8 Key Points You Must Know About Registering a Branch Office in the U.S.

Eight Key Considerations for Establishing a Branch Office in the United States

In recent years, with the acceleration of globalization and the deepening of Sino-US economic and trade relations, an increasing number of Chinese companies have chosen to establish branch offices in the United States to expand into international markets, enhance brand visibility, or gain access to advanced technologies and resources. According to data released by the U.S. Bureau of Economic Analysis BEA in 2025, as of the end of 2025, China’s stock of direct investment in the U.S. had exceeded $120 billion, spanning sectors such as technology, manufacturing, logistics, and finance.

Although the U.S. market is highly open, its legal system is complex and regulatory oversight is strict, making the process of registering a branch office far from simple. This article outlines eight key considerations to help you better understand what to expect when establishing a branch office in the United States.

1. Clarify Company Type and Legal Structure

When registering a branch office in the U.S., the first consideration should be the legal structure of the entity. Common options include Limited Liability Company LLC, Corporation, and Branch Office. These structures differ significantly in terms of taxation, liability, and management.

For example, LLCs are widely popular in the U.S. due to their provision of limited liability protection and flexible tax treatment. In contrast, while branch offices are relatively easier to establish, the parent company remains fully liable for the branch’s debts and obligations. Companies should choose a structure based on their business characteristics and risk tolerance.

2. Choose the Right State for Registration

The U.S. operates under a federal system, where each state has its own legislative and taxation policies. The choice of registration state can significantly affect operational costs and compliance obligations.

Delaware, for instance, is a popular registration destination due to its mature corporate law system and business-friendly regulations. Nevada is known for having no corporate income tax and offering shareholder information confidentiality. According to a 2025 survey by U.S. business registration service providers, over 40% of multinational companies chose Delaware as their first choice for U.S. incorporation.

When selecting a state, companies should consider the local legal environment, tax rates, registration procedures, and future business strategy.

3. Registration Process and Document Preparation

Establishing a U.S. branch office typically involves several steps selecting and registering a company name, filing incorporation documents such as Articles of Incorporation or Articles of Organization, appointing a Registered Agent, and applying for a Federal Tax Identification Number EIN.

While the exact procedures may vary slightly by state, the general framework is consistent. For example, in California, registering an LLC requires filing Articles of Organization and paying a $100 registration fee, along with an annual minimum tax of $800. It is advisable to consult with a legal professional or registration service before proceeding to ensure full compliance.

4. Tax Planning and Compliance Reporting

The U.S. tax system is complex, requiring companies to comply with both federal and state tax obligations. The Internal Revenue Service IRS requires all registered businesses to file tax returns on time and pay applicable taxes based on their legal structure.

For example, an LLC can choose to be taxed as a partnership or a corporation, while a branch office is generally taxed under the parent company’s home country regulations. In recent years, the U.S. has tightened oversight on cross-border taxation. The Inflation Reduction Act, passed in 2025, has further increased tax scrutiny on large corporations.

Before establishing a branch, companies should develop a sound tax planning strategy to avoid heavy fines or compliance risks due to unfamiliarity with U.S. tax rules.

5. Employment and Labor Law Compliance

U.S. labor laws are strict, and companies must comply with federal and state regulations when hiring employees, including minimum wage standards, overtime pay, employee benefits, and anti-discrimination laws.

For example, as of 2025, California has raised the minimum hourly wage to $15.50 and requires employers to provide paid sick leave and family leave. Employers are also responsible for paying Social Security and Medicare taxes.

To avoid labor disputes, it is recommended that companies establish comprehensive employment contracts and consult with professional HR advisors before hiring.

6. Intellectual Property Protection

For technology and brand-focused companies, protecting intellectual property is especially important when setting up a branch in the U.S. The U.S. has a robust legal framework for patents, trademarks, and copyrights. Companies should complete trademark registrations and patent applications before commencing operations to prevent brand infringement or unauthorized use.

According to data from the U.S. Patent and Trademark Office USPTO for the first quarter of 2025, Chinese companies increased their trademark applications in the U.S. by 12% year-on-year, reflecting a growing awareness of intellectual property protection among Chinese firms.

7. Bank Accounts and Fund Management

A U.S. branch typically needs a local bank account to manage daily financial transactions. Opening a corporate bank account usually requires documents such as the company's registration certificate, EIN, and identification of the authorized signatory.

Bank requirements may vary, but it is advisable to choose banks with international experience, such as Citibank or JPMorgan Chase. Companies should also ensure compliance with cross-border fund transfer regulations to avoid violating sanctions imposed by the U.S. Treasury’s Office of Foreign Assets Control OFAC.

8. Ongoing Compliance and Annual Reporting Obligations

After registration, U.S. companies must fulfill ongoing compliance requirements, such as submitting annual reports, paying annual fees, and updating company information. For example, New York requires all registered companies to file a Biennial Statement every four years, while Delaware requires an annual franchise tax payment.

Failure to meet these obligations may result in the revocation of the business license or financial penalties. Companies should establish robust internal compliance mechanisms or engage professional firms to assist with annual reporting and tax filings.

Conclusion

As one of the world’s largest economies, the U.S. offers vast opportunities for business growth. However, its complex legal and tax systems demand a high level of preparedness from foreign investors. When establishing a branch office, companies must thoroughly understand relevant regulations, carefully choose the state and legal structure, and ensure compliance in areas such as taxation, labor, and intellectual property.

Only with comprehensive preparation can companies successfully implement their global expansion strategies and sustainably grow their overseas operations.