By Anastasia Bektimirova (Researcher, The Entrepreneurs Network).

Executive summary

Britain and America share a Special Relationship that has evolved from its military origins in the Second World War to encompass deep economic ties today. This partnership is evident in the robust UK-US business corridor, with America being the UK’s largest trading partner, accounting for 17.7% of total British trade. 

The US market presents significant opportunities for British companies due to its sheer size and economic strength. US GDP is 8.2 times that of Britain’s, and its GDP per capita is 1.7 times larger. The US also offers a more conducive environment for startups, with a thriving VC ecosystem that deployed $89 billion in 2024, nearly ten times the amount in the UK. For many British founders, America does an ample job living up to its moniker as the land of opportunity.  

But expanding into the US market comes with challenges that are often underestimated for four key reasons:

• Geographical complexities: The US market’s vast size comes with regional differences that require careful consideration when setting up operations stateside.

• Business culture differences: Navigating the US employment landscape, including healthcare, holiday allowances, and HR laws, presents a steep learning curve for UK companies. Key roles also have different expectations in the US compared to the UK.

• Costs and bureaucracy: Setting up operations in the US involves devoting significant time and resources, as complex processes with multiple institutions need to be navigated.

• Limited guidance and support: Companies struggle to find reliable, up-to-date, and cost-effective resources for understanding the US expansion process. Finding trustworthy and effective legal and tax services can be difficult and costly. While well-developed peer networks exist for VC-backed startups, other businesses often lack similar support structures.

Despite these challenges, the importance of the UK-US Special Relationship remains clear. Strengthening this partnership could yield significant benefits for both economies. This report investigates how to achieve a stronger economic partnership between Britain and America, drawing on insights from founders, VCs, lawyers, and business development experts to identify obstacles and propose policy recommendations for the British Government to pursue for overcoming them.

FOREWORD

The Special Relationship between Britain and the United States is one of the most enduring and important alliances the world has ever known. While we may differ on the occasional spelling or how the game of ‘football’ is played, our otherwise common language and shared culture have always meant there is fertile ground for cooperation, not least in terms of economic interdependence.

Trade across the Atlantic sustains all manner of companies. Immigration ensures we pool our talent – with profound and positive consequences for innovation. When ambitious entrepreneurs on either side of the pond are looking to expand, Britain is often the first place to do so for American founders, and likewise America for British ones. 

But like any ambitious entrepreneur, we should not be content to settle for the status quo. Indeed, we should always be striving for an ever more special Special Relationship. With the recent election of new government administrations in both countries, the time could not be more opportune to actively look for ways to deepen the partnership that exists between us. 

In this timely report, The Entrepreneurs Network sets out a constructive blueprint for doing just that. Their detailed research – underpinned by extensive and illuminating conversations with precisely the sorts of people who are at the coalface of doing business across the Atlantic – carefully documents where current challenges exist, and future possibilities lie. The policy recommendations they conclude with would boost growth rates, further innovation and deepen the economic ties between our countries. Improving our performance on all of these metrics would make us wealthier and more secure. 

We in Britain enjoy an enormously privileged position, and many other nations can only dream of the bond we have with the US. That should not be taken for granted. As both of our countries turn the page and start a new chapter in their histories, we must be unstinting in our endeavours to work together closely to maximise the lucrative opportunities on offer. I commend the ideas this report makes, and urge our own government to consider them seriously. 

Steve Rigby is the Co-CEO of Rigby Group

Introduction

For over four centuries, a relationship between what is now the United Kingdom and what is now the United States of America has existed. That relationship has not always been cordial – most evidently, between 1776 and 1783, when the War of Independence raged, which resulted in the newly founded United States breaking away from the British Empire. But for the last several decades, a closer, more Special Relationship has been forged. 

Initially, the term Special Relationship – coined at the height of the Second World War by Winston Churchill, himself the offspring of Anglo-American parents – applied only in a militaristic sense. In the intervening decades, however, it has come to embody a much broader meaning – with economic ties being an integral dimension.

The bustling UK-US business corridor is built on deep-rooted connections that span corporate offices, government departments, university campuses, innovation hubs and broader social networks. These connections have often translated into boardroom alliances and transatlantic ventures. Their scale shows up clearly in the data. America is the UK’s single largest trading partner, accounting for 17.7% of total UK trade, and British exports to the US amounted to £192 billion in the four quarters to the end of Q1 2024 – an increase of 3.2%, or £6 billion, compared to the four quarters to the end of Q1 2023. In 2023, over 40,000 British businesses sold goods to the US.

Figures 1 and 2: Both the value and proportion of British exports going to the US has increased over the last decade.

In 2022, the inward FDI position held by American companies in Britain was £702 billion, more than the entirety of those from the EU – which stood at £597 billion.

Figure 3: Net foreign direct investment in the UK by US companies has increased sharply in recent years.

When considering international expansion, the US is the top destination (35%) for British companies, followed by Australia (21%), Canada (21%), Germany (20%), UAE (16%), France (15%) and China (12%).

Figure 4: British businesses recognise the US as the standout markets of opportunity.

Many iconic British companies have found success and growth in the US. Carmakers Jaguar and Land Rover entered the US market in the 1950s and 1987 respectively. In 2023, Jaguar Land Rover’s US sales made up 21.5% of its global total, more than the 17.4% that were made in the UK. Chip design giant ARM completed a joint listing on NASDAQ and the London Stock Exchange in 1998. This move has paid off, allowing it to gain significant traction in the US semiconductor industry, leading to partnerships with major technology companies and eventually becoming a dominant player, with its chips in nearly 90% of the world’s smartphones and millions of other electronic devices. Dyson expanded into the US market in 2002 and has since diversified its product range, establishing itself as a premium household technology brand.

From Silicon Valley in California to Silicon Fen in Cambridge, the exchange of talent and capital has created a virtuous cycle of growth and innovation. Developments, such as Imperial College London’s upcoming California campus, and the UK AI Safety Institute’s new stateside office, are set to further cement these connections in the science and technology sectors, which are critical today and for tomorrow. In every release of our annual Job Creators report, we have found that America is the single largest source of immigrant founders behind Britain's fastest-growing companies. 

The importance of the Special Relationship is thus abundantly clear. But just because it’s thriving, that doesn’t mean more couldn’t be done to forge an even stronger partnership between the economies of Britain and America. Indeed, with the new Labour Government still fresh from its decisive election victory in July, and the incoming Trump Administration ready to return to the White House, the time to reset and reinforce the Special Relationship could not be more opportune.

In this paper, we investigate how that could be achieved. In addition to desk research, this paper draws on semi-structured interviews with founders of companies across different sectors and growth stages who are either expanding into the US or have recently done so, along with VCs, lawyers, and professional service experts supporting these expansion efforts. Their unique insights enable us to pinpoint exactly what the obstacles to forging a more special Special Relationship are, and our policy recommendations propose how to go about breaking those obstacles down.

Land of opportunity

For many British and European companies, entering the US market represents the holy grail of business success. As well as the obvious potential financial payoffs, there is a kudos to ‘making it’ in the US. As one industry group representative puts it, British founders tend to see America as “the golden country.”

If they can gain a foothold in America, the sheer size, strength and resilience of the US economy offers significant potential for growth. The scale of opportunity speaks for itself: US GDP is 8.2 times that of Britain’s, and GDP per capita is 1.7 times larger than it is in the UK. And this gulf has been widening over time, from near parity in the 1980s to the notable disparity in the 2020s. America’s economy grew 3.2% in the year to Q3 2023, in contrast to the 0.1% boasted by the Eurozone, and the negative 0.3% in the UK. These data reflect the vast consumer market and economic power available to businesses to tap by expanding stateside.

Figures 5 and 6: America’s total and per capita GDP figures dwarfs Britain’s, and the gap is only growing larger.

The US economy is also particularly conducive to taking a startup off the ground and scaling it fast. It is the birthplace of modern venture capital (VC), with about 2,361 venture firms in 2023, compared to 199 in Europe. In 2024 at the time of writing, $89 billion of venture funds have been deployed, nearly ten times the amount in the UK. The UK might rank third globally for VC investment but, once measured per capita, it punches below its weight, lagging relatively smaller ecosystems, such as Singapore, UAE, Switzerland and Sweden. 

Figures 7, 8 and 9: America dominates total VC investment, per capita VC investment, and VC investment hotspots.

Aside from well-known major VC funds, there are many smaller ones as well as angel investors that are generally less risk-averse than their European counterparts. Often former founders themselves, these groups are willing to lend their expertise and time to support their portfolio companies. There is less – in the words of one founder – “dicking around, they get straight to yes or no and if it’s a yes they really back you.” Party rounds are also more common in the US, facilitated by the use of Simple Agreement for Future Equity notes, and the network of smaller VCs and angels. Even though competition for each dollar is fierce, these features of the US fundraising scene give companies an opportunity to grow by an order of magnitude.

Put simply, it is no surprise that British entrepreneurs look across the Atlantic with envy. For those who are able to expand into America, sizeable rewards await. 

Bring it on home

An opportunity to scale and shape the future of British businesses in the US comes with a natural concern for politicians and policymakers in Westminster: domestic entrepreneurs, flush with foreign cash and facing a market five times larger, might be tempted to list stateside, relocate their headquarters, and eventually shift operations there. In the 1990s, many sector-redefining companies were lured to the US and listed on NASDAQ, leaving some to conclude that the UK missed out on streams of revenue, as well as clout and standing on the international stage. 

Yet, we believe in a more nuanced story, and a more positive one at that. First, for all of the UK’s advantages, it would be wrong to assume that a British company or founder which found success by moving to America would necessarily have done so had they stayed at home. Second, their success often leaves a positive mark on their country of origin. It has an inspirational effect – a homegrown company making it big ignites the entrepreneurial spirit and raises ambition in countless others. It is a proof of concept, demonstrating that local innovation and productivity can scale globally. Moreover, a successful company doesn’t just shine a spotlight on itself, it illuminates the entire local ecosystem. This can encourage global investors to cast their nets wider in the same waters, potentially triggering a virtuous cycle of investment and growth. Finally, entrepreneurs rarely sever ties with their home nations entirely. More likely is that they maintain deep connections with their roots, often reinvesting their expertise and capital back as mentors or angel investors.

This dynamic is far from theoretical. We know this because the UK often serves as a place where foreign-born founders find their success, and in turn raise the profile of their homelands. Take the example of Wise, founded by Estonian duo Taavet Hinrikus and Kristo Käärmann but which grew and went public in the UK, making the pair Estonia’s first tech billionaires. The success of Estonian-founded startups has helped establish the country’s reputation as the ‘unicorn nation’, boasting the highest number of unicorns per capita in the world. Another pattern is the homecoming of European tech talent from global giants like Palantir and Meta to companies such as Helsing in Germany, after scaling and succeeding abroad, signalling a virtuous cycle of talent returning to accelerate European ambition and contribute to its sovereignty.

This scenario is not a zero-sum game. When British companies find success in the US, it doesn’t necessarily mean a loss for the UK economy. Instead, it can create a positive feedback loop that benefits both nations – and indeed everywhere that gains from economic growth and innovation. 

It’s not just the economy

As discussed earlier, the Special Relationship began very much as a military alliance. Economics may have taken the limelight since, but in recent years, national security objectives have returned to prominence. UK-US cooperation and joint leadership are as essential today as they have ever been – both internationally and for the security of people at home. We are in an era of heightened geoeconomic competition – the practice of countries leveraging their economic strength to achieve geopolitical and economic goals. Leadership and dominance in specific strategic niches in supply and value chains can be leveraged to achieve national objectives – unlocking long-term prosperity, gaining a military edge, and wielding greater influence on the international stage.

Amid the intensifying geopolitical tensions, international trade has grown in importance for businesses. The primary concern is a potential armed conflict between China and Taiwan which could cost the global economy between $600 billion and $1 trillion annually due to the disruptions in semiconductor production. From 2018 to 2021 strategic imports from China to the West fell from 33.5% of the total to 31.9%. 

This is causing many nations and companies to spend vast sums to de-risk their economic interests. Nearly half (47%) of British businesses say that international trade is of increasing importance to them – more than double the number that did in the autumn of 2021. Over a quarter (28%) are considering international expansion in the next three years – the highest level in the last two years. 

In this period of fracturing trade links, it is increasingly important to ensure friendly countries are able to maximise their economic relationships – operating with as little friction as possible to smooth out any bumps in the road.  

Figure 10: More and more British businesses agree that international trade is becoming increasingly important.

Delaware or the highway

There is a common route to the US that many companies take. It begins with exploratory trading with US customers. If that pilot stage is successful, and the US revenue starts to flow into their UK business, companies set up a US subsidiary. Evidence shows that UK firms buying US businesses, or creating new subsidiaries, rose by 45% over the first half of 2024, compared with the same period in 2023. Its business-friendly environment has made Delaware the preferred state of incorporation – despite having a population of a little over one million, it drew 68% of the Fortune 500, 65% of the S&P 500, and 79% of all US IPOs in 2022. US income is then routed through the US subsidiary to facilitate transactions with US clients. Initially, this may be a ‘nameplate’ scenario without physical assets. The final phase is setting up physical presence stateside, which may include acquiring assets, hiring local employees and establishing a US board of directors.

Many businesses already operate in the US to varying degrees before incorporation. But there is an understanding that without demonstrating a commitment to having a physical presence stateside, companies face limitations on scaling or even maintaining existing operations. It is also a trustworthiness signal to current and potential clients. An executive who spearheaded the US expansion of a consultancy firm notes that even though their business had been increasing its US presence for 18 months before incorporation, it was a crucial step for building and deepening relationships with existing US-headquartered companies. They describe incorporation as “showing that we have boots on the ground.”

For businesses targeting the government as a customer, this is an essential step that has no workarounds. According to an executive at a company whose learning and development products are used by civil servants and policymakers globally, nearly 60% of their revenue already came from US-based private foundations before they established a local office. But without a formal presence stateside, it can be very challenging to sell directly to the government. “If you want to discuss learning and development budgets with NASA or engage at the state level,” they say, “you need a physical presence.”

Headwinds and hurdles  

Entering the US market, with its scale and promise of opportunities, nonetheless brings challenges that are often underappreciated – a point echoed by everyone interviewed for this research, whether from the expanding companies or seasoned professionals supporting their efforts. 

As one startup founder says: “The US is like a mythical creature. There’s the idea of what it is, and then there’s the reality, and they’re not the same. We all think it’s got very little regulation, low costs, and buckets of cash flowing around. We imagine this gung-ho, cowboy-type atmosphere where everything is easy. But the reality is quite different. It’s actually extremely bureaucratic.” 

Geography lessons

Incorporating in Delaware does not mean that a business has to have a physical presence in the state. Companies are instead faced with a choice of 50 unique states for setting up their operations. “Starting in New York may seem logical, but finding regional opportunities and understanding competitive landscapes is essential,” says one CEO. 

These decisions will be based on industry concentrations, access to talent, transportation and logistics, state-specific incentives and regulations. The business and legal environment may vary significantly by state. According to an executive at a company building out a US presence for several years, “each state is like a different country with its own laws.” This affects geographically concentrated sectors, such as the automotive industry in the Midwest, as much as more dispersed ones, like medical devices spanning the East Coast, Texas and West Coast. 

Regional differences, and how they affect selling strategies, is a feature that is not always clear enough or understandable to a European business mindset. Often, British companies underestimate the sheer size and geographical diversity of the US market and misunderstand its regional nature. As the head of US expansion at one law firm puts it, “the American market does not bend to the will of the British founder.”

It can be challenging for one local team to cover large regions of the US, which span multiple time zones, require logistical coordination as well as local expertise and networks to navigate state-by-state differences. For a strong presence stateside, we heard how companies should make hires in each state where they plan to operate. As one founder told us, “selling in the Midwest is different from selling in the South. Many may think that one sales representative can cover the entire country, but it simply doesn't work that way.”

Hiring decisions

It is difficult enough to navigate the process of hiring one person, let alone several across multiple states. “Hiring US employees presents a steep learning curve for UK companies,” says an executive who led their company’s transatlantic hop. The Employer of Record, a model where a third-party organisation takes on the legal and administrative responsibilities of employing workers on behalf of another company, “is a temporary solution,” they told us. Key differences include healthcare, holiday allowances, and HR laws, all of which require thorough research to understand expectations and how to be competitive in the US market. 

Business culture around some key roles in a company also differs. In the US, top salespeople often earn more than the CEO, which reflects a different approach to business hierarchy and incentives. That is because, as one VC explains, “they are selling and generating revenue.” They tend to have higher expectations, including lead generation, structured support and guaranteed earnings, compared to their UK counterparts. Another difference is in the role of the CFO. In the UK, a key role of the CFO is to control costs. In the US, if you ask startups what the CFO does, they will say “maximise enterprise value.” 

Bureaucratic barriers

Businesses spend significant time and resources on various processes with multiple institutions, which are often cumbersome or repetitive. As a founder and CEO of an agritech company told us: “if you want to encourage innovative companies to expand into foreign markets, you’ve got to create the possibility in the first place. Not everyone can do that, and when it comes to the US, that’s big money.” 

Take insurance. Throughout the expansion process, insurance costs tend to increase significantly. UK-based businesses can initially obtain global insurance coverage, but if they seek insurance that includes the US, costs can double simply because they anticipate generating revenue from US operations. The litigious nature of the US market adds risk, resulting in higher premiums. After incorporating in the US, businesses need to secure insurance that covers the US board of directors. This can be arranged from the UK, but requires adjustments to insurance policies. When a business acquires assets in the US and hires local staff, it needs to obtain insurance from a US provider. At this point, UK brokers need to collaborate with partner brokers in the US to provide the necessary coverage, effectively resulting in two different insurance brokers for one company. This creates challenges: there is inconsistency around terminology between the UK and US, and one side lacks the visibility into discussions between their client and the other side.

Nor is it easier on the immigration front. Hurdles, costs and lack of clarity on visa regulations can delay or deter expansion plans. The most common concerns for executives leading the US expansion are, first, the difficulties in transferring employees who are not in leadership roles and second, the lack of a dedicated visa option for executives looking to explore business opportunities in the US without committing to establishing operations immediately.

Box 1: On transferring employees who are not in leadership roles:

“When starting a team in a new location, having company knowledge there is crucial. We wanted to send an experienced employee who, while not part of the leadership team, possesses deep expertise in our finance systems. Unfortunately, we have been unable to transfer this solid employee to the new team over the past two years. We’ve tried working with two different visa support companies to facilitate this process, but to no avail.”

“Ideally, we wanted to transfer an employee on the L-1 visa, but they might not meet the required skill level. As an alternative, we are considering the E-1 route, which is beneficial for UK businesses. But we need to maintain at least 50% UK-based shareholding; currently, we’re at 50.3%. One new investor could push us below that threshold. Additionally, if we miscategorise any investors, we could also fall short. There is a bit of ambiguity in the process. It would be simpler if you are domiciled in the UK or a person of significant control based here, you should qualify for the visa.”

Box 2: On the exploratory phase:

“During a two-month fact-finding mission in the US on the L-1A (intercompany transfer) visa, I encountered ambiguous rules allowing business activities but prohibiting work. This creates a grey area. While it’s acceptable to hold business meetings, negotiate contracts, and engage in discussions, I found myself in a situation where I was picking up work for UK clients while in the States. Although I wasn’t technically ‘working’, it felt like both were happening simultaneously. My visa would have allowed me to stay longer, but both my company and I didn’t feel comfortable exploring for longer because it was very grey.”

The costs related to services, consultancies, and legal matters, including immigration, are cited as the most underappreciated pitfall in the expansion process.

Box 3. On the costs of expansion:

“The process is somewhat like a production line, with approximately 50 steps that need to be taken sequentially, each with its own nuances. As a small company, we just don’t have the capacity to think about these sorts of things at the moment, so we had to hire a consultant to handle it for us. We ended up paying around $30,000 to a consultant, plus additional legal fees and other related costs.”

Box 4. On bureaucratic pains:

“We are engaged in two US Government-backed schemes. First is the Business and Industry Loan Guarantee Scheme, which provides up to 80% loan guarantees for projects in rural, slightly deprived areas. It’s a fantastic scheme, but an extreme bureaucratic pain. We’re a year into it, and we’re still going through it. It’s an incredibly long and painful process. Second is New Market Tax Credits, aimed at attracting investment to highly deprived regions by allowing investors to offset their tax bills. They are great schemes, but where it gets very difficult is the service provision associated with them. We had many surprises on timelines and costs. Things like permitting and legal fees are just massive amounts of money all the time.”

For SMEs in particular, access to export finance presents a challenge. Banks often see SMEs as higher risk and less profitable clients, leading to reduced services and limited product offerings. The regulatory environment adds an extra layer of complexity. Enhanced due diligence requirements for companies trading overseas increase costs for banks. While alternative lenders are available, they often charge higher rates, which can erode SMEs’ profit margins. In addition, the lack of standardisation in Know Your Customer processes across financial institutions creates a repetitive and time-consuming onboarding burden for SMEs seeking finance from multiple sources. These challenges make it difficult for SMEs to access the necessary finance for export activities, potentially discouraging them from pursuing international trade opportunities.

research for development

Although British companies may have the maturity and technical know-how to be objectively competitive in the US market, many bring a knife to a gunfight. They arrive underprepared, underestimating the realities of the expansion process – a point echoed by everyone interviewed for this research. This can lead to a retrenchment when they start facing challenges.

A natural solution is that companies need to do their homework better. As one lawyer who assists businesses with US market entry puts it, “there is a lack of interest among UK and European founders in doing the research to understand what US expansion looks like.” But companies may argue that it’s not for lack of effort, but rather a shortage of practically useful and accessible information, along with gatekeepers blocking the way.

Inform and conquer

Learning from mistakes is valuable, but comes with a price tag. Given the high costs of business expansion, providing companies with information to help avoid mistakes is a low-hanging fruit to reduce expenses. 

Stories abound of where a lawyer advised a company to take a certain approach, and after they had spent tens of thousands of pounds, only for it to turn out that it wasn’t the most appropriate option. Mistakes like that end up costing businesses even more.

Box 5. On the importance of good advice:

“Many foreign companies struggle to find reliable, cost-effective professional services, such as tax and legal, in the US. It’s crucial to get professional help early on, as mistakes in these areas can become costly later. Companies often rely on word of mouth or search for service providers, but quality and costs vary greatly.”

“Lawyers often operate using boilerplate templates and may not take the time to understand your business. Unless you have a foundational level of knowledge about your own needs, you risk being guided by a lawyer who doesn’t fully grasp your business model or specific requirements.”

But just relying on desk research is not a safe bet. As one interviewee told us: “In my research for online resources, I found several slide decks outlining available business routes, but many were outdated, as old as 2018. It’s a challenge to find current and relevant information for navigating available routes and legal requirements.”

Standing on the shoulders of peers

Leaning on existing networks can be essential for firms exploring foreign expansion. Their experience will steer decision-making so that the expansion process happens quicker, cheaper, and with more confidence.

The differences in the legal and business environments are so fundamental that one lawyer referred to it as “the American way.” In order to succeed in the US, they said, companies need to embrace a mindset of, “reject everything I’ve learned to date, and [be] willing to accept everything American as being the only way.” In many cases, no amount of information can educate as much as learning quickly from one’s own mistakes or drawing on the knowledge of peers who had already made a transatlantic hop.

While strong networks exist for some companies, others are missing out. As one executive at a consultancy business says, “in the VC and startup space, there’s a well-developed ecosystem, but if you are a standard business not backed by private equity or VC money, such an ecosystem doesn’t exist to the same extent.” The outcome is that “the companies that don’t fit into those existing structures are left out of this picture entirely and have to navigate things on their own.”

Policy recommendations

With a relatively new government in Britain, and an entirely new one about to come to power in the US, we have a unique moment in which to reassess and strengthen our Special Relationship. Both administrations should recognise that it is in our mutual interest to deepen our economic ties, and leave no stone unturned with respect to working out what can be done to achieve that.

The most valuable role the Government can play is twofold. First, it can act as a convener, collaborating with relevant US-based bodies, such as US International Trade Administration, US regulators, US Citizenship and Immigration Services, and Department of State, to ensure British companies have simple access to accurate information for expanding and relevant support on the ground stateside. Second, through policy changes to make pursuing opportunities in the US with as little friction as possible when it comes to bureaucracy and costs.

Below, we set out seven policy recommendations for the British Government that would better enable British businesses to expand to the US and reap the rewards of doing so. 

Recommendation 1. Strike a free trade agreement between the UK and the US, with smaller sector-specific agreements as stepping stones, facilitated by a new UK-US Entrepreneurs Council. 

In early 2020, the UK and the US began the negotiations for a free trade agreement. Both countries published their negotiating objectives, and several virtual roundtables were held. However, when the Biden Administration came to power, further talks stalled. Following Donald Trump’s election victory in November, we recommend the British Government revives discussions on a free trade agreement as soon as possible with the new administration.  

Should a full free trade agreement prove a step too far for now, a series of targeted sector- or state-specific agreements could still prove beneficial to firms either side of the Atlantic which are interested in increasing trading between our two countries. Deals such as these could serve to be stepping stones towards a more comprehensive free trade agreement in the future. 

Sector-specific deals could focus on areas where both countries have strong high-growth sectors, such as:

• Digital trade – the agreement could include provisions on data flows and prohibit data localisation requirements

• Advanced manufacturing – it could reduce tariffs on specific high-tech goods and harmonise standards and certifications

• Financial services – which could benefit from mutual recognition of regulations and enhanced market access

• Intellectual property – with protections strengthened, alongside improved enforcement mechanisms 

As a way of coordinating the smaller sectoral deals, a deeper cooperation structure should be pursued. This will allow both countries to address emerging challenges and opportunities not covered by standard tariff-focused trade agreement models. Modelled after the EU-US Trade and Technology Council, we propose to establish a UK-US Entrepreneurs Council to fill the existing gaps in the transatlantic SME dialogue. This Council would serve as a forum for discussing and implementing our proposed sector-specific agreements, as well as the other recommendations in this report. 

Recommendation 2. Negotiate with the US a reciprocal ‘Explorer Visa’.

Time and again during our research, we heard from founders how current visa routes don’t adequately support the exploratory phase of business expansion. Existing options simply have too many limitations or ambiguities regarding what activities are permitted. For instance, the L-1 (intercompany transfer) visa route fits for setting up operations, but it could be more exploratory in nature, allowing individuals to come to the US for a fixed period to explore their options.

To address these issues, a new exploratory business visa or a modification to existing visas could be recommended. This visa should be offered as a reciprocal arrangement with the US to allow American entrepreneurs a similar exploratory period in the UK.

The key features of this solution could include:

• A 1-year visa specifically designed for business exploration and setup or introduced as a new subcategory of the L-1 visa route

• Permitted activities:

• Exploratory business activities, including market research, attending business meetings, negotiating contracts, and initial setup operations

• Permission to perform limited work related to business setup and exploration

• Ability to work remotely for UK-based clients or companies while in the US

• Clearly defined purpose to allow for eligibility criteria:

• Proof of intent to explore business opportunities in the US

• Evidence of financial backing or self-sufficiency

• Demonstration of ties to the UK to ensure return

• Option to extend or transition to other visa types if deciding to establish a more permanent presence after the exploratory period

Recommendation 3. Create an International Business Digital Passport

Another significant hurdle founders looking to expand to the US market face are the various regulatory barriers. To streamline this process, the Government should create an International Business Digital Passport system to simplify compliance processes, reduce costs, and accelerate market access for UK companies. 

The features of the proposed International Business Digital Passport could include: 

• A standardised Know Your Customer process that satisfies regulatory requirements in both the UK and US

• A secure digital credential that serves as proof of a company’s verified status

• Cross-border recognition between UK and US financial institutions and regulatory bodies

• Annual renewal to ensure information remains current and compliant

• Advanced fraud detection algorithms to maintain the integrity of the system

Potential benefits of the system:

• UK businesses would save significant time and resources by avoiding repetitive processes with multiple financial institutions

• The digital passport would serve as a pre-vetted credential, speeding up account opening and business registration processes in the US

• Passport-holding companies would be viewed as low-risk, reputable entities by US partners and regulators

• Banks would be more willing to onboard UK businesses with a digital passport, potentially increasing access to credit and other financial products

On a technical level, this could be partially modelled on the EU Digital Product Passport (DPP). Starting from 2024, DPPs are expected to be adopted by the EU and mandated between 2026 and 2030. While focused on product traceability rather than business credentials, it takes a similar approach to digital standardisation across borders. Our proposal takes this concept further by focusing specifically on business credentials and financial compliance, which could address core challenges faced by companies expanding internationally.

Recommendation 4. Pilot an accelerator programme modelled on German Accelerator.

German Accelerator is a programme supported by the German government to help German startups expand internationally, particularly to the US. It consists of different phases and offers various support services, such as connecting companies to market bases and funding in the US, mentorship programmes with US-based professionals, organising trade missions, and facilitating networking with successful Germans in the US. The programme is open to startups and scaleups across different sectors, and it is known for its centralised structure, easy accessibility, and effectiveness in helping companies assess and improve their readiness for US expansion.

A close British equivalent is the Global Incubator Programme offered by Innovate UK. While valuable, it primarily targets innovative technology and science-intensive SMEs, often through calls for participants in specific sectoral niches. This excludes many other sectors of the UK economy. Similarly, private sector efforts, such as Entrepreneur First, while supporting companies to raise funding rounds in the US, are focused more on building VC-backable companies. 

We recommend the British Government invests up to £1.15 million to pilot a programme modelled on the German Accelerator [1]. Making the Department for Business and Trade responsible for its delivery would allow the programme to have a wider sectoral focus. The pilot should run for two years initially, after which its impact should be reviewed by a group of independent experts from the business and investing community in the UK and the US. The pilot should focus on the US, and, if successful, could have more markets added to its purview over time.

Recommendation 5. Develop a UK-US market entry intelligence platform.

To facilitate successful expansion of British companies into the US market, the British Government should put in place a comprehensive digital platform that provides tailored market entry intelligence and state-industry matching capabilities. This can be done in collaboration with the US International Trade Administration to leverage existing data sources like their Market Diversification Tool. Key features of the platform could include:

• State-Industry matching to inform UK companies of optimal US states based on industry, business model, and growth objectives

• Provide an intuitive map interface highlighting industry clusters, tax environments, and economic incentives across US states

• Regulatory and tax comparison tool to enable side-by-side comparisons of state-specific regulations, tax structures, and business incentives

• Offer insights into regional supply chains, consumer markets, and distribution networks

• Provide data on local workforce skills, education levels, and labour costs

• Create compliance checklists for legal, regulatory, and operational requirements based on company profile and target state

Recommendation 6. Hold regular office hours at UK consulates across the US.

The UK’s network of consulates offers a readymade forum of on the ground experience. For British companies attempting or just exploring the US expansion, they could serve as an invaluable resource to ask questions, get connected to the necessary services or resources, and express their concerns. It would also enable the consulates to have a clearer understanding of challenges businesses face, and can feed that back to the Government accordingly. As such, we propose that each consulate should hold regular in-person and virtual office hours for founders looking to expand into the US to drop in and seek advice.

Recommendation 7. Work with the US regulators to slash insurance complexities for companies expanding to the US.

One of the most significant costs of US expansion that founders told us about during our research were those relating to insurance. We believe a quick win could be achieved by regulators from both the UK and US working together to slash complexities on this front. Key reforms could include:

• Negotiating insurance agreements with major US insurers to secure preferential rates and terms for UK businesses expanding to the US. This could help mitigate the significant cost increases associated with US coverage

• Regulatory harmonisation to align insurance terminology and requirements between the two countries

Conclusion

The longstanding Special Relationship between the UK and the US has been a cornerstone of both nations’ foreign and economic policies for decades. Yet as we have explored in this paper, there is ample room to further strengthen and deepen it.

The US market is a land of opportunity for Britain’s most ambitious businesses. With its larger economy, higher population, thriving VC ecosystem and ingrained culture of innovation, it is a natural target for British companies looking to scale globally. But the path to success in the US is not without its challenges. Often underappreciating the long and winding road ahead, British firms need to navigate complex regulatory environments, regional differences, and cultural nuances to establish a foothold in a competitive market stateside.

Despite these hurdles, the rewards of successful transatlantic expansion are huge. Stronger economic ties between the UK and US can boost innovation, create jobs, and drive economic growth on both sides of the Atlantic. In an era of increasing geoeconomic competition, the deepening of this relationship also takes on strategic importance, allowing both nations to leverage their combined economic strength to achieve shared goals and security.

With America soon to be under a new administration, and the British Government still relatively early on in its tenure, now is the perfect moment to forge a relationship between the two nations even more special than the one they currently have.

[1] The indicative cost is estimated based on Innovate UK expenditure. The breakdown of the Global Incubator Programme (GIP) funding provides the costs of its country- and sectorspecific activities. The cost of two out of five years of Canada-focused GIP delivery effort can be taken as a proxy for the funds needed to deliver the proposed two-year US-focused pilot: (£1,695,824 / 5) x 2 = £678,330.

In addition to country-specific activities, GIP relies on general business support services. Innovate UK expenditure data suggests that GIP receives this through three six-year long contracts of £1.1-1.6 million each. Given a narrower geographical scope of the proposed pilot and a shorter time period, the indicative cost can be calculated as: (£1,372,745 / 6) x 2 = £457,581 (where £1,372,745 is an average cost of one six-year contract).

Therefore, the total indicative cost of a two-year pilot is around £678,330 + £457,581 = £1,135,911.

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