Creating U.S. Legal Structure For A Foreign Business
A business based abroad that seeks to expand into the U.S., whether through an acquisition or organic growth, needs guidance to navigate legal and tax requirements.
At Stephenson Fournier our attorneys have a proven track record of helping Canadian, Mexican, Latin American, African, Asian and European offshore businesses expand to the United States. Our work includes advice on acquiring existing businesses, establishing a start-up or satellite operations, and forming US entities to serve as local distributors or service providers for foreign affiliates.
Reach out to us through the contact form or read through the FAQs on this page.
What types of entity choices may be workable for companies that expand to the U.S.?
The limited liability company (LLC) is a widely used business structure in the United States. But, international expansions often require a different structure based on domestic and foreign tax considerations and other concerns. Often, the optimal structure involves use of several entities.
Some of factors that should be taken into account when deciding on the organizational structure are the application of international tax rules and treaties, the nature and scope of the business, particulars regarding ownership of the business, and the nature of the industry or competitive space in which the business operates.
Is Texas known as a state with a positive business climate?
Absolutely. On some lists, Texas is the top-ranking state to operate a business. While much of the world is familiar with our state as a hub for oil & gas and for space exploration, lesser known are the world class agglomerations of companies focused on medical innovations, chemicals, technology, banking and finance, shipping, transportation and logistics, and more. Texas has a dynamic business culture that makes it a global powerhouse and Houston is the largest city in the state.
There is no state level personal income tax on Texas residents, making Texas one of only seven states without such a tax.
If Texas was a country, it would be the 11th largest economy in the world. Only California, among U.S. states, is larger.
What are some legal risks a foreign business operating in the U.S. must guard against?
Navigating and planning for the spectrum of federal, state and local taxes can be a challenge. There are many types of tax and levies a business might encounter. The U.S. has no VAT (value added tax), but state and local jurisdictions impose sales taxes which are similar.
Although the U.S. has lighter business permitting requirements than many other jurisdictions, it is critical to identify all required permits and become aware of applicable regulatory requirements.
The federal and state system of government adds complexity many foreign business owners find unfamiliar. Businesses must comply with the requirements imposed by all applicable jurisdictions in the country.
The U.S. has different employment laws and requirements than many other countries, and the laws vary from state to state. It is therefore important, for example, for an employer here to include counsel when developing employee policies, noncompetition and restrictive covenants, and employment agreements.
Obtaining financing or raising equity capital requires an understanding of applicable laws to avoid missteps.
Contracts for business transactions, contracts with customers and suppliers, and all real estate transaction documents should generally be prepared or reviewed by counsel. Talk With Us To Learn More
Business Law And Tax Planning
- Limited Liability Companies And Partnerships
- Business Contracts
- Equity Investments
- Non Competition, Non Solicitation And Confidentiality Agreements
- Business Tax Planning
- Buy-Sell Agreements And Other Agreements Among Business Owners
- Employment Contracts For Employers
- Business Formation And Startups
- FAQs For A Successful U.S. Expansion
Juli Fournier has been negotiating, structuring and successfully completing complex business deals in the state of Texas for more than 25 years.