Culture Shock: Why Expanding to the U.S. Feels Like Entering 50 Different Countries
The U.S. is one nation, but for international businesses, it behaves more like a continent with a number of jurisdictions within it. Here's why expansion feels fragmented, and how to plan around it.
The Illusion of a Unified U.S. Market
For many businesses in Australia, New Zealand, the UK, or Europe in general, expanding to the U.S. is framed as a single strategic move: enter the American market. But once you're inside, it becomes clear: the U.S. isn’t one market—it’s dozens.
Yes, the dollar is the same. Yes, there's one federal government. But when it comes to business operations, taxes, hiring, compliance, and even customer behavior, each U.S. state behaves more like its own sovereign nation.
This is one of the most common—and costly—surprises for international businesses. What seems like a promising launch in California can quickly unravel if you try to apply the same strategy in Texas or New York. And what felt like cultural fluency can break down in places like Utah or Florida.
So, let’s unpack the real culture shock behind U.S. expansion—and how to navigate it with your business intact.
1. Regulations Vary Wildly by State. And They Actually Matter
Many businesses are surprised to learn just how decentralized U.S. regulation is. While the federal government sets the overarching tax framework, each state (and sometimes even each city) sets its own rules for:
Corporate income tax
Sales tax (with different rates, rules, and thresholds)
Employment law (including PTO, classification, and termination)
Privacy and data security laws
Franchise or gross receipts taxes
For example:
In California, you’ll face some of the most complex and employee-friendly labor laws in the country—plus a minimum $800/year franchise tax, no matter your revenue.
In Texas, there’s no personal income tax, but businesses may owe a gross receipts tax that confuses many first-time filers.
In New York, the bureaucracy alone can be a cost center, with layered city and state compliance requirements.
These aren’t minor technicalities—they directly affect your cost structure, risk exposure, and operational decisions.
What this means for you:
You can’t afford a one-size-fits-all strategy. Expanding to the U.S. means picking the right state—not just the most famous one.
2. Sales Tax Is a Trap for the Unprepared
Here’s a shocker: there is no national sales tax in the U.S. Instead, you face a dizzying patchwork of state and local tax regimes—with over 11,000 different jurisdictions.
If you're a SaaS company based in Berlin or Auckland, you’re probably used to VAT or GST being charged once and remitted centrally. In the U.S., you might owe sales tax in multiple states, each with different rules about:
Whether your product is taxable at all (some states don’t tax digital goods, others do)
What rate applies (could be 4%, 7%, 10%…)
Whether you’ve triggered economic nexus (based on revenue or transaction count)
Real client example:
One of our clients—a UK-based tech platform—launched U.S. operations assuming sales tax was irrelevant for their digital service. Within 6 months, they had nexus in 8 states and didn’t even know it. Cleanup was painful and costly.
What this means for you:
Sales tax isn’t optional. It’s a strategic consideration from day one—especially if you operate remotely or sell online. Don’t wait to discover it on audit.
3. Hiring in the U.S. Requires Cultural and Legal Translation
The U.S. hiring landscape is full of nuance. What’s considered “standard” in London or Sydney might be non-compliant or uncompetitive in San Francisco—or vice versa.
Key differences:
At-will employment is the norm in most states (employers or employees can end relationships with little notice).
Benefits expectations vary by region and industry. A tech employee in Boston may expect health insurance, 401(k), and equity from day one. A sales rep in Georgia may prioritize cash comp and PTO.
Worker classification is strictly enforced—misclassifying someone as an independent contractor instead of an employee can create material risk to the company.
Then there's culture. U.S. team members often value:
Frequent feedback and recognition
Transparency into company growth and vision
Work-life flexibility—but expect responsiveness
What this means for you:
Hiring your first U.S. employee isn’t just a legal step—it’s a cultural bridge. You need localized contracts, competitive offers, and clear expectations.
4. Your Expansion Strategy Has to Be State-Specific
This is the biggest shift: in the U.S., your expansion plan needs to treat each state like a distinct market.
That means asking:
Where are your customers located?
Where are your team members based?
Which states are most favorable for your entity structure?
Where do tax and compliance costs align with your growth goals?
For example, a New Zealand company selling into the West Coast may choose to incorporate in Delaware (for corporate governance or funding reasons), register to do business in California (because of clients), and hire their first employee in Arizona (for labor cost savings).
Each state adds cost and complexity—but also opportunity.
What this means for you:
A map of the U.S. isn’t just geography—it’s a decision tree. Choose your nodes wisely.
Plan Like an Entrepreneur, Expand Like a Local
The U.S. can be a phenomenal growth market. But it's also filled with traps for businesses who assume it's homogenous, predictable, or simple.
Our job is to help international businesses navigate every stage of U.S. expansion—from entity formation and tax planning to hiring, compliance, and operational setup. We’ve seen what happens when businesses plan ahead—and when they don’t.
So here’s the truth, each state has something to offer and a wealth of growth opportunities. Let’s make sure you land with eyes wide open and in the best place for you and your company.