Expanding Into the U.S. in 2026: Key Cross-Border Tax Changes Foreign Businesses Need to Know

In July 2025, Congress passed a sweeping tax package commonly referred to as the One Big Beautiful Bill. While the legislation spans hundreds of pages, its impact on international and cross-border taxation is clear. Several rules that were previously temporary, phased, or uncertain are now effectively permanent, and in some cases more aggressive.

At the same time, the IRS has continued to expand its use of data analytics and specialized enforcement teams focused on international structures, transfer pricing, and information reporting. Together, these developments establish a new baseline for U.S. expansion planning.

For foreign businesses, this means assumptions that may have held true in prior years should be re-tested before committing to a U.S. structure in 2026.

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International Tax Rule Changes That Affect U.S. Expansion Decisions

Reworked GILTI Rules and the Rise of NCTI

The former Global Intangible Low-Taxed Income regime has been restructured into what is now commonly referred to as Net CFC Tested Income. While GILTI historically affected primarily U.S.-parented groups, the revised framework increasingly matters for foreign businesses that expect to:

1. Hold intellectual property globally
2. Add foreign subsidiaries after entering the U.S.
3. Centralize financing or treasury functions

The updated rules increase effective U.S. tax exposure on certain low-taxed foreign earnings and alter foreign tax credit mechanics. For expanding businesses, this can materially affect where intellectual property is located, how subsidiaries are capitalized, and how profits are ultimately taxed as the group scales.

This is one of the areas where Lodder CPA most often sees expansion plans break down if modeled using outdated assumptions.

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Foreign Tax Credit Mechanics Require Re-Evaluation

The new legislation modestly improves deemed-paid foreign tax credit calculations in certain contexts. However, these improvements frequently do not fully offset the increased exposure created by the revised NCTI framework.

As a result, common strategies involving dividends, royalties, or intercompany services may no longer produce the same outcomes they did under prior law. Expansion planning now requires a fresh analysis of how income flows between entities and how credits will be utilized across jurisdictions.

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Capital Investment Incentives That Change U.S. Entry Economics

Permanent 100 Percent Bonus Depreciation

One of the most impactful changes for inbound businesses is the restoration and permanence of 100 percent bonus depreciation for qualifying assets placed into service on or after January 19, 2025.

This is particularly relevant for businesses planning:

1. Manufacturing or assembly operations
2. Automation or robotics investments
3. Logistics and warehousing infrastructure
4. Technology or data-center buildouts

When modeled correctly, accelerated depreciation can materially improve early-year cash flow and change the overall economics of whether and when a U.S. expansion makes sense.

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New Expensing Opportunities for U.S. Production Facilities

The legislation also introduced Qualified Production Property, which in many cases allows full expensing for certain U.S.-based production facilities, including qualifying warehouse real estate, provided construction begins before January 1, 2029.

For foreign businesses weighing where to locate production or assembly, this incentive often shifts the analysis in favor of earlier U.S. investment rather than waiting until later expansion phases.

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Enforcement Trends Foreign Businesses Cannot Ignore

Legislative incentives are only one side of the equation. Enforcement is becoming more targeted and more sophisticated.

Key areas of increased scrutiny include:

1. Transfer pricing and intercompany financing
2. Intellectual property valuation and royalty structures
3. Third-country transactions
4. Stock-based compensation allocations

State tax conformity adds another layer of complexity. States are independently deciding whether and how to conform to federal changes, particularly around bonus depreciation. Without early coordination, federal savings can be partially or fully offset at the state level.

International information reporting requirements are also expanding, increasing penalty exposure for misfiling or late filing. Accuracy and coordination matter more than ever for foreign-owned businesses operating in the U.S.

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Practical Planning Considerations for Businesses Expanding in 2026

Businesses planning U.S. expansion or growth in 2026 benefit most from addressing these issues before entities are formed, assets are placed, or contracts are executed.

In practice, this often includes:

1. Re-running cross-border tax models using updated rules
2. Evaluating the timing of capital investments and facility construction
3. Strengthening transfer pricing documentation early
4. Coordinating federal and state tax planning from the outset
5. Assessing tariff and supply-chain implications alongside tax strategy

The most costly issues Lodder CPA encounters are rarely compliance failures. They are structural decisions made too late to change efficiently.

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Planning Early Creates Leverage

The combination of permanent incentives, revised international rules, and heightened enforcement has fundamentally shifted the risk profile of U.S. expansion.

Businesses that plan early gain leverage. Businesses that wait often inherit constraints.

For foreign-owned companies entering the U.S. in 2026, early-stage planning is no longer about marginal optimization. It is about designing a structure that supports growth, withstands scrutiny, and remains flexible as the business scales.

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Request a U.S. Expansion Planning Consultation

Lodder CPA helps international businesses evaluate and design U.S. expansion strategies with tax efficiency, compliance, and long-term growth in mind.

For businesses planning to enter or scale in the U.S. in 2026, a proactive expansion planning consultation can surface risks, identify opportunities, and prevent costly restructuring later.

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Request a U.S. Expansion Planning Consultation to evaluate your 2026 expansion roadmap and ensure your structure is built to scale from day one.

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