How do go about starting a small business in the US and UK (and Europe)?

December 4, 2023 6:12 AM

I have developed a small product line that I would like to sell to gift shops in New England, the UK, and Europe. I am a citizen of both the US and the UK, and I live in the UK. The items will be made (and sold) in the UK and exported to the US and Europe.

I think I need to register as a business in the UK to do this, and operate my business from here, is that right? I'm wondering if there is an option of starting a separate business in the US for the items I plan to import and sell there? I want my US customers to be able to pay me in dollars to a US account, is that possible?

posted by stinker to Work & Money (7 answers total)

In the UK you need to set up a company which (from personal experience) is pretty easy to do: https://www.gov.uk/set-up-limited-company

And if you want to export, start here: https://www.gov.uk/export-goods

You should definitely get an accountant to help you deal with your tax affairs, especially if you're selling overseas.
posted by underclocked at 7:26 AM on December 4, 2023

Best answer: I do this.

Yes, you need to create your own company in the UK, but also one in the US (where you'll also need an accountant, and a fulfilment partner) and one in every european country where you plan on keeping physical stock. You'll also need a vat registration is that european country, and an accountant to handle that too.

I DON'T recommend Shipbob as a fulfilment partner (they are easy to set up in the UK, US and europe since they have warehouses everywhere, but boy oh boy, it's been a world of pain).

In the beginning, unless you have huge volumes, it will be vastly cheaper to fulfil all your orders from the UK, even if you eat part of the cost of international shipping. Once you factor in all the labour and costs involved and opening companies, compliance and admin, taxes etc... It's something you can probably easily calculate, but i'd be surprised it's cheaper unless you're selling thousands of units.

You do have to think about custom duties for your eu customers though, they'll be reticent to buy from you unless you can offer an "all-in" price, duties included. Thanks Brexit.
posted by PardonMyFrench at 7:38 AM on December 4, 2023 [1 favorite]

As a US citizen living abroad, you should consult with a highly qualified expert in US expat taxation before starting a business; if you don't do things correctly from the very beginning, you can end up with serious potential fines from the IRS for not reporting the overseas (UK-based) part of your business to them properly (no, they don't care that it's set up where you live, everything outside the US is "foreign" to them, US expat taxation is incredibly cruel and stupid).
posted by nanny's striped stocking at 7:54 AM on December 4, 2023

Response by poster: Thanks PardonMyFrench. I'm at the very beginning and starting small. Does that mean I should do everything as a UK-based business at first, and set up a US company later? I plan to visit US stores I'd like to be able to take orders on the spot, can I do that as a UK business?
posted by stinker at 8:34 AM on December 4, 2023

It's possible you may not need to set up a limited company, depending on your anticipated income and therefore liability for VAT. I work as sole trader rather than a company, as I don't reach the £75k threshold for VAT. So I would take some advice about that (or read books, which was my strategy) rather than assuming it's the way to go.
posted by paduasoy at 9:22 AM on December 4, 2023

But having a limited company has other benefits aside from whether you "need" to. Limited personal liability and tax advantages for two. Given what little we know, sounds like the OP be best having a company.
posted by fabius at 5:08 AM on December 5, 2023

Best answer: Yes of course, you can absolutely sell to US companies as a UK business.

Whether they'll want to do business with you as a small business in a foreign country is something else. If you've got 0 leads, you can also start selling through B2B platforms like Faire, Ankorstore, Creoate and the like. Stores are very likely to have heard of them and trust the name of the platform, so it might be worth it to get you started despite their commission.

And trade shows are still the best way to get lots of new wholesale customers. The best one in Europe is Maison&Objet in Paris and in the US, probably Shoppe Object or NY Now (not sure what your product is but both these shows have a variety of brands and attract serious international buyers).
posted by PardonMyFrench at 9:40 AM on December 6, 2023