Doing business with the United States of America
- Marco van Hagen
- The basis
- 16 Sept 2020
- Edited 10 Aug 2023
- 8 min
- Managing and growing
- International
America’s legendary entrepreneurial spirit captures the imagination. The US is often seen as a land of unlimited possibilities. Are you looking to cross the Atlantic and do business in the US? This is what you need to know to get off to a good start.
The current situation
Opportunities via government support
The US government is currently investing $65 billion in building roads, bridges and rail tracks. The US is also putting money into expanding access to clean drinking water. This investment package is called the Bipartisan Infrastructure Deal.
Furthermore, the US is investing $340 billion to boost sustainability. For example, for generating clean energy and making electric cars. This stimulus package is called the Inflation Reduction Act.
Contact if you want to know what opportunities are available for your business.
Exports to the US
If you want to export goods to the US, the step-by-step export plan is a good place to start. Here are some other factors to take into consideration.
Laws and regulations on products
There are no general product liability laws in the US. Instead, each US state has its own rules based on federal legislation and case law. In addition to technical specifications, make sure that your labels, manuals, and translations are in order. If you want to export goods to the US, make sure that your product meets all product (in Dutch). Product requirements are set out in standards and certificates.
- Standards contain specific, often technical product requirements, such as for the composition of oil.
- Certificates often contain broader product requirements, such as the requirements that a lawn mower must meet to be considered safe.
You can find a list of all product requirements in . There are various (in Dutch) in the US and the Netherlands that issue the certificates you need to export goods to the US.
Liability insurance
Insurance companies are often cautious when it comes to selling liability insurance to businesses, with many insurers refusing to offer liability insurance products. This is because there are no general product liability rules in the US. And because lawsuits in the US are brought before a jury, which can lead to surprising verdicts. Finally, the high damages awarded by the court are another reason why insurers are often hesitant to offer product liability insurance in the US. Keep this in mind when exporting to the US.
Customs procedures
When exporting goods, submit an export to Dutch Customs, before clearing them in the USA. American customs differ from those in the Netherlands, so it is best to make clear arrangements with your customer about shipping and customs clearance. You arrange this by agreeing together on an Incoterm®. This way, both of you will know who is responsible for arranging transportation, who is responsible for the shipping costs, and who bears the risk of damage to, or loss of, the goods in transit.
Documents
When it comes to exporting goods, there are some documents you will always need, such as a sales invoice and transport document. In some cases, you will also need additional documents or certificates to import goods into the US. For more information about US import rules, visit the website of the Netherlands Enterprise (in Dutch).
Quotations
Your quotation should clearly state your price and what currency you expect to be paid in. As well as your delivery terms, preferred payment method, and the validity period of your quotation. You also have to agree on who will arrange and pay for transportation.
Trust
The foundation of any good business relationship is trust. Most countries have a commercial register. Although this will tell you whether a company is legally registered, it says nothing about its reliability. You can find company information in the US via the secretaries of Or contact the local embassy (in Dutch) of the Dutch government. You can mitigate risks by asking your customer to pay in advance, either partially or in full, or opt for another form of .
Subsidies
Under the Support International Business (in Dutch), the Netherlands Enterprise Agency will reimburse part of the costs incurred for exporting to a new country. Consider taking part in trade missions or fairs or bringing in a coach.
Imports from the US
Want to import products from the US? Make sure to put your plans on paper first by following the step-by-step plan for imports. What else should you look out for?
European laws and regulations
You can only import products that comply with European product requirements, quality marks, and .
Product liability
All products must be safe and usable before they can be placed on the market. That is why importers bear full product according to EU legislation. This protects consumers from damage or injury caused by defective products.
Customs
You are importing a product from outside the European Union, so you will have to pay import duties or other . Import duty rates are linked to the commodity code of the product you are importing, as well as the country of origin. For many consignments, you will also need additional documents and certificates.
Cultural differences
At first glance, the cultures of Western Europe and America seem very similar. Almost everyone speaks English, and Americans, like the Dutch, are direct and casual. Consequently, entering the US market may seem easier than it actually is. There are perhaps 2 important differences. In the US, results count. And modesty will not get you very far. Moreover, Spanish is a major language in some states, such as Arizona.
Company culture
Business culture in the USA tends to be individualistic and focused on the short term. People tend to take the adage ‘time is money’ rather literally, so make sure to get to the point as quickly as possible. ‘Made in Holland’ is less likely to work in the USA, where American-made products are often preferred. So you will have to prove that you’re the best business for the job in your pitch. American people tend to prefer a casual, light-hearted business style. They will often address you by your first name in a meeting.
Agreements
Physical meetings are very common when doing business in the US. If you cannot meet in person, look for a secure digital solution like video conferencing. Arrive on time and honour your commitments, because punctuality is a must. Force majeure is an unacceptable excuse. It is not uncommon for agreements to be fleshed out during a work breakfast or lunch instead of during a meeting.
Verbal agreements are not always binding, so make sure to sign a contract on paper. These contracts are drawn up by specialised lawyers, so bring in a legal expert who can help you draft or check the small print in an agreement. In the US, even the tiniest detail is put in writing, so make sure that you have plenty of time to pour over the contract.
Tips
Here are 6 cultural facts for you to use during the negotiations.
- US English and UK English are not the same: while a bank account is known as a ‘current account’ in the UK, Americans call it a ‘checking account’. After the meeting, recap everything that was said to make sure you understand everything and to prevent misunderstandings.
- Have your website translated into good US English and make the language icon an American flag instead of the UK flag.
- Make sure that you are talking to the right person. Most American companies, especially large corporates, do not have a flat organisational structure. Senior employees will often make the decisions without consulting the rest of the team.
- Americans love giving compliments. If you say ‘thank you’ or ‘please’ a lot, you will likely make a good impression. Many Dutch business owners give too few compliments.
- Formal attire is necessary when dealing with a US business partner. Take this to heart, because you only make a first impression once.
- Americans tend to deal with conflict situations in a down-to-earth, businesslike way: if you don’t like something, you can take it or leave it.
Finding partners
Outside the European Union (EU), the US is the Netherlands’ main trading partner. With its 50 states, each of which is a market in itself, it is a large country with lots of potential customers and partners. Where are your customers? And how do you connect with them? Every US region is home to specific sectors. For more insight, you could read sector reports from the Internationaal Ondernemen (in Dutch) and study RVO’s business (in Dutch).
Own branch or intermediary
Americans prefer dealing with a direct point of contact in their own country. You could consider establishing your own US branch or partnering up with a distributor or commercial agent who will help you get started in your new foreign market. RVO also has a dedicated page on starting a business in the (in Dutch). You will find it easier to do business in the US if you have an American representative. Consider striking up a conversation with network (in Dutch) in the regions you have in mind. And don’t forget to put all agreements in writing.
Enterprise Europe Network
The Enterprise Europe Network (EEN) provides access to a professional network of 600 organisations in more than 60 countries. EEN’s digital contains profiles of entrepreneurs looking for agents, distributors, or production partners.
Attending events
Attending a local trade fair is an easy way to gain insight into the US market, meet new people, and build a network. You can find a list of American trade fairs on websites such as and the AUMA Trade Fair Database. Participating in a trade mission, submitting a joint exhibition entry, or partnering up with multiple companies at a trade fair will also help you expand your network.
Embassy network
The Netherlands has an embassy and several in Washington D.C. Their employees are very familiar with the US market and have a network. They can provide you with local support and answer any questions you may have about business in the US.
Services
The US economy runs mainly on services. Although the importance of the services sector is decreasing slightly, there are still plenty of opportunities to be had in business and financial services, as well as medical technology, solutions for climate problems, and data security.
VAT
If you provide services in the US, research whether your services are subject to Dutch or US VAT. VAT rules in the USA are different than in Europe. Rather than VAT, the US has a federal sales tax, which sellers impose on consumers and companies.
Some states also have a use tax, which shifts the responsibility for paying taxes to buyers purchasing products or services. Out-of-state supplies are subject to use tax.
Sales tax rules and rates differ from one state to the . Bring in a tax specialist for expert advice on sales tax as well as other rules on registration documents, environmental requirements, and more, as these may also differ between states. You can use the Overseas (in Dutch) tool to find out whether to charge Dutch VAT or US sales tax.
Forms
If you provide services to US customers, you will have to provide them with a completed W-8BEN form under the American Foreign Account Tax Compliance Act (FATCA).
W-8BEN form
A W-8BEN form is a tax document linked to the 30% withholding tax, which is similar to Dutch income tax. Without this form, your client will have to withhold and remit 30% of the invoice value to the IRS. With the W-8BEN form, your client proves to the US Internal Revenue Service (IRS) that you pay income tax in the Netherlands. There are two different W-8BEN forms:
- W-8BEN; this form is for eenmanszaken (sole proprietorships) (which covers most self-employed contractors)
- W-8BEN-E this form is for other legal entities, such as a vof (general partnership), bv (PLC), or nv (LLC).
Just like with sales tax, there are certain state exceptions and differences when it comes to withholding tax. Send the completed form to your customer, not the IRS, as they are responsible for collecting all the right data. It is best to fill in the form together with your accountant. For guidance, visit the website of Flanders Investment & (in Dutch).
ITIN number
You put the Individual Taxpayer Identification (ITIN) on the W-8BEN form in field 5. The IRS uses this number to register who you are. The ITIN is used for non-US residents.
SSN
The Social Security Number (SSN) is similar to the Dutch citizen service number and is issued to all US residents. You will need an SSN if you physically provide services in the US, and therefore live there.
The ITIN and SSN are both identification numbers used by the IRS.
