Almost anyone involved in a growing business knows just how exciting the growth phase can be. They also know the challenges that come with growth. Those challenges can be magnified when you decide to expand your business almost anywhere in the world.

The US market is often considered a measuring stick for how well a company will do in other international markets. One of the reasons is that the United States is notoriously difficult to succeed in.

What’s the biggest challenge in expanding a business to the US? You might be surprised by the #1 hurdle businesses face.

Learning to Play by the Rules

The biggest challenge facing any business as they expand to the US is compliance.

Compliance has been a rising concern for business leaders across the board for some time now. The financial industry was subject to more regulation after the 2008 recession. Many businesses are facing challenges with compliance as governments tighten up rules about cybersecurity and data management.

Just take a look at the CCPA in California, which changes the game for any company in the US storing data. Your operations don’t even need to be located in the Golden State to be affected.

Why Is Compliance So Difficult?

Compliance is the biggest hurdle, but why does it present such a challenge to businesses expanding into the US?

A quick look at the case of the tax code illustrates the issue. There are thousands of pages of federal regulations you have to comb through. Not all of them will apply to your business, but if you’re not familiar with the code, it will take some time to figure out which rules you must follow and which ones you can safely ignore.

On top of that, there aren’t just federal rules. You’ll also need to look at state tax regulations and comply with those. Some of them may build on or even conflict with federal regulations. Finally, there might also be city or local taxes you’ll have to pay.

It’s this tangled situation, with three different levels of government independently making rules, that causes so many headaches for businesses entering the United States.

This situation isn’t limited to taxes either. It applies to every aspect of your operations in the United States: from how you hire to employees to payroll, from business structure to insurance policies.

Entering the US doesn’t mean learning just one set of rules. Instead, you’ll need to learn three sets. That’s three times as much reading, three times as much paperwork, and three times as many opportunities for mistakes.

How to Improve US Compliance

Noncompliance is concerning for any business in the United States because it comes with the risk of penalties. You may be assessed penalties for payroll noncompliance. Employee misclassification and now data storage and security also come with penalties and fines.

Worse, you could face a lawsuit. This is particularly the case with employment legislation. An employee might decide to take you to court over any number of violations. Even failing to issue a paystub in some states can cost you between $50 and $4,000 per stub per employee.

Obviously, learning the regulations is one way to improve compliance. Be sure to review your policies on a regular basis, especially as laws change. Best practice is always evolving too.

Monitoring your compliance is also important, since it helps you stay on top of your compliance obligations. You may want to sign up for certification programs, which can help you meet or exceed minimum compliance requirements.

Work with the Experts

One of the easiest ways to improve your compliance is to partner with an expert team. Payroll and HR specialists can guide you through the maze of employment legislation in the US. With their assistance, staying compliant is easier than ever.