Publication date: 30.05.2025
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Legal Support for Opening a Ukrainian Company's Branch in the U.S.: Case Study in New Jersey
Entering the U.S. market is a strategic move for Ukrainian companies aiming for international expansion. However, launching a branch in the United States requires a carefully planned legal and tax strategy. In 2024, a Ukrainian agricultural equipment manufacturer turned to attorney Miraziz Khidoyatov to establish a subsidiary in New Jersey. The company already had a stable business in Ukraine and active contracts with American partners.
The primary objective was to create a legal model that ensured compliance with U.S. law, tax regulations, and a formal connection between the Ukrainian head office and the U.S. branch. New Jersey was chosen for its logistical advantages and favorable regulatory climate.
Case Overview
The client's goal was to establish a branch in the form of an LLC wholly owned by a Ukrainian legal entity. This structure enabled:
- Legitimate operations within the U.S.,
- Direct contracting with clients,
- Receiving payments via a U.S. bank account,
- Providing on-site service and equipment support.
It was crucial to minimize the risks of double taxation and avoid the branch being classified as a permanent establishment.
Key Implementation Steps
1. Corporate Structure Development
A legal audit of the Ukrainian company was conducted, including ownership structure, tax status, and internal controls. Based on the results, the team decided to register an LLC in New Jersey, fully owned by the Ukrainian parent company.
This form provided flexibility, retained full control, and allowed for tax efficiency.
2. Registration and Operations Setup
- The LLC was registered in the state of New Jersey.
- An Operating Agreement was prepared and signed.
- Form SS-4 was filed to obtain an EIN from the IRS.
- A corporate bank account was opened in the U.S.
- An agreement was signed with a local CPA for bookkeeping and tax compliance.
3. Legal Connection with the Head Office
To comply with international tax law:
- An intercompany agreement for supply and services was signed.
- Form W-8BEN-E was submitted to confirm non-resident status.
- A transfer pricing and profit distribution mechanism was developed.
Case Results
- The U.S. subsidiary was successfully registered.
- Bank account opened and EIN received without the owners being physically present in the U.S.
- Legal ties with the Ukrainian head office were formally documented.
- The branch began operating and signed its first local contracts.
- The structure avoided permanent establishment status, optimizing tax liabilities.
Proof of SS-4 completion stage
Frequently Asked Questions
Can a U.S. branch be opened without visiting the country?
Yes. All steps, including registration, bank account opening, and tax filings, can be done remotely.
What’s the difference between an LLC and a C-Corp for a branch?
An LLC is easier to manage and avoids double taxation, especially if it has a single owner. A C-Corp is more suitable for attracting investment.
Do I have to pay taxes in both countries?
No. With the correct structure and application of the Double Taxation Treaty, tax obligations can be optimized and fairly distributed.
This case highlights the importance of legal planning in international expansion. With the support of attorney Miraziz Khidoyatov, the Ukrainian company successfully launched a full-fledged subsidiary in the U.S., minimized legal and tax risks, and laid a solid foundation for further growth in the American market.
