The United States is still one of the largest recipients of foreign direct investment and remains an attractive location for foreign businesses. A large amount of this investment comes from places like Japan, Canada, Australia, and the European Union.

One of the main reasons attracting investment is that it is home to the world’s largest economy. Excellent infrastructure; legal protection for corporations; a productive and skilled workforce; and lucrative consumer markets across several sectors make it an attractive place to do business.

Having said that, the US is also known for its highly complex tax system. With extensive tax regulations, all businesses that operate in the US will be subject to its tax laws. As a Japanese outbound business or an entity growing your presence in the US, you will need to navigate your way through sometimes vague and confusing tax requirements on a national, state, and local level.

To help you avoid some common pitfalls when it comes to US corporate taxation, we’ve outlined some of the major considerations that all businesses operating in the US should make, whether you’re simply operating a representative office or establishing a fully owned subsidiary of the parent company.