Why are American companies expanding into global markets?
According to the U.S. Small Business Administration, over 97% of exporters in the U.S. are small and medium-sized companies. More than 300,000 American firms already have foreign clients, and this number continues to grow each year. The primary drivers are access to new markets, investment opportunities, reduced tax burdens, and protection of intellectual assets. For instance, after the 2017 tax reform (TCJA) in the U.S., thousands of American businesses began registering companies in the UK, Estonia, Lithuania, and Cyprus to optimize their international structure.
The most popular destinations for opening subsidiaries or holding companies include Estonia (over 25,000 companies with foreign owners through e-Residency), Cyprus, Malta, Lithuania, and, in the gambling industry, Curaçao and Malta. According to the Estonian e-Residency service, in 2023 alone, over 20% of new residents were from the U.S.
Choosing a jurisdiction: numbers and trends
American IT companies typically choose Estonia or Cyprus due to their e-government services, ease of business registration (registering a company in Estonia takes 1–3 days online), and transparent tax models (Cyprus has a corporate tax rate of 12.5%, while Estonia only taxes profits when dividends are distributed). Fintech companies usually register in Lithuania, which ranks second in the EU for the number of financial licenses issued to startups (according to the Bank of Lithuania).
In 2024, the EU, UK, Singapore, UAE, and Mexico became the top 5 jurisdictions for new foreign companies opened by U.S. citizens. The reasons include a clear business environment, tax incentives, and simplified licensing procedures. For example, in London, over 10,000 new business structures with American capital were registered in 2023.
Registering a company abroad no longer seems complicated: in most countries, it takes between 2 and 10 days (Estonia, Lithuania, Cyprus, UAE). However, the main challenges arise at the stage of opening accounts and ongoing operations. For instance, in 2023, EU banks rejected more than 40% of applications from offshore companies, citing insufficient proof of substance or ownership structure transparency.
Compliance requirements and KYC/AML rules have tightened—banks now check not only the beneficiaries but also the presence of actual employees, websites, and contracts. A company operating “on paper” may lose its account or fail to obtain a license to operate in the EU or the UK.
That is why most American entrepreneurs turn to specialized consultants. Companies like Legarithm not only assist with registration but also help open accounts, build corporate structures, and prepare for audits or license applications.
Real cases: how it happens
From 2022 to 2024, the number of American fintech companies in Lithuania grew by more than 30%. The average time to obtain a payment license here is 3–4 months, and most services are integrated with European banks online. A California IT startup, after registering a company in Estonia, gained over 70% of its new clients from the EU market within a year, gaining access to PayPal, Stripe, and European venture funds.
In the gambling sector, American operators, after registering their business in Curaçao, were able to legally operate with clients from over 40 countries, with licensing costs lower than in Europe or the U.S.
Intellectual property, substance, and legal risks
According to EUIPO statistics, in 2023, around 22% of trademarks registered by American companies in the EU were challenged due to a lack of real presence or conflicts with local brands. The majority of cases were resolved in favor of local companies. Therefore, protecting intellectual property in new markets begins with trademark registration and preparing legal agreements that comply with the requirements of each specific country.
