Whether you’re a US company looking to expand into new and emerging markets, or a non-US business looking to expand into the United States, going global can be the key to moving from good to great, from turning a lifestyle business into a transformational business. Given the myriad of considerations for any company looking to do cross borders into new markets, you will need to grow new muscles to succeed, including new team members and advisors.
For those considering expanding into the United States, it is important to legally set up your business on a sustainable basis. You are entering a new stream of commerce with an entirely new set of regulations. There are a host of issues that must be addressed up front, such as legal and financial structure, IP protections, employment, contractors, distributors, manufacturing, product liability, federal, state and local income, sales and payroll taxes.
When setting up a business in the United States, you have choices in the way your structure your business:
These same considerations apply in reverse. For example, it has long been the case that US companies doing business in the People’s Republic of China should consider partnering with a local PRC company to pursue PRC markets.
Local law requirements in the US can implicate critical considerations, as well as the laws of any specific states in which you will be doing business. Do you have to have a local shareholder or director? Do you need a joint venture partner? What are the regulations surrounding the transfer of IP? What are the regulations surrounding citizenship requirements or permission to work? These are all issues that must be addressed. The same applies for US businesses going abroad.
How will you direct human capital to advance your goals? Which entity can employ personnel or engage independent contractors? What are the payroll taxing considerations? How will you maintain compliance with laws and regulations governing human capital and taxes?
Today, going global is imperative to maximize success, but it is also imperative that you don’t go it alone. These are incredibly complex issues that require working with expert advisors who can guide you from the beginning. So, who do you engage to help? A trusted lawyer with significant experience in helping non-US companies enter the US market can make all the difference. This will help you to navigate the many local requirements and set your company up for success to do business in the US.
By the same token, a well-seasoned legal advisor who is sophisticated in helping US businesses expand globally will know who to engage, where, when and for how much, and architect a winning strategy.