Branch set-up for service company to operate in all states

I see two possible issues here: qualifying to do business in US states where the company will be active, and managing income tax liability. There is no firm standard on what qualifies as doing business such that one must register in a given state, but I would suggest registering your entity in every state in which you will have offices or have people meeting customers in the company's name. Even though the individuals will be independent contractors rather than employees, I recommend registering to do business if they will use the company's name. What is the possible consequence of not registering? I found the linked state by state chart of possible consequences, although you should be aware that it was prepared by people trying to sell you the service of registration. Also, for a horror story, read: http://www.masudafunai.com/showarticle.aspx?Show=6414 As for the tax issue, it is not my area of expertise, and I would suggest you contact an expert to see if you'd want a corporation (or separate corporations in each state) so that your income for services rendered in the US does not obligate you to report *all* income on a US tax return, or if you can sufficiently keep all payments in Canada or elsewhere and avoid the issue.

You will need the assistance of a tax professional in working out the most efficient way to enter the US market. State tax liability can vary greatly and some states are very expensive in which to conduct business (California and New York, mainly). California has a very broad definition of what constitutes "doing business in California", and unfortunately it's not as simple as either just having an office and/or hiring employees, so you may need to identify what your business presence is in each state as part of your entrance strategy and analyze accordingly.