Step Registration Process

1. Choose and Verify a Company Name

Conduct a name availability search on the relevant state government website and perform a trademark check through the U.S. Patent and Trademark Office USPTO.

2. File Organizational Documents

Submit Articles of Incorporation or Certificate of Formation to the Secretary of State of the chosen state, specifying the business type, registered address, and director information.

3. Apply for an Employer Identification Number EIN

Issued by the Internal Revenue Service IRS, this number functions similarly to a Chinese tax ID and is required for opening a bank account and filing taxes.

4. Open a U.S. Bank Account

Some banks allow remote account opening for overseas clients, often with assistance from lawyers or professional service providers.

5. Handle Visa and Staff Relocation Procedures

If relocating executives or technical staff to the U.S., the L-1 intra-company transferee visa is applicable for managers or specialists transferring between parent and subsidiary companies.

4. Key Tax and Compliance Considerations

U.S. taxation is complex, requiring strategic planning

Federal and State Taxes Corporate income tax includes a flat federal rate of 21%, plus average state rates ranging from 3% to 9%.

Permanent Establishment PE If a branch is deemed a PE, it becomes subject to tax on U.S.-sourced profits.

Transfer Pricing and Related-Party Reporting Transactions between related entities must align with OECD standards to avoid tax avoidance accusations.

Additionally, companies must comply with the Foreign Corrupt Practices Act FCPA, Export Administration Regulations EAR, and data privacy laws to ensure full legal compliance.

5. Utilizing Professional Service Providers

Due to the complexity of the U.S. legal environment, it is strongly recommended that companies engage local accounting firms, law firms, and incorporation agents. These professionals can assist not only with registration but also offer support in tax planning, human resources, and intellectual property protection.

Global consulting firms such as KPMG and PwC have dedicated China practices providing customized services tailored to Chinese enterprises expanding into the U.S.

6. Case Study A Zhejiang Manufacturer’s Success in the U.S.

A Zhejiang-based manufacturing company decided to set up a subsidiary in South Carolina in 2025 to better serve North American clients and circumvent tariff barriers. Its successful strategy included

Choosing a subsidiary structure to limit liability;

Engaging third-party experts for registration and tax filings;

Leveraging local industrial park incentives for tax relief;

Sending technical personnel to the U.S. via L-1 visas.

Within less than a year, the company achieved a 60% year-over-year increase in U.S. sales, successfully penetrating the North American market.

Conclusion

As the global economic landscape continues to evolve, Chinese enterprises are increasingly compelled to expand internationally. The United States remains one of the most attractive destinations for foreign investment. With thoughtful structuring, effective tax planning, strict compliance adherence, and the support of experienced professionals, Chinese companies can firmly establish themselves in the U.S. market and achieve sustainable growth.