Coming to America: Bringing Your Startup to the US (Part I)

Coming to America: Bringing Your Startup to the U.S.

(Part I)

• Why the US? • How to get here• Legal considerations• Staffing• Business visas and visa requirements• Accounting • Tax considerations

Presentation Overview

The U.S. Startup Ecosystem

Choosing the right business partners - Legal - Banking - Accounting / Finance - Human resources Ancillary value

#SelectUSATech@SelectUSATech

John BreidenstineMinister Counselor for Commercial Affairs

U.S. Embassy London

So, what is SelectUSA?

SelectUSA promotes and facilitates business investment in order to support job creation, spur economic growth, and promote American competitiveness.

www.selectusa.gov

http://www.selectusa.gov/

“There is no better place in the world to do business than the United States of America.” - President Barack Obama

The United States consistently ranks among the top for fair, balanced and competitive business climate.

• #1 in AT Kearney’s 2013 FDI Confidence Index

• #1 in IESE Business School’s 2011 Venture Capital Index

• #4 in the World Bank’s Ease of Doing Business Index

Why?

Largest Country Sources of FDI in the United States by 2012 Stock Position

Rank Market

% of Total Stock

($2.7 trillion)Million

USD

1 United Kingdom 21.30% 564,714

2 Japan 11.67% 309,3833 Germany 10.27% 272,2624 Canada 9.85% 261,1335 France 8.36% 221,7246 Netherlands 4.91% 130,0757 Ireland 4.82% 127,6748 Switzerland 4.75% 126,0079 Spain 1.96% 51,89410 Australia 1.93% 51,051

11 Belgium 1.8% 47,728

12 Sweden 1.56% 41,449

13 Italy 1.25% 33,194

14 Norway 1.16% 30,814

15 Mexico 1.10% 29,175

U.S. FDI TrendsTop 15 FDI Stock Positions, 2012

What are companies doing?

• Reshoring• Honda• Samsung• Siemens

Why do we care?

• World’s largest recipient of FDI• 20.5% of U.S. exports• Nearly 6 million jobs• Average wage of $77,600• $45.2 billion in R&D annually• Investments in fixed assets

Why should you care?

• The U.S. – great target for expansion• 55% of global ICT R&D• 40% share of all tech purchases• Apple, Intel, Motorola and more

Why most successful startups are in the U.S.?

Access to:• Role models• Funding• Business

Infrastructure• Distribution• Monetization

capabilities

• Talent• Practiced Management• Production• Sheer Serendipity

SelectUSATech Seminar Series

• London – March 10, 2014• Dublin – June 25, 2014• Edinburgh – September 30, 2014• Belfast – October 21, 2014• Webinars• And, still more yet to come…

Fried, Frank, Harris, Shriver & Jacobson LLP

Daniel Glazer ([email protected])

tech.friedfrank.com / @friedfranktech

Setting Up Your Business in the US:Legal Considerations

Attorney Advertising. Prior results do not guarantee a similar outcome. © 2014 Fried Frank Harris Shriver & Jacobson LLP13

US Expansion: 5 key legal considerations

Consider your corporate structure

14

Fried Frank’s “Coming to America” legal guide is available at tech.friedfrank.com

or by emailing [email protected]



IP: Trademarks, patents, NDAs

15





Create US terms and conditions

16





Understand the litigation landscape

17





Don’t overpay or underutilize lawyers

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Business Visas for the US

Robert Ben ParkinsonE1/E2 Business Visa Analyst US Embassy London

America is Open for Business

…and it is (relatively) easy to get a business visa

Four primary ways to do business in the US• ESTA, Visa Waiver Program • B1, Business Visa• L1, Intra-Company Transfer Visa• E1/E2 Treaty Trader and Treaty Investor

Visas

Scope of the Program

• The E1/E2 Visa program is becoming very popular with Foreign Companies looking to do business in the US.

• We estimate there are currently 3000 British E1/E2 companies operating in the US • With annual revenue in excess of $200 Billion • They employ 900,000 staff (Mostly Americans)

• In 2013 we reviewed 650 UK businesses • And issued over 3,000 E1/E2 Visas to employees • We are expecting a 35% increase over last year• We see lots of IT startups • As well as lots of businesses in advertising , banking, finance

and various consultancies and SMEs moving to Florida.

E1/E2 Treaty Trader/Investor Visas

E1 Treaty Trader Visa Goal: Increase trade

between the US and foreign treaty country

Good Example:

A well established British company looking to staff a forward sales office in the US.

E2 Treaty Investor Visa Goal: To get foreign

companies to set up businesses in US

Good Example:

A recent tech startup looking to move their operation to California.

E1 Visa Requirements

1. There must be an existing treaty between the US and the Treaty Country in place.

2. The company must be at least 50% owned by Treaty Nationals.

3. Business activities must constitute trade.4. The trade must be substantial. 5. At least 50% of the company’s trade must take place between

the US and Treaty Country.6. Employees must be an executive, hold a supervisory position

or possess essential skills.7. Applicant must intend to depart the US once their visa has

expired.

E2 Visa Requirements

1. There must be an existing treaty between the US and the Treaty Country in place.

2. The company must be at least 50% owned by Treaty Nationals.3. The applicant or company must invest or be in the process of investing in the

US.4. The company must be a real and active commercial enterprise.5. The Investment must be substantial or at least sufficient to get the enterprise

off the ground.6. The company needs to (eventually) be profitable or benefit the US economy. 7. The owner of the company must be in a position to develop and direct the

Enterprise. 8. Employees must be an executive, hold a supervisory position or possess

essential skills.9. Applicant must intend to depart the US once their visa has expired.

Glenn McCraeChief Strategy OfficerEarly Growth Financial Services@EarlyGrowthFS

• Type of entity (C Corporation)• Registration requirements• Federal, state, local

• Tax sharing agreement• Between Parent and U.S. subsidiary

Corporate Structure

• Who will be employed in U.S.?• U.S. citizen, Resident, or Non-Resident Alien?

• Contractor or Employee? • What’s the difference?

• How will we pay our people? • Internal or external payroll services provider?

• What forms of compensation are expected?

Hiring and Staffing Considerations

• How will employees be taxed?

• Does the employee’s country of origin have tax treaty with U.S.?

• What does “permanent establishment” mean? How does it affect U.K. citizens?

• Types of U.S. payroll taxes• Both employer and employee obligations• FICA (Social security), Medicare, income tax

Payroll Tax Considerations

• Region / Location• What is driving decision to come to U.S.?• Will location influence success?

• Type of space – colocation or stand alone• Cost of space• Service required

Logistics – Selecting Space

• Income tax return• Foreign entity filing• FBAR filing• State filings• Local registration and taxes• Separate business and personal finances• Deduct business expenses• Stay on top of payroll taxes and 1099s

Corporate Tax Compliance

Takeaway – not overly complex or expensive, if handled appropriately

Appendix

Coming to America: The Legal Basics

32tech.friedfrank.com / @friedfranktech

“Coming to America: The Legal Basics,” is now available as a free download on iTunes (search keywords “Coming to America”).

The guide is also available as an eReader file and as a PDF through our microsite, tech.friedfrank.com.

The guide summarizes key legal issues that companies looking to expand to the US should consider, including sections on US tax, IP, employment, immigration, corporate, financing and litigation considerations.

A guide to indicative legal and related costs for US expansion is available upon request. Please email [email protected].

Coming to America: Part II

Accessing U.S. Capital

September 17, 2014

7:00-8:00am PT

Daniel GlazerFried FrankE: [email protected]: +1.212.859.8674 (New York)P: +44.20.7972.9159 (London)L: www.linkedin.com/in/danielcglazer tech.friedfrank.com@friedfranktech

John BreidenstineU.S. Embassy LondonE: [email protected]: +44 20 7894 0434 http://london.usembassy.gov@SelectUSATech

Robert Ben ParkinsonU.S. Embassy LondonE: [email protected]: uk.linkedin.com/in/robertbenparkinsonhttp://london.usembassy.gov

Glenn McCraeEarly Growth Financial ServicesE: [email protected]: 415.320.5753L: www.linkedin.com/in/glennmccraewww.earlygrowthfinancialservices.com@EarlyGrowthFS

mailto:[email protected]

mailto:[email protected]