Insights for Asian Companies Entering the U.S.

Choosing a first U.S. city is one of the most strategic decisions an Asian brand will make during market entry. The location you choose affects far more than office rent or brand perception. It shapes tax exposure, hiring costs, regulatory complexity, customer access, and long-term scalability.

Many companies default to well-known cities without fully understanding how different U.S. markets serve different business models. There is no universally “best” U.S. entry city. The right choice depends on your industry, goals, operating model, and growth timeline.

Below is a practical comparison of several major U.S. entry cities and what Asian brands should consider when evaluating each.

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New York City: access, credibility, and cost

New York City is often the first city international brands consider. It offers unmatched access to enterprise customers, financial institutions, professional services, and global talent.

For brands in finance, fashion, media, luxury, or professional services, New York provides immediate credibility and proximity to decision makers. It is also a strong choice for regional headquarters and investor-facing operations.

However, New York comes with significant trade-offs:

• High office and labor costs
• Complex state and city tax structures
• Strict employment and compliance requirements
• Intense competition for talent

For early-stage market entry, New York works best when the U.S. presence is focused on sales, partnerships, or brand positioning rather than cost-sensitive operations. Companies planning lean teams or client-facing roles often find value here despite the expense.

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San Francisco Bay Area: innovation and talent density

The San Francisco Bay Area remains a global hub for technology, startups, and innovation. Asian brands in software, AI, semiconductors, and advanced technology often view it as a natural entry point.

Key advantages include:

• Deep technology talent pool
• Strong startup and venture capital ecosystem
• Culture of innovation and early adoption

That said, the Bay Area presents some of the highest operating costs in the U.S. Housing, salaries, and office space are expensive, and regulatory compliance in California is among the strictest in the country.

For brands that rely on cutting-edge talent or partnerships within the tech ecosystem, the Bay Area can be worth the cost. For others, it may be more effective as a secondary presence rather than a first U.S. base.

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Los Angeles: gateway to consumers and Asia

Los Angeles offers a unique combination of consumer access, logistics infrastructure, and cultural ties to Asia. It is a major hub for trade, entertainment, and consumer brands.

Asian brands often choose Los Angeles for:

• Proximity to ports and supply chains
• Strong Asian business communities
• Access to entertainment, lifestyle, and retail markets
• West Coast time zone alignment with Asia

Los Angeles is particularly attractive for food and beverage, consumer goods, media, and lifestyle brands. Costs are high, but generally lower than San Francisco, and the market offers flexibility in where teams can be based within the metro area.

The city’s size and regulatory fragmentation require careful planning, especially around permits and local compliance.

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Seattle: technology with operational balance

Seattle has emerged as a strong alternative to California tech hubs. It offers access to technology talent and major global companies while maintaining a more manageable cost structure.

Advantages include:

• Strong engineering and cloud infrastructure talent
• Lower state tax burden due to no personal income tax
• Proximity to Asia-Pacific trade routes

Seattle works well for technology, logistics, and enterprise-focused brands. While the startup ecosystem is smaller than Silicon Valley, operational efficiency and quality of life can make it attractive for long-term teams.

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Austin: growth, talent, and flexibility

Austin has become one of the fastest-growing U.S. entry cities for international brands. It combines a growing tech ecosystem with lower costs and a business-friendly environment.

Key benefits include:

• Lower operating and labor costs than coastal cities
• Strong talent inflow from larger markets
• Favorable state tax environment
• Flexible regulatory climate

Austin is well-suited for regional headquarters, technology teams, and operational expansion. It may lack the immediate brand recognition of New York or San Francisco, but for many Asian brands, it offers a better balance between cost, talent, and scalability.

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Dallas and Houston: logistics and scale

Texas cities like Dallas and Houston are often overlooked but highly effective for certain business models.

Dallas is a logistics and corporate hub with excellent transportation infrastructure and access to a large labor pool. Houston offers strength in energy, manufacturing, and international trade.

These cities are attractive for brands that need:

• Distribution and warehousing
• Manufacturing or industrial operations
• Lower cost structures
• Central U.S. geographic positioning

For operationally focused entry rather than brand-led entry, Texas cities can provide significant advantages.

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Chicago: central access and enterprise reach

Chicago serves as a major transportation, finance, and enterprise hub in the central U.S. It offers access to a broad customer base and a diverse talent pool.

Benefits include:

• Central time zone coverage
• Strong enterprise and industrial presence
• Lower costs than coastal cities

Chicago works well for brands targeting national distribution or enterprise clients across multiple regions. Weather and legacy infrastructure concerns are considerations, but for many companies, the strategic location outweighs these factors.

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Matching city choice to business strategy

The most successful Asian brands entering the U.S. do not choose cities based on reputation alone. They align location decisions with business strategy.

Key questions to guide the decision include:

• Where are your primary customers located?
• What type of talent do you need first?
• How sensitive is your model to operating costs?
• How complex is your regulatory exposure?
• Will this location support future growth stages?

Some brands benefit from a phased approach, starting with a lean presence in a major market and expanding operations to lower-cost regions later.

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Final perspective

There is no single “right” U.S. entry city for Asian brands. Each major market offers distinct advantages and trade-offs. The wrong choice can inflate costs and slow execution, while the right one can accelerate growth and reduce risk.

U.S. expansion works best when city selection is treated as a strategic decision rather than a default assumption. With clear objectives, realistic cost modeling, and an understanding of regulatory environments, Asian brands can choose locations that support sustainable success.

The U.S. market rewards thoughtful entry. Choosing the right city is one of the most important steps in building a strong and scalable American presence.

For food and beverage brands entering the U.S. market, demand and distribution are often top of mind. Founders focus on product fit, pricing, and partners, assuming regulatory approvals are a manageable checklist item. In reality, licensing and compliance are among the most underestimated and misunderstood aspects of U.S. expansion.

The U.S. food and beverage regulatory landscape is fragmented, multi-layered, and enforced at federal, state, and local levels. Missing or delaying a single approval can halt operations, delay shipments, void contracts, or expose the brand to fines and recalls. Many of these issues arise not from negligence, but from unfamiliarity with how U.S. approvals actually work.

Below are the key licenses and approvals food and beverage brands often underestimate when entering the U.S., and why early planning is critical.

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FDA facility registration is not optional or one-time

Most imported and domestically produced food products fall under the oversight of the U.S. Food and Drug Administration. One of the first requirements is FDA facility registration.

This applies not only to U.S. manufacturing facilities, but also to foreign facilities that manufacture, process, pack, or hold food for U.S. consumption. Many overseas brands assume their local certifications or exporter status is sufficient. It is not.

Commonly overlooked points include:

• Registration must be renewed every two years
• Each facility requires its own registration
• A U.S. agent must be designated for foreign facilities
• Registration does not equal product approval

Failure to register properly can result in shipments being detained or refused at the port of entry. This often happens at the worst possible moment, when inventory is already in transit and customer deadlines are in place.

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Food safety plans and preventive controls

Under the Food Safety Modernization Act, many food and beverage businesses are required to maintain documented food safety plans with preventive controls.

This is not a generic document. It must be tailored to the specific product, process, and facility. Brands often assume that co-packers or manufacturers will handle this entirely. While partners play a role, brand owners are still accountable.

Preventive controls typically cover:

• Hazard analysis
• Process controls
• Sanitation procedures
• Supply chain controls
• Recall plans

During inspections or audits, regulators expect documentation to be current and accessible. Brands that lack proper plans risk warning letters, production shutdowns, or forced recalls.

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State and local health permits vary widely

Beyond federal oversight, state and local health departments impose their own permitting requirements. These vary significantly depending on location and business model.

Examples include:

• Food establishment permits
• Warehouse and storage approvals
• Sampling and tasting permits
• Mobile food or temporary event permits

A common mistake is assuming that approval in one city or state automatically applies elsewhere. In the U.S., it does not. Each jurisdiction sets its own rules, timelines, and inspection standards.

Brands expanding distribution across multiple states often discover too late that local permits are required before products can be stored, sampled, or sold in certain locations.

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Alcohol licensing is especially complex

For beverage brands involving alcohol, licensing complexity increases dramatically.

Alcohol is regulated at three levels:

• Federal approval through the Alcohol and Tobacco Tax and Trade Bureau
• State-level alcohol control boards
• Local city or county authorities

Each layer has its own application process, fees, and timelines. Licenses are often tied to specific activities such as importing, wholesaling, manufacturing, or direct-to-consumer sales.

Key challenges include:

• Long approval timelines that can exceed several months
• Residency or ownership requirements in some states
• Restrictions on shipping across state lines
• Separate label approvals for each product variant

Underestimating alcohol licensing often results in delayed launches, unsold inventory, and frustrated distributors.

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Labeling approvals and claims compliance

U.S. labeling rules are highly specific, and enforcement is strict. Even small errors can trigger enforcement action or require relabeling.

Common labeling issues include:

• Incorrect nutrition facts formatting
• Improper allergen declarations
• Unsupported health or functional claims
• Inaccurate ingredient order or naming

For alcohol and certain beverages, label approvals must be obtained before products can be sold. This includes approvals for brand names, alcohol content statements, and origin disclosures.

What may be acceptable labeling in another country is often non-compliant in the U.S. Brands that do not review labels carefully before production risk costly reprints or blocked shipments.

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Import and customs related approvals

Food and beverage imports face additional scrutiny at U.S. ports of entry. Customs clearance involves more than paperwork.

Key considerations include:

• Prior notice filings for imported food
• Country of origin marking
• Tariff classifications and duties
• Random or targeted inspections

If documentation does not match physical goods or FDA records, shipments may be held for examination. Storage fees and spoilage risks add up quickly.

Many brands rely entirely on freight forwarders without understanding their own compliance responsibilities. This can lead to repeated delays and strained distributor relationships.

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Zoning and use approvals for facilities

When opening a U.S. production facility, warehouse, or tasting location, zoning and land-use approvals are often overlooked.

Local authorities may restrict:

• Food production in certain zones
• Alcohol sales or sampling
• Hours of operation
• On-site retail or events

Signing a lease without confirming permitted use can result in expensive build-outs that never receive approval. Zoning due diligence should happen before any property commitments are made.

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The cost of underestimating approvals

Underestimating licenses and approvals does not just create delays. It creates cascading risk.

Delayed approvals can cause:

• Missed retailer launch windows
• Contractual penalties with distributors
• Inventory spoilage or write-offs
• Loss of investor confidence

In some cases, regulators impose fines or require product recalls, which can permanently damage brand reputation.

The most successful food and beverage brands entering the U.S. treat compliance as part of market strategy, not a back-office task.

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Final perspective

The U.S. offers enormous opportunity for food and beverage brands, but it is one of the most tightly regulated consumer markets in the world. Licenses and approvals are not hurdles to rush through. They are safeguards that require respect and planning.

Brands that underestimate these requirements often learn through costly mistakes. Those that plan early, understand the regulatory landscape, and secure the right approvals before launch gain a significant advantage.

U.S. expansion in food and beverage is not just about great products. It is about disciplined execution in a complex regulatory environment. When licensing and approvals are handled correctly, brands can focus on growth with confidence rather than firefighting compliance issues.

Entering the U.S. market is a major growth milestone for Asian brands, but it is also one of the most legally and financially complex steps a company can take. Beyond sales strategy and market fit, the decisions made around entity formation and tax structure will shape risk exposure, profitability, and long-term flexibility.

Many brands rush this phase, focusing on speed rather than structure. The result is often misaligned entities, unexpected tax liabilities, and costly restructuring later. A thoughtful approach at the beginning can prevent years of operational friction.

This article outlines how Asian brands should think about U.S. entity and tax structure before launching operations.

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Start with business intent, not paperwork

The most common mistake is treating U.S. entity setup as a simple administrative task. In reality, entity and tax structure should flow directly from business intent.

Key questions leadership should clarify first include:

• Is the U.S. operation focused on sales only, or full operations?
• Will revenue be generated inside the U.S. entity or offshore?
• Is the U.S. presence short-term testing or long-term expansion?
• Are U.S. investors or an eventual exit part of the roadmap?

A brand opening a small sales office has very different needs than one planning manufacturing, warehousing, or R&D in the U.S. Without clarity on intent, companies often choose structures that look simple today but become limiting tomorrow.

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Choosing the right U.S. entity structure

Asian brands typically consider three main structures when entering the U.S.: a subsidiary, a branch, or a standalone U.S. company.

A U.S. subsidiary is the most common and usually the safest option. It creates a separate legal entity that limits liability exposure to the parent company. This structure is often preferred by enterprise customers, banks, and investors. It does, however, require proper capitalization, ongoing reporting, and clear intercompany agreements.

A branch office may seem attractive because it appears faster and less expensive. However, branches often expose the foreign parent directly to U.S. tax and legal risk. For most brands, this structure creates more problems than it solves and is rarely ideal for long-term operations.

A standalone U.S. entity with independent ownership can make sense in joint ventures or market-specific partnerships, but it requires careful governance planning to avoid conflicts and control issues.

The right choice depends on risk tolerance, growth plans, and how integrated the U.S. business will be with the parent company.

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Understanding federal and state tax layers

The U.S. tax system is layered and decentralized. Asian brands must plan for both federal and state taxes from the beginning.

At the federal level, corporate income tax applies to profits generated in the U.S. However, the way income is classified and allocated between the parent company and the U.S. entity matters greatly. Transfer pricing, management fees, royalties, and cost sharing all affect taxable income.

At the state level, taxes vary significantly. Some states have corporate income tax, others rely more heavily on sales tax or gross receipts taxes. Nexus rules determine when a company becomes taxable in a state, and these rules can be triggered by employees, inventory, or even sales activity.

A common mistake is forming an entity in one state while operating in another without understanding the resulting tax exposure. State selection should be part of tax planning, not an afterthought.

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Transfer pricing and intercompany agreements matter early

For Asian brands with overseas manufacturing, IP ownership, or centralized services, transfer pricing becomes a critical issue.

The U.S. tax authorities expect intercompany transactions to follow arm’s-length principles. This means pricing goods, services, and IP usage as if the parties were unrelated. Without proper documentation, companies risk audits, penalties, and double taxation.

Intercompany agreements should clearly define:

• How products are sold to the U.S. entity
• Whether the U.S. entity is a distributor, agent, or principal
• How management services are charged
• Who owns intellectual property and how it is licensed

These agreements should be in place before meaningful revenue flows begin. Fixing them later is far more difficult and often triggers regulatory scrutiny.

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Employment and payroll tax considerations

Hiring U.S. employees creates immediate tax and compliance obligations. Payroll taxes, workers’ compensation, benefits requirements, and employment law compliance vary by state and sometimes by city.

Some brands attempt to hire contractors to avoid these obligations, but misclassification is a serious risk in the U.S. Penalties can be severe, and enforcement is increasing.

Before hiring, brands should understand:

• Whether employees will work for the U.S. entity or the parent company
• How payroll taxes will be handled
• What benefits are required or expected in the local market
• How termination rules differ from home-country norms

Employment structure decisions directly affect tax exposure and should align with entity planning.

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Planning for future fundraising or exit

Entity and tax structure should not only support current operations but also future strategic options.

U.S. investors often prefer clean, well-structured U.S. subsidiaries with clear financials and governance. Poor early decisions can complicate due diligence, reduce valuation, or delay deals.

Similarly, exit scenarios such as acquisition or IPO are heavily influenced by structure. Intellectual property location, intercompany debt, and historical tax compliance all affect transaction outcomes.

Asian brands that plan ahead keep flexibility. Those that do not often face painful restructuring just when momentum matters most.

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The value of coordinated local expertise

No single advisor can cover all aspects of U.S. entity and tax planning. Legal, tax, payroll, and strategic considerations overlap, and decisions in one area affect the others.

Successful U.S. market entry usually involves a coordinated advisory approach that aligns structure, compliance, and business goals. This reduces surprises and allows leadership to focus on growth rather than damage control.

For Asian brands, the U.S. is a high-opportunity market, but it rewards preparation. Entity and tax structure are not just compliance requirements. They are strategic foundations.

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Final perspective

Approaching U.S. entity and tax structure thoughtfully is one of the most important steps an Asian brand can take when entering the market. The right setup protects the parent company, supports growth, and preserves strategic flexibility. The wrong setup creates friction that compounds over time.

Brands that treat structure as a strategic decision rather than a formality enter the U.S. with confidence. With proper planning and experienced guidance, U.S. expansion can become a sustainable engine for long-term global growth, not a source of hidden risk.

Expanding into the United States is a major milestone for any growing company. For many Asian businesses, the U.S. represents scale, credibility, and long-term opportunity. At the same time, it is one of the most complex markets in the world to enter. Regulatory layers, tax exposure, hiring rules, and location decisions can quickly turn a promising expansion into an expensive mistake if not planned carefully.

Before signing a lease, registering an entity, or hiring your first U.S. employee, leadership teams should pause and ask a few foundational questions. These questions do not slow growth. They protect it. Answering them early helps ensure that your first U.S. location supports your strategy rather than creating operational and compliance risk.

Below are five critical questions every company should answer before opening a first U.S. location.

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1. What is the strategic purpose of our U.S. presence?

The first and most important question is also the most overlooked. Why are you entering the U.S. market in the first place?

Some companies open a U.S. location to be closer to customers. Others need a U.S. entity to satisfy enterprise clients, investors, or partners. In some cases, the U.S. office is primarily for sales and business development, while manufacturing or fulfillment remains overseas. In others, the U.S. location becomes the company’s global headquarters over time.

Each of these goals leads to very different decisions.

If your primary objective is sales, you may not need a large physical footprint or complex operational setup. A small team, flexible office space, and a streamlined entity structure may be sufficient. If your goal is long-term operational expansion, the decisions around entity type, tax planning, and location become far more consequential.

Without clarity on the purpose of the U.S. presence, companies often overbuild too early. This leads to unnecessary costs, compliance obligations, and management complexity. A clear strategic objective acts as a filter for every other decision you make.

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2. What type of U.S. entity structure fits our business model?

Once the strategic purpose is defined, the next question is how the U.S. operation should be legally structured. The U.S. offers multiple entity options, each with different tax, liability, and governance implications.

Common structures include subsidiaries, branches, and standalone entities such as LLCs or corporations. A subsidiary structure may offer liability protection and clearer separation from the parent company, but it also introduces additional compliance and reporting requirements. A branch may appear simpler but can expose the parent company to U.S. tax and legal risk.

The correct structure depends on several factors:

• How revenue will flow between the U.S. and the parent company
• Whether intellectual property will be held inside or outside the U.S.
• Expected profitability timelines
• Future fundraising or exit plans
• Regulatory exposure in your industry

Many companies make the mistake of choosing an entity structure based solely on speed or cost. While speed matters, restructuring later is often far more expensive than setting it up correctly from the start. Entity decisions should be made with a multi-year horizon, not just the first six months of operation.

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3. Where should our first U.S. location actually be?

Choosing a U.S. city is not just a branding decision. It directly affects taxes, hiring costs, regulatory exposure, and operational efficiency.

Some companies default to well-known markets like New York or San Francisco without evaluating whether those cities align with their business needs. While these markets offer access to talent and investors, they also come with higher costs and stricter regulations.

When evaluating potential locations, companies should consider:

• Proximity to customers or partners
• Availability and cost of relevant talent
• State and local tax environment
• Industry-specific regulations or incentives
• Time zone alignment with headquarters or clients

For example, a technology company focused on enterprise sales may benefit from proximity to major corporate hubs, while a manufacturing or logistics-driven business may prioritize infrastructure, warehousing access, and lower operating costs.

Location decisions are difficult to reverse. A thoughtful evaluation upfront can prevent years of unnecessary expense and friction.

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4. Are we prepared for U.S. compliance and ongoing obligations?

Opening a U.S. location is not a one-time administrative task. It creates ongoing obligations that require consistent attention.

These obligations may include:

• Federal, state, and local tax filings
• Payroll compliance and employment regulations
• Business licenses and permits
• Annual reports and corporate governance requirements
• Industry-specific compliance standards

The U.S. regulatory environment is decentralized. Rules vary significantly by state and sometimes even by city. What is compliant in one location may be insufficient in another.

Many companies underestimate the operational burden of compliance, especially in the first year. Missed filings, misclassified workers, or improper registrations can lead to penalties that distract leadership and erode trust with partners or investors.

Before opening a U.S. location, companies should have a clear plan for who will manage compliance and how it will be monitored over time. This is not an area where improvisation works well.

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5. Do we have the right local support and advisors?

The final question is often the deciding factor between a smooth entry and a painful one. No matter how strong your internal team is, U.S. market entry requires local expertise.

This includes legal counsel, tax advisors, payroll providers, and operational partners who understand the U.S. environment and your industry. It also includes strategic advisors who can help leadership make informed decisions rather than reactive ones.

Relying solely on internal assumptions or informal advice from peers can create blind spots. The U.S. market rewards preparation and penalizes shortcuts.

Having the right support structure in place allows founders and executives to focus on growth instead of troubleshooting preventable issues. It also signals credibility to investors, customers, and partners who expect a professional and compliant U.S. presence.

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Final thoughts

Opening a first U.S. location is not just an expansion. It is a structural shift in how your business operates, complies, and grows. The decisions made before launch often have a greater impact than the actions taken after.

By answering these five questions early, companies gain clarity, reduce risk, and create a foundation for sustainable success in the U.S. market. The goal is not to move fast at any cost, but to move deliberately with confidence.

For Asian companies entering the U.S., the most successful expansions are those treated as long-term strategic investments, not short-term experiments. With the right planning, structure, and support, a first U.S. location can become a powerful engine for global growth.